Kicking Your Idea's Tires
Previous

(All 25 of them.)

Experts differ on the failure rate of new products — somewhere between 70 and 90 percent — but they all agree it’s pretty scary. So many torpedoes can sink the launch. Supply constraints. Creeping commoditization. An ill-prepared team. Difficulty establishing a loyal customer base.

No new product emerges amid perfect conditions, but companies can improve their odds by assessing every risk. A helpful guide is the Product Opportunity Evaluation Matrix, an open-source tool first described in the book The Smarter Startup (but useful for brand managers and R&D teams at companies of all sizes) by Neal Cabage and Sonya Zhang.

The matrix examines five forces that influence a product’s viability: the product idea itself, the intended customers, financial requirements, market timing, and the competitive environment.

To assess their product idea’s strengths and weaknesses, users grade — A through F, or one to six — the five considerations listed under each force. They then calculate overall scores for each of the forces. A low overall score in any force category may signal an insurmountable obstacle. In that case, it’s probably not worth the risk.

1. Customer Filter

 

Customer Considerations

Grade Yourself (1-6)

Clearly Identifiable Customer: Can you concisely describe your target customer? Can you create a simple persona to describe them?

______

Meaningful Problem to Solve: Does your idea offer significant value to the concisely defined customer, that is not yet addressed or matched in the market?

______

Segmentable Market: Is it possible to start small by cleanly segmenting your audience?

______

Customer Accessibility: How easy is it to access and facilitate your customer?

______

Customer Alignment: Is this idea something that you could establish a loyal and recurring customer base around?

______

Your Overall Customer Score

______


2. Product Filter

 

Product Considerations

Grade Yourself (1-6)

Tight Niche Focus: Can you concisely define the product with laser focus?

______

No Network Effect: Will your competitors’ networks make it difficult to break into the market?

______

Lean Method Viable: Is your product concept compatible with the lean startup approach?

______

Team-to-Market Fit: How well suited is your team for this product opportunity?

______

Inherent Story: Does your product have word-of-mouth or viral potential?

______

Your Overall Product Score

______


3. Economic Filter

 

Economic Considerations

Grade Yourself (1-6)

Healthy Margins: What sort of profit margins can you anticipate and will they justify the effort?

______

Demand Constraints: What is the potential demand for this product concept among your identified target audience?

______

Supply Constraints: What limitations may make it difficult to address the potential market?

______

Sunk Costs: How much capital is required up-front for research and development, before you can anticipate revenue, and how does this compare with revenue potential and your own financial resources?

______

Cash Flow Requirements: How much cash must you “float” between when you must pay your expenses and when you realize profits?

______

Your Overall Economic Score

______


4. Timing Filter

 

Timing Considerations

Grade Yourself (1-6)

Secular Trend Alignment: Is your idea related to a growth market? Is the general category emerging or in decline?

______

Recent Innovation Enabler: Has some recent technology or regulatory change recently made it possible to do what you are now proposing?

______

Market Inefficiency: Do you see inefficiency in the proposed market?

______

Recent Competition Surge: Are a number of other companies also trying to insert themselves in the market?

______

Recent Competition Surge: Have any brands in the proposed vertical become commonly known by your target demographic? Have there been recent acquisitions of smaller competitors, or large advertising battles for dominance between brands?

______

Your Overall Timing Score

______


5. Competition Filter

 

Competition Considerations

Grade Yourself (1-6)

Limited Competition: How much competition is there? Is it possible to find a differentiated position so that you’re not in direct competition with those already competing, or is the market saturated?

______

Competitor Fitness: How competent are your competitors?

______

Team Fitness: How fit is your team against those your plan to compete against?

______

Defensible Position: Should you become a market leader, is it going to be possible to differentiate yourself or otherwise secure a competitive advantage to prevent others from taking your market from you?

______

Barriers to Entry: Do any of your competitors already control a defensible position that would make it difficult for you to enter the market or gain market share?

______

Your Overall Competition Score

______


6. Overall

 

Considerations

Your Totals

Overall customer score

______

Overall product score

______

Your economic score

______

Your timing score

______

Your competition score

______

Your Overall Score

______

 

Source: POEMFramework.org.

Article provided by thebuildnetwork.com   © 2013 Mansueto Ventures LLC

Next

On a scale from 1 to 5, with 1 being 'Not Good' and 5 being 'Excellent', how would you rate this article?

Press enter to submit your rating

Rate this Article

Use this form to provide additional feedback based on the rating you provided.

Thanks for Rating

Would you like to provide feedback?

Thanks for your feedback!

The information, views, opinions, and positions expressed by the author(s) and/or presented in the article are those of the author or individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Regions. Regions makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented.

This information is general in nature and is provided for educational purposes only. Information provided and statements made by employees of Regions should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Regions encourages you to consult a professional for advice applicable to your specific situation.