After working on many innovative products over the years, it has become easier to filter through product concepts that present strong opportunities and are accomplishable versus products that don’t measure up. There are a lot of great ideas out there, but it doesn’t mean they should all be pursued. The challenge then, becomes identifying which ideas you should explore and why. I’ve found that I often run through the same initial set of questions to determine what will be involved in pursuing a concept, what kind of opportunity is available, and whether the person or group working on it has the resources to make it successful.
Of course, what I offer is only one person’s assessment, based on what I’ve seen in the past. As we all know, innovation is the business of what could be in the future. And when dealing with the future, the past can only help us make an educated guess, and may actually be of no use at all. In addition, the filters below pertain more to mass market, or large niche market products. They are less relevant to people who want to create products for a very small niche market. Also, there is no doubt that passion, persistence, and patience has helped many an entrepreneur overcome significant obstacles, regardless of what they faced at the beginning. So don’t use these questions as a rule of thumb, but rather, as a checklist to help you wrap your head around the potential opportunity your product idea presents and the resources required.
1) Wow Factor:
For a new product to gain attention, get people talking, get press, get buyers willing to take a risk—it REALLY helps if there is a “wow” factor to the product. So what are a few ways of describing what evokes a “wow” from people? The product does a good job of solving a problem that people really want fixed. In this case, it’s an easy setup: you describe a problem to someone and they genuinely say “yeah…I hate that!” Then, you show them how your product solves it easily. It will earn a “wow” in some form or another. A different kind of “wow” might be evoked by a product that does something that seems like magic. It may not be a “must-have”, but it’s novel enough that people will buy it just because they marvel at what it does. I would rather have the first kind of “wow”, than this kind—but this isn’t bad either. Finally, your product may not “wow” everyone, but if it “wows” a juicy enough market, then that’s all you need.
Takeaway: Does your product evoke a genuine, positive, emotional reaction from people (not people obliged to be nice to you) and compel them to want to learn more, buy, etc.?
2) Obvious Improvement and Benefit Factor:
Maybe your product doesn’t obtain a “wow” from people in general, but if your product offers an obvious, substantial improvement over existing products out there, it will be tough for people to ignore it. The nice part is you don’t need much for people to make the leap in their minds. Buyers understand that products on the shelves need to communicate their product benefits to consumers instantly. If I look at two razors and both are the same price, but one allows me to shave every other day because of some feature it offers—I buy that razor. If I look at two razors and both are the exact same, but one is 75% of the price of the other (and this is because of some improvement that lowered the manufacturing cost), then I buy the cheaper razor.
Takeaway: Does your product offer an easily understood improvement and benefit over similar products that already exist?
3) A Juicy Target Market:
Figuring out your target market isn’t always a straightforward task. Oftentimes, businesses pivot from one model or offering to another when they find out that the people they thought would like their products don’t, but another group of people do for reasons they never considered. You can’t always judge what will happen before you start, but if you realize at the outset that your product doesn’t have a reasonably sized, accessible group of consumers that have money to purchase your product, then the product you’re considering may not present a significant opportunity.
Takeaway: Be realistic about who might actually buy your product. Do you have evidence to support this? Is the market big enough that the stores you would like to sell through would be interested?
4) Helping People Make the Conceptual Leap, Including Buyers (Visualization):
Sometimes people will come up with an idea and share the idea with friends, family, and colleagues, and hear nothing but rejection. This might be a bad sign. But it may not be. First, these people may not actually be your target market. If not, then don’t listen to them. But if you think they are your market, and you have a feeling that “they just don’t get it”, you have to remember that not everyone is a crafty inventor like you and they may have a hard time visualizing, or imagining, what you are envisioning in your mind. To get around this hurdle, you’re going to have to do some legwork to create drawings, a prototype, or something that will help them visualize and/or experience what interacting with this product will be like. Often, buyers will need this as well. You will need to show them something that helps them grasp, and better yet, experience what your product will be like in reality. Hopefully, you can get to this point cheaply and quickly.
Takeway: How quickly and cheaply can you create professional drawings, a prototype, or video of how your target consumers will experience your product—so people don’t have to make a leap in visualizing it?
5) Start-up Costs/Time:
This is a very important factor to consider, but also one of the more difficult to get a handle on, particularly for people who have no experience in product development and manufacturing. Someone may come up with a product with a “wow” factor or “obvious benefit” factor, but they may be facing a really long, expensive, and resource intensive development phase that may drain their time and capital until they don’t have the resources to bring the project to fruition. The product might be a great idea, but it’s going to go nowhere because it requires a team of engineers, designers, and a factory to work on it for 1.5 years. That will be costly. In addition, products that involve certain materials, like plastics, carbon fiber, or others, may have very high tooling/mold costs. Simply put, factories build molds out of steel to produce high volumes of products, and these molds can cost tens of thousands of dollars. This is a lot of money to spend before a product even hits the market.
Takeaway: If you have interest in your product, how much money and time will it take you to get to a point where you can actually manufacture it and put it on the market?
6) Dollar Margin:
Is your product extremely low cost to make? Great! How much will you charge? You'll charge $1 only? Many people will be able to afford it. Hmmm…maybe not so great. It’s important to remember that we take dollars to the bank, not margin. You might make your product for $0.20 and sell it for $1.00 and you have a great margin. However, to really make a lot of money on a product like this, you’re going to have to sell a lot of your product. A lot! Are the masses all going to find your product wildly appealing and purchase it? Will you be able to get great shelf space over an extended period of time so that people can easily find your product and buy it? Is it exciting enough, or part of a rising trend that will help it gain a lot of buzz? Buzz can be hard and very expensive to generate. This shouldn’t rule out your product concept, but understand what it will take to drive your business and generate a healthy return should you pursue a product you will only make cents on the dollar with.
Takeaway: What will it cost to make your product? What do you think you will sell it for? Generally speaking, retail sales price is 4x to 5x manufacturing cost. Can you make those margins or better? How many products will you have to sell to pay for your business expenses and last but not least, your own salary?
There are a lot of great ideas out there, but it doesn’t mean they
should all be pursued. The challenge for innovators then, becomes
identifying which ideas you should explore and why. There are always exceptions and in the business of innovation, there is no guarantee of success. But, it helps to have a framework to start with when choosing an idea to spend time and money on. These six questions and issues, based on my experience working with numerous innovative products, will help guide you to ideas that have the best basis for success.
Ashton Udall is a partner at Global Sourcing Specialists, a product
development and sourcing firm. He works in product design, development, and
manufacturing, and has been a speaker on these topics at Stanford University,
the Industrial Designers Society of America, Inventors Alliance, and more. You can reach him at Audall@productgss.com.