Available resource on making the decision to market a new product.
"Most companies spend most of their time working on ideas for products that aren't going to be successful," says Jim Riordan. "So there's little time left for the products that really will work."
Riordan argues that the process of deciding whether to market a new product is not as complex and expensive as big companies make it nor as intuitive as most entrepreneurs assume. Anybody can get the right answers. What Riordan supplies in his 236-page workbook, How to Evaluate the Potential for Success of a New Product or Technology: A 36 Point System for Spotting Money Makers and Avoiding Losers (916-676-4729, $49.95), are the right questions.
Users answer questions -- hundreds of them -- set forth logically in two principal groups. The first evaluates technical issues, such as production viability, investment cost, profitability, payback, legality, and liability. The second addresses marketing issues, such as demand trends, product life cycle, durability, competition, pricing, and service needs.
Each question gets a quantitative answer ranging from zero to 10. For instance, if you run a focus group and find that most potential buyers think the superior benefits of your product are worth a higher price, the quantitative answer to that question could be a 6, 7, or 8. If many do, give it a 3, 4, or 5. If only a few, a 1 or 2. If all do, a 9 or 10. Add up all the answers, and divide by the number of questions. If a product idea doesn't score a 6 or better, you shouldn't produce it until you've fixed the problems, Riordan advises.
Complicated? No. Rigorous? Yes. "Lots of our potential investments go through the process," says Bruce Blechman, president of the Capital Institute, based in San Mateo, Calif., a supplier of seed capital to entrepreneurs, "then they come back to us and say, 'I guess we don't have it together yet.' "