If you're like most entrepreneurs, you have a million ideas for new products. But not all of those ideas are worth pursuing. In fact, if you don't take the time to do some initial research and planning, your new product could end up being a huge flop. That's why we've put together this checklist - to help you make sure that your new product is actually viable before you start building it.
1. Demand existence.
One of the most frequent reasons for failure is a lack of demand for your product or service. Many first-time entrepreneurs believe that market demand can only be confirmed shortly after launch. However, there are a variety of methods to estimate customer interest in your future product. Do you have any indications that people want what you're planning to produce? Is this signal strong and trustworthy? Are there any competing signs? Is it true that no one would be interested?
2. Initial target audience.
Do you have a clear definition of your initial customers? Can you define it so narrowly that in the first three to six months, you may reach a substantial (10%+) portion of this market? Have you spoken with these people/organizations? Is there anything special about their lives that is connected to your concept?
The solution is often seen as the first step in creative problem solving. Can you describe a corresponding issue? How serious is this need? Is this desire clear? Do consumers actively seek for improved answers?
4. Economic opportunity.
Is it a viable economic opportunity? Is your market large enough to support such an endeavour? Is it feasible to establish a significant presence in the initial market segment? In the following 3-12 months, what revenue might you realistically expect to earn? Is your solution profitable? What kind of profit margins are realistic for you?
5. Differentiation and defensibility.
What are the three most important skills that you need to develop in order to expand your business? What strengths or abilities do you currently have, and how will they help you close more sales? Will there be a way for you to grow your business without changing anything about it? What methods did you use before, and what lessons can you take from them?
In many situations, it's less vital to differentiate than it is at the start of the process. If your value proposition is appealing and distinctive enough to attract the first few consumers, you may begin now and establish a competitive advantage later.
“What do you know that no one else believes in?” is a question that Peter Thiel (PayPal, Founders Fund) likes to ask. It might be a starting point for your distinctiveness if you can provide an answer to this question.
6. Team Commitment.
How many members of the team are there now? What kind of commitment does he or she have? Is there anything else that will take people away from the project? What would happen if there were good results for the first three months? Is there a clear leader on the team? Can the project continue if a dispute arises and one crucial team member departs?
It is often difficult to assess the level of commitment of new team members. The question “What if things go really well, and we achieve our objectives ahead of schedule? What will you do then?” may give some insights into a person's level of commitment. If the answer is “I will leave the company and pursue other opportunities,” you might want to consider whether this is the right team member for you.
7. Team Competence.
What are the skills and knowledge you'll need to complete it? Can you do it on your own if necessary? What competencies will you need to fulfil? Have you ever completed anything of comparable scale before? How confident are you in your ability to deliver the product on time and within budget?
It isn't necessary to have all the important abilities at the start. You can locate co-founders for critical skills and delegate additional unknown areas. Typically, product creation and sales are two essential capabilities. If you don't have either of them, it will be difficult to make up for the deficit. It is not easy to master at least one of these skills.
If you can't find someone with the skill set you need, it might be a good idea to consider whether this is the right project for you, or whether you need to find an outsourcing partner such as Innovolo.
8. Willingness to adapt.
A founder's early concept may be linked to a great deal of emotion. What would happen if you were incorrect? Do you seek negative criticism and listen to customers? Are you willing to publicly acknowledge mistakes? Can you iterate quickly? The sooner you detect an issue and react to it, the greater your chances of survival.
When your idea does not work, be ready to change it.
What is your goal in pursuing this project? What's the motivation behind it? You'll need something inside you to encourage you when things get tough.
What is the nature of your involvement with the project's profit potential? Desiring a profit is usually a positive thing. Thinking, "making money isn't essential to me," might result in your project's failure. Many businesses aim to become lucrative in order to have more resources and pursue even bigger objectives. Profit is seen as a tool rather than a goal.
Be honest with yourself. Why do you want to pursue this project? What are your goals?
10. Resources needed.
What is the minimum amount of money that you'll need to be profitable? Is this prediction realistic? Does your concept necessitate any key contacts, resources, or other assets in order to be implemented? What is your strategy for raising initial cash? Is your approach significantly affected by third-party funding?
Investors want to see that you're a winner. Investors are primarily concerned with your track record of success or your present traction.
How quickly can you make your first dollar? When will your firm be profitable? If you don't have much expertise, try for projects that will generate a profit in three to six months.
How much money do you have right now? How much financial assistance can you receive from relatives and friends? Do you intend to borrow money? Assume no incoming income and how long could you survive without it?
12. Market risks.
Do you have a strategy that relies on the actions of your consumers or on a certain market trend that hasn't yet happened? When do you anticipate this "moment of truth" to occur?
If your new product depends on the actions of consumers, you're taking on a lot of risks. Even if you have a great idea, it might not be what consumers want. You need to have a plan for how you'll know whether or not people want your product. This usually involves some market research or testing your idea with a small group of people.
13. Execution risks.
Are you completely reliant on one particular individual or platform? For example, if you're launching a Kickstarter project and Kickstarter shuts it down. Is it difficult to develop a minimal product? What could go wrong? Will your creation fulfills its promise?
One of the biggest risks when it comes to execution is not being able to develop a minimal product. This can be due to a number of factors, including lack of skill, time, or resources. It's important to have a plan for how you'll know whether or not people want your product. This usually involves some market research or testing your idea with a small group of people.
Another big risk is that your product might not fulfil its promise. This can be due to a number of factors, including poor design, execution, or planning. It's important to have a contingency plan for how you'll deal with this possibility.
14. Competitor risks.
What are your competitors up to? How will they react to your new product? Do you have a competitive advantage? If not, what is your strategy for acquiring one?
Competitors are always a risk factor when it comes to new products. They might beat you to the market, or they might release a similar product that's better than yours. It's important to have a plan for how you'll deal with this possibility. You might need to release your product before they do, or you might need to have a better product. Either way, you need to be prepared for the possibility that competitors will enter the market.
15. Technology risks.
Is your new product completely reliant on new technology that doesn't exist yet or is unproven in your industry?
What are the risks and consequences of this technology failing to meet your expectations?
If your new product depends on new technology, there are a number of risks that you need to be aware of. One of the biggest risks is that the technology might not meet your expectations. This could be due to a number of factors, including poor design or execution. Another risk is that the technology might fail altogether. This could be due to a number of factors, including poor design or execution. either way, it's important to be aware of the risks associated with new technology.
16. Scalability risks.
Can your new product be scaled up or down? What are the risks and consequences of not being able to scale your new product?
If your new product can't be scaled, it might not be viable in the long term. This could be due to a number of factors, including lack of resources or market demand. It's important to have a plan for how you'll scale your new product up or down depending on the situation. You need to be prepared for the possibility that your new product might not be able to meet the demands of the market.
17. Regulatory risks.
Are there any regulations that could impact your new product? How will you comply with these regulations? What are the risks and consequences of not being able to comply with these regulations?
If your new product is subject to regulation, you need to be aware of the risks and consequences of not being able to comply with these regulations. This could be due to a number of factors, including lack of resources or knowledge.
You might need to hire someone who knows about the regulations, or you might need to get a license. Either way, you need to be prepared for the possibility that you won't be able to comply with the regulations, which would impact your new product.
18. Environmental risks.
Could your new product have a negative impact on the environment? How will you mitigate this impact? What are the risks and consequences of not being able to mitigate this impact?
If you're developing a new product, it's important to consider any potential environmental risks. For example, your new product might have a negative impact on water quality or air quality. You'll need to develop a plan to mitigate any negative impacts, and you should also be aware of the risks and consequences if you're not able to mitigate them.
19. Ethical risks.
Could your new product be used in an unethical way? Are there any groups of people who could be put at risk by your new product? How will you mitigate these risks? What are the risks and consequences of not being able to mitigate these risks?
Many new products can be used in an unethical way, putting vulnerable groups of people at risk. For example, a new product might be used to exploit or control people. You'll need to think about how you can mitigate any ethical risks before releasing your new product. It's important to consider the risks and consequences if you're not able to mitigate them.
20. Financial risks.
What are the risks and consequences of not being able to finance your new product?
If you can't finance your new product, you won't be able to bring it to market. This could have serious financial consequences for you and your business. You need to make sure you have a solid plan for financing your new product before you start development.
21. Timeline risks.
What are the risks and consequences of not being able to meet your timeline?
If you can't meet your timeline, you might miss your opportunity to bring your new product to market. This could have serious financial consequences for you and your business. You need to make sure you have a realistic timeline for developing and launching your new product.
22. Customer adoption risks.
What is stopping your target customers from using your new product? Do you have a strategy for getting them to switch from their current solution?
Your target customers might not be willing to switch from their current solution. You may need to invest in marketing and education efforts to get them to switch to your new product. Additionally, you'll need to make sure that your new product is actually better than the current solution that they're using. Otherwise, they won't be interested in making the switch.
23. Supply chain risks.
Could your new product adversely impact your supply chain? What are the risks and consequences of not being able to manage these impacts?
If you're not careful, your new product could adversely impact your supply chain. For example, if you're using new materials that are difficult to source, it could delay production or increase costs. You need to think about these risks before you start developing your new product. Additionally, you should have a plan for how you'll manage any impacts on your supply chain.
There are a lot of things to consider before you start developing your new product. By using this checklist, you can make sure that you've thought about all of the main potential risks and impacts. This will help you to create a successful new product.