A checklist when vetting product ideas

Discussions
#1

I’m currently going through the process of researching different niches and trying to find a viable business and product idea. Based on books I’ve read, podcasts and other sources here is a list of requirements I would like a potential idea to meet.

  • Must be selling to small businesses with employees.
  • Solves a problem that businesses are already searching online for.
  • There must be an existing marketing channel to reach customers.
  • Must have a recurring revenue.

Along with those base requirements I have the following list of things that are ideal but not required.

  • Solves an urgent problem that requires a short sales cycle.
  • High pricing potential to be able charge a higher price and sell on value.
  • Low cost of acquisition, some factors that reduce cost of aquisition are:
  • Having a high urgency product.
  • Selling to businesses with a single decision maker.
  • Low cost to service a customer, some factors that reduce this cost are:
  • Low onboarding cost
  • Low cost of support whether by phone, email, chat etc.
  • Low cost of support staff such as a DBA or IT infrastucture.
  • Have a unique and simple value proposition.
  • Low time and money to get to market.
  • Long term potential, try to avoid building on another companies API or platform

When it comes to evaluating markets and ideas are there any other factors that should be taken into consideration?

#2

@kulmala recently posted a PDF checklist that she came up with for evaluating product ideas. I think there’s no such thing as a complete list, but this is a good starting point to get you thinking about the subject.

http://www.happybootstrapper.com/saas-idea-evaluation-checklist/

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#3

Thanks for that, I signed up to get the checklist and it looks really good. It seems to hit a lot of similar points to my list which at least means I’m on the right direction.

#4

That looks like a fairly good list. Here is another one I wrote:

#5

My 2 cents would be to not totally discount ideas that don’t fit into recurring payments nicely. Recurring is great once you reach 1000 customer * X. However, you have to actually get there and the SaaS model usually means you’ll be very cash strapped early.

On the other hand, when I launched HelpSpot I made more money in a month than I was making at my previous job in a month and from there it was easy financially to keep going. If it had been SaaS I would have made $200 that month. Now, if I had hung in of course now I’d be making much more money, but that’s a big IF.

Even if you do go pure SaaS it might be smart to offer upfront yearly payments at a discount in order to give you positive cash flow.

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#6

Thought this was an interesting article:
'The key to making a fortune online, Williams told the XOXO crowd, is to remove extra steps from common activities as he did with Blogger.

'“Here’s the formula if you want to build a billion-dollar internet company,” he said. “Take a human desire, preferably one that has been around for a really long time…Identify that desire and use modern technology to take out steps.”'
http://www.wired.com/business/2013/09/ev-williams-xoxo

Billion dollars or not, if your app doesn’t make something simpler for users, that should be a signal to redesign/reconsider what you are making.

#7

Not sure when we’ll get our hands on it publicly, but Jason Cohen’s talk at Microconf (Las Vegas) this year was about exactly this, and absolutely gobsmacking. You can find Christoph’s notes of the talk here.

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