Imagine this: someone in your organization has an idea for a new way to generate revenue for the company.
Imagine they have some clout within the company, so their idea gets traction internally, and everyone is talking about it.
The question is: is it a good idea, or a bad idea?
You don’t initially know, regardless of whatever the consensus may be within the organization. There are lots of factors that could tip the answer one way or another. And lots of bad ideas seem good initially, and vice versa.
The first task in dealing with any new idea like this should be to determine: good idea or bad idea? And the goal should be to get a decisive answer, for as cheaply as possible, as quickly as possible.
Factors to consider include:
- Is there a market for this idea?
- Is the market big and/or growing?
- Does this build on our core strengths?
- Would there be enough of a margin to make it worth our while?
- Can we execute this idea correctly?
- Is there a public appetite for this kind of idea from our company?
There are lots of ways to get these answers. Some ways are long and expensive, some are fast and cheap. Some give a false sense of security, some don’t give any concrete sense of certainty at all, beyond just a directional sense (which of those two things is better? I prefer the second).
But however you do it, you want to put an idea into a process and have it come out the other side as either a) good/funded b) bad/de-funded. And you want it to get through that process as quickly and for as little cost as possible. And of course you want to be right.
This, in a nutshell, is the process of early product ideation and development. Any company building and launching new products has to get good at it, and bake that deeply into their company process.
Otherwise, you end up with products that are bad (i.e. money losers) that took way too much time and money to reveal themselves as such, and good ideas that never got made into products at all, because their resources were sucked up by the bad ideas.