Jul 24, 2011

Evaluating our own assets for product success

We see successful and not-so successful products all the time, everywhere. 
Products that required a great investment and did not succeed, cheap products that are great, and products that did not advertise but viral marketing put them in everyone's mouth. We know that providing a 100% success guarantee formula for success is impossible, so we won't try to do that. However, after a few years of experience with products, we've seen a few factors that go beyond having a great idea and that evaluating them with a quick, honest glimpse will provide us with a panorama on how good our chances are. As stated in the title, they are internal, within our organization aspects. 

1.- Idea
Everyone's had great ideas. So, we're not going to discuss whether it is good or not. Besides that, what is good? Just build them up and then we'll see.
2.- Conversion
This is where the interesting part comes. Or just like they say in Spanish, the "meat" starts. One thing is to have a great idea, but another one is how easy, convenient, expensive, and realistic it is to bring it to life. Think of the advantages and disadvantages of having helicopters for everyone to get to work, for instance. Or having today, 2011, a smartphone with the power of a 12-core processor. Sure it's a great idea, but the means and the price will surely get in the way.
3.- Investment (time, money and assets)
Tricky one. We need to honestly assess how much it'll be needed to: develop, test, manufacture, pay suppliers, create space on a supply chain, distribute, deliver, and give credit to our intermediaries / final customers before we start to make money out of our idea. Can we handle it?
4.- Distribution
Aha. Last but not least. Actually, together with the Idea, we think this is one of the most important ones. 

  • How are we going to sell this? To whom?
  • Have we sold something through this distribution chain? Is it the most convenient for this new product? Do we need to invest anything?
  • Based on last question, have we got any sales forecast? How to know if it is effectively growing?

Companies like Amazon and Walmart have the power of Distribution Lines. Products might be great, but if they don't comply with these companies' distribution policies, they're not going anywhere. Is your product going through existing lines, or you have your own? Is it strong enough?

We hope you find this useful next time you plan to invest in a new product.