|
When you are considering any potential market, rate each of the ten factors that follow on a scale of 0 to 10, where 0 is extremely low and 10 is extremely high. Be conservative in your estimates:
-
Urgency – How badly do people want or need this right now? (opening night tickets vs. reruns)
-
Market Size – How many people are actively purchasing things like this? (think cures for disease vs. basket weaving classes)
-
Pricing Potential – What is the highest price a typical purchaser would be willing to spend for a solution? (what the market will support)
-
Cost of Customer Acquisition – How easy is it to acquire a new customer? On average, how much will it cost to generate a sale in both money and effort? (marketing, advertising, entertainment)
-
Cost of Value Delivery – How much would it cost to create and deliver the value offered, both in money and effort? (delivery by Internet vs. brick and mortar buildings and materials)
-
Uniqueness of Offer – How unique is your offer versus competitive offerings in the market, and how easy is it for potential competitors to copy you? (is the market saturated or are you the only one)
-
Speed to Market – How quickly can you create something to sell? (today vs. years of development)
-
Up-Front Investment – How much will you have to invest before you have anything to sell? (low technology vs. research and development and manufacture)
-
Upsell Potential – Are there related secondary offers that you could present to purchasing customers? (the classic example is razor users need shaving cream and extra blades vs. a stand alone product that requires nothing else)
-
Evergreen Potential – Once the initial offer has been created, how much additional work will you need to provide to continue selling? (books are created once with royalties collected at every sale vs. an individualized product that takes additional resources with each job)
Add up your scores. Below 50 – move on to another idea – there are better places to focus your time, energy and money. Above 75 – Full speed ahead! Between 50 and 75, you may be able to pay the bills, but check on the investment of your time and energy and dollars. Are you committed to doing what it takes?
|
