When you're deep in the "fuzzy front end" of new product development, it's challenging to know which of your ideas are winners and which you are better off tabling. It can be hard to maintain objectivity when you've poured hours of hard work into a new product that you're excited about and personally connected to. However, for your business to succeed and grow, you need to be able to step back and evaluate products from the consumers' perspective.
If you're unsure of a product's market potential, you have to make the decision to either ramp up your efforts or yank the product from the pipeline before you dump a ton of money into a clunker. So how do you evaluate whether a product is a winner or a loser?
4 Tips for Evaluating Your New Product
1. Know the Market History
Just because you conceived of an idea for a product doesn't mean that something similar hasn't been tried before. Researching similar products and notable product failures can help you from dumping a lot of money into a project that's not likely to make you a big return on your investment. Tim Berry of Palo Alto Software offers an in-depth and fascinating look at historic product failures at MPlans. Do you remember the DeLorean, RCA computers, or the 20-cent coin?
2. Evaluate the Need for Your Product
You may have the most clever idea on the planet. However, if there's no consumer need for it, it's a dud. Think of the "build a better mousetrap example" that's so popular in business classes. Does the world really need a better mousetrap when the original wood and wire trap works just fine?
Ask yourself: What is the problem that this product will solve? Is it a problem consumers are willing to pay money to solve? The need for your product doesn't have to be basic, like food or lodging, it can also be emotional, social, or economic. At PakWired, Beth Burgess advises developers to:
"Consider whether your idea will make someone’s life better or easier, or whether it will make them feel better about themselves. Emotional needs are some of the most important drivers that people have, which is why luxury products and status symbols will never go out of fashion. Make sure your product or service meets needs that are recurring and long-term, otherwise your idea may only be a flash in the pan."
3. Describe Your Product Succinctly
A great test for the practicality and marketability of a new product is to describe it in as few words as possible. Does your product require complicated sentence structure to convey? Are there peripheral functions that take your time away from the main event? If you can't clearly articulate what your product does and who your target market is in just a few sentences, odds are you have an overly-complicated product that won't resonate with consumers.
Entrepreneur Ash Maurya has a great take on the idea of the "Minimum Viable Product" (MVP). It's a very valuable way of approaching product development that emphasizes a lean approach. In a post on Practice Trumps Theory, he writes:
"A Minimum Viable Product is the smallest thing you can build that delivers customer value (and as a bonus captures some of that value back)."
4. Listen and Test
Even if you, your friends, and your investors all think your idea is a winner, that doesn't necessarily mean that the public will flock to buy it. Soliciting consumers opinions of your product or idea (and listening to their responses), can help you determine how potential customers will feel about your product. Check out my recent post on Real-Time Market Research for tips on using social media to gather quick feedback from your consumer base.
Remember WebVan, the service in the early 2000's that delivered groceries to consumers' homes? It was a great idea on paper. However, shoppers didn't see the need for it and it failed. Make sure that your product has the necessary appeal by testing it on a limited number of people before you spend a fortune mass-producing it.
Ramp It or Yank It
When you find yourself at that pivotal moment in the development of a new product, take a step back and use these tips and tools to make an objective assessment of your progress and future goals. As hard as it can be, it's better to kill a bad idea quickly than to let it drain your resources away from a more promising idea.
At Eidson & Partners, we're proud of the products we've helped launch, and also the products we've helped kill. The ability to distinguish between the two is the capstone of successful product development.