I want to tell you a story. It is about a great entrepreneur who came up with an amazing idea for a product he knew his clients had been hanging out for. It was a world first and he lay awake at night visualising his revenues going through the roof as soon as it hit the market.
His biggest worry was someone finding out what he was doing and somehow getting to market before him. So he kept what he was doing secret, perfecting his product by night and continuing to work by day. The years passed but he didn’t dare talk to anyone about what he was designing in case the idea was leaked. He kept the faith that there were millions of customers just waiting for his product to come onto the market.
You can probably guess this story has nothing like a fairy tale ending. It is unfortunately a story we hear on a fairly regular basis.
It is often my job to ask some of the hard questions like: does your product solve an existing problem? – or have you developed a solution that is looking for a problem to fix? Who is going to buy this product and how are you going to get the product to them? And often the killer question; how much are you going to have to sell this for and how many units will you need to sell before you start to make a profit?
The greatest failing of most inventors and innovators is the simple fact that they forget to do their research – not just into the market itself, but into some other fundamentals around how much a customer would be prepared to pay for what they are creating. This isn’t rocket science, but if you’re about to unleash your world first onto the market you better make sure that there are potential buyers out there and (unless you are doing this for the good of mankind) how you are going to make some money from it. Ask yourself a few simple questions:
What problem am I solving?
How big is the market locally and/or internationally?
What percentage of market share will I need to start making a profit?
Who else is doing what in this space?
What is a realistic launch price for my product and what are the costs I am going to need to cover in producing it and getting it to market? (Don’t forget that you are going to have to let the world know it exists, so a marketing budget needs to be part of this)
The only real way to answer these questions is research. You have to get the fundamentals right before going too far down the track and you need to do it before you have invested 10 years of your life and thousands of dollars in development.
People are often too close to their own ideas. It doesn’t matter a damn that you think what you’re offering is unique; what does a prospective buyer think? If uniqueness only exists in your own mind, then make sure you don’t believe your own hype.
Even apathy in the mind of your prospect is competition. Resistance, or lack of desire to change, will hurt your chances every bit as much as a vociferous competitor – anyone inventing a new mousetrap will lay testimony to this.
Whilst many companies look to do research on the cheap, in reality this is an area of your business you shouldn’t cut corners on. Invest wisely and make no mistake it is an investment not an expense. Use a reliable, independent resource and you will reap the benefits of having a product that the market wants and is willing to pay for. In many instances it will also get you to market far faster – you will have a better understanding of the problem you are trying to solve and you won’t “over develop” your first release into the equivalent of a formula one racing car when a hand cart would do the job.
Bob Pinchin is the director of Sway.tech, a specialist communications house for technology companies. Email email@example.com