This post provides guidance for qualifying an idea for a CPG or consumer product business (B2C or a B2B2C).
In my opinion, the process for qualifying idea for a CPG or consumer product business is really hard because your first iteration is NEVER the final and best idea. Your business idea should naturally evolve as you think about it and do research through the questions provided below.
The cheapest and most effective way to ensure your business idea is a success is to do a lot of grunt work at this stage. This helps you avoid potentially painful and expensive changes you might have to make after you’ve started your business.
Ever remember someone telling you to look for the good in people or a situation…you know, “the glass is half-full” thinking? Well, when considering a business idea, don’t do it that way. You need to do the opposite.
I like to start from the perspective that my idea is a bad one and I am going to do some research to prove that. If I start with that mindset, it helps keep me from falling in love with the idea, where I will be much more prone to discount information that qualifies it as a bad idea.
This critical attitude forces me to look at all the negatives and check them off my list. If the negatives are not proving out, then I am more likely to have a good idea.
The questions are as follows:
- What pain, need, problem, unmet demand or customer delight does your idea provide? What keep’s them up at night? Identify the specific needs that correspond to a good market opportunity. For example, you probably don’t want to enter a market where customers are extremely happy with how well the existing products meet their needs. When you develop a new product or improve an existing product, you want to address customer needs that aren’t adequately met: their “underserved” needs.
- What is your “WOW” factor. How would consumers be impressed such that you give them a feeling of “WOW” and make a memorable impression on them? How can you surprise them in unexpected but delightful ways that they do not see coming? Customers are going to judge your product in relation to the alternatives, so the relative degree to which your product meets their needs in a clearly differentiated and impactful way depends on the competitive landscape.
- Do your potential customers know they have a need, problem, unmet demand and do they care? Seriously…do they care? Enough to spend money on it?
- Can you solve it quickly?
- Who are your customers? Define them as specifically as possible. How can you reach them to let them know about your product/service? Can you profitably reach them?
Dissect your idea further with the following:
- Scene or situation: focus on the moment of frustration with the customer. What is going on? What is the user about to attempt?
- Desired outcome: what is the user trying to accomplish? Why is this important?
- Attempted approach: without your new product, how does the user go about the task?
- Interfering factors: what goes wrong? How and why does it go wrong?
- Economic Consequences: so what? What is the impact of the user failing to accomplish the task productively?
- Is your product an evolutionary improvement or a revolutionary improvement? The latter tends to have the most impact and reward, but also usually carries much more risk. How can you make your product revolutionary? If your product is an evolutionary improvement, is it enough to make a difference that a customer will care?
- Is your product a required spend by consumers or a discretionary spend? If the spend is part of a consumer’s behavior, then it can trend toward being a required spend. If it’s a discretionary spend, then your “WOW” factor has to be high.
- In a perfect world, what is the absolute best outcome or dream that your product/service delivers for the customer? Can you engineer backwards based on that outcome and pull together the right resources to achieve it?
I think successful startups must have at least one of the following:
- “WOW” product to deligh customers;
- Intellectual property that they can defend and which gives them a clear market advantage;
- A unique distribution channels for making product sales.
Rgeardless of whether a company has IP or a unique distributon channel, consumers have choices and you still have to WOW them.