Whether you are an established company with millions in revenue, or an aspiring entrepreneur contemplating turning the spare bedroom into the new world headquarters of your first venture, evaluating an idea for the product or service you wish to innovate is a critical procedure. It is so critical it may determine whether you make money or lose it and many people, companies included, do not have a structured process for assessing which of their many ideas should be pursued and which ones should be let go and when.
In an economy where intangible assets like intellectual property (patents, copyrights, trademarks and trade secrets) can make up as much as 50%-90%+ of the company’s total value, not having a process for evaluating ideas is like not knowing the route to the grocery store and having to figure it out all over again every time you want to eat. It wastes time, creates risk and may take you where don’t want to go.
There are different methodologies for evaluating an idea to determine whether it might grow into a business or a meaningful product for an existing business. DARPA (Defense Advanced Projects Agency) has a model that is widely recognized. Different authors have their own. My company, IP Launch, has one that my partner and I developed too. But regardless of whose methodology you use, it is important to use one, because the absence of one is almost always easily recognizable when someone presents their business plan or product idea.
Here is a tip that I find often overlooked in the absence of a good evaluation system:
Technical Superiority vs. Who Cares? Changing human behavior is not easy. When people fall in love with their innovation or business idea they naturally begin to believe that all of humanity will also share that love once they know about all the ways this product is technically superior.
Reality: Technologies don’t have pheromones.
People don’t wake up every day in a time-starved debt-laden society and say, “I know what’s missing from my life, a new technology, which one should I pick? I know, I will develop a matrix spreadsheet in Excel and compare all the capabilities of whatever is new on the market.”
Yet that is how the go-to-market strategies get developed in the entrepreneurial war room. Human beings have an amazing capacity to tolerate inconvenience and inefficiency if it means they don’t have to change something. Change is hard, even if it is better. It has been my experience that most of the products on the market are not the technically superior versions; rather, they are the best packaged and best at connecting with customer versions.
There is nothing like an entrepreneur concluding a passionate presentation to a potential investor or an ambitious employee concluding a career-making/breaking presentation to a CEO and Board, only to hear at the end of it, “So, who cares?” The silence that follows is deafening. Most presenters expect applause, questions, a check, the green light, but few anticipate “who cares?”
What to do: If you will ask yourself that question ahead of time, and not allow yourself to use any answer that is based on the premise of technical superiority, you will almost always uncover holes that need to be filled and a new direction for the presentation.
What other ingredients would you recommend someone include when developing an idea evaluation system?
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{ 3 comments… read them below or add one }
Gretchen 07.28.08 at 8:32 pm
I am the cofounder of an enthusiastic, innovative, product design and manufacturing enterprise that makes, of course, innovative storage and organization products that, of course, we think everyone will want to buy!
Despite what we think, reality is not to be ignored. We have added a couple of intangible elements to every design evaluation process and found them to be very useful:
1. Fall out of love with the product. Be passionate, love your product, but don’t be in love with it. It blinds you to the realities of how your product is received by your target market.
2. Look for the “intuitive” hit when people are viewing your product or idea, not just features and benefits. Is it there? If not, we re-evaluate whether the product has viability in the marketplace. If your products produce an immediate intuitive hit with a majority of potential buyers, the “who cares?” is a lot easier to answer–those who have made the emotional, intuitive connection, even if it’s a room full of suits.
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Wilson 09.12.08 at 11:32 am
The article is head-on. I have been involved on several occasions in the development and marketing of some products which initially looked like they would be a total hit on the market only to discover after the launch that most people were asking the “who cares” question.
Do not, i repeat Do not get blinded by your subjective, over emotional and sometimes egoistic attachment to an idea and fail to submit it to an objective test of market-worthiness as suggested by the author of the article
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Shane Lashley 09.12.08 at 12:15 pm
Thanks for stopping by, Wilson. I always find it interesting to see the energy and conviction someone has on this subject as opposed to those who are first-time entrepreneurs and can only mentally connect to the concept.
Experience (read: frustration, humiliation, loss, anguish) can be a really effective teacher sometimes. For most of us, it would be nice to say we had never heard that advice before learning that lesson. But I think if we are honest with ourselves, for most of us, it is that we heard the advice but assigned it to a lower priority until we suffered the consequences. Funny how that can really move something up the priority ladder really quickly.
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