Product Development Blog » opportunity analysis

My Idea Research

Sam — Wed, 26 Nov 2008 03:51:15 +0000

My girlfriend had a complaint one morning recently. We were both leaving the house very early and it was still dark. We had a hard time locking the door from the outside and were laughing about our difficulties. She turned to me and said what about a flashlight attached to the actual key. The keychain lights would not have helped us, it would have required two hands and before coffee we were both struggling with even one.

That weekend we headed up to Portland, Maine for some away from the city time and while she was looking for holiday gifts, I was passively looking for her keylight as a holiday gift. Unfortunately I didn’t find anything, so I thought there might be an opportunity there.

I was skeptical that no one had done it before but I had all the materials to do a prototype. However, even before playing with my LEDs I did a quick search online, only to find many many exist. Sure, none had my design and I thought mine would be better but none of the existing products that were the same had made it to the mass market.

If I was to pursue this product it would be about distribution and sales, which is fine if that is the type of company I would like to build. As you might have guessed it has now become a page in my idea notebook that will get very little attention in the near future.

Which Idea Should You Pick???

Sam — Thu, 25 Sep 2008 19:53:02 +0000

Many times inventors come to us with their best idea, other times we are presented with the top three and asked which is best. Being confronted with delivering this type of input is difficult for a number of reasons, but mainly because we want to put resources into the best one. The difficulty lies in evaluating the ideas by market size, market pain, price (point flexibility resulting in better margins), development (cost & time), manufacturing costs, competition, potential penetration %, intellectual property.

To evaluate the designs I am going to use a figure from a prior post about evaluating design options. Check out that post to see how to fill in the chart, don’t forget to add in the other variables.

The variables reflect both the good and bad aspects of possible outcomes:

The goal of most of clients is to make money off an invention (market size, penetration %, price points / margin). However, everyone has a finite amount of funding available, so then the goal is to make the most money with X amount of money (development & manufacturing cost). We all have an amount of patience and few are willing to wait years to make profit, so then we add time to market to make the goal: make the most money with $X in T months (development time).

No one wants to get to market only to be met by an injunction and a lawsuit claiming infringement or only to be ripped off a few months later (IP status). Also a product profitability can be seriously hurt when a close competitor alters their product to directly compete with your idea (competition).

Personally, when I first started inventing I had a hard time with this. I remember bringing 20 ideas to a former mentor and being shocked and overwhelmed when I was told to pick out the top two. I worked on the two, one of which branched out into two discrete products, so then I had three (lets call them A, B, C). I believed that if I worked on three ideas, one would pan out and hit it big, a type of portfolio approach. I continued working on the products and the marketing while seeking advice from S.C.O.R.E.. I realized that I needed some type of prototype, but I only had the technical skills to prototype A, so I focused on A. Eventually I was confronted with an interesting question, “If you were to ask for money (bank or investment) how much would you ask for?” This question led me down the path to find out the manufacturing costs for each of the three ideas. As it turned out A & B would cost far more than I was willing to spend or ask for, so I was left with C, an idea I had spent 20% of my time and effort on.

Another interesting thing happened. By focusing on one idea, I was able to make incredible progress. I know that if I had split my time, resources and sanity between three ideas the end results would have been far less. Developing a product almost requires living day and night in that market and technology.

Back to our position on evaluation, I think about venture capitalists. These investors know a specific technology or industry incredibly well. They know all the players, the issues, past failures, technology trends and opportunities of a very small area. These investors are sent thousands of plans a year make a few investments and the general success rate of their investments is one out of seven. Now, we are not market experts, we are product development experts. While we understand how to get products from idea to manufacturing and can help with some of the marketing i.e. packaging and branding, we don’t understand a lot of different customer segments very well, or at least well enough to make that determination when first exposed to an idea.

As you can see this decision involves a lot of work. And while we can help define these variables with an opportunity analysis and feasibility study, it is really up to you (and your gut) as to which idea deserves to move forward. Regardless of what idea you chose (and how you proceed), you are going to have to live with it, work on it and spend money on it. Using this evaluation system, although not perfect and whose results can be easily ignored is important to acknowledge the strenghts and weaknesses of each idea.

Market, Design, and Technology oh My!

Sam — Sun, 20 Jul 2008 14:38:14 +0000

Based on an Inventors Clinic I attended as part of IANE I was confronted with an issue that happens quite often, so I will try and address the issues in general terms.

Problem

So you have found a good problem that you would like to fix. The problem exists in several different markets and each market would like a different design and technology solution. So what market, design and technology do you pursue?

Answer

The answer is to follow the market! Pick the best market, and the rest of the product development concerns will be answered by that market. How do you pick the right market? Well this is now an opportunity assessment and you could use Porters 5 forces and a number of different methods, I will talk about one that I use often.

So you have three possible markets, lets say elderly, kids and daycare (markets somewhat taken from 2Hot). Through internet research find out how many of them exist (#). The value of the market can be established several different ways ($) like: cost of bad occurrences without the product like hospital visit costs or law suits, how much money do people spend in this segment like funds spent to remodel / update bathroom, or you could just use a 1-10 scale of the ability to pay. Market penetration (%) is tricky to do. A survey with a picture / demonstration of the prototype works, but doesn’t show if they would actually put money down to buy it. For penetration you could use a proxy of another new product that entered a similar market area and say you will get the same market penetration. Customer Need is a very important aspect. This would be put in a weighted scale of 1-10 based on survey results, interview feedback and pre-production purchases. Customer need is the amount that the market absolutely needs your device (also called market pain). Finally competition, what is out there that is working now? Does it fix the problem adequately (even if not perfectly)? The competition scale is inverse, so if there is none, put 10, lots use 1.

Other Variables to think about

Cost of switching, target market disposable income, insurance complications etc. The list could go on and on, but you need enough info to make an educated guess/

Bottom Line

Multiply the whole chart through and find out which one is higher. That is your market and dive into it some more because there will be other variables to understand. You might not pick the right market at the beginning even with this analysis, but you will have a sense of direction and understand what the next best option is.

Design & Technology

I always believed that you ask you market what design / technology will work best. Don’t ask do you prefer Infrared or Capacitive, but instead describe the function / embodiment of the different options. Design is easier, come up with several different styles and show pictures to people, gather responses and analyze results.

Now you know how to evaluate which market, what design and which technology.