I launched my most recent app a few days back. The idea is to aggregate all the business related videos, compile the meta data and also generate more meta data and present to the users. I have been working on this idea for around 7-8 months now and in spite of providing a meaningful service, it is less likely to generate any meaningful revenue.
Learning from mistakes, I wanted to note down tests that my next idea is going to have to pass before I pick it up for execution.
1) Good is not good enough - Everyone have ideas. I have a lot of ideas - over 100 in my list. The next idea that I pick will have to be the one that I think makes most sense from business perspective. It sounds more like a common sense but I shamelessly acknowledge that I made the mistake of picking up some ideas in past that I thought were going to be 'quick ones' rather than 'best ones'. Not anymore, pick your best bet.
2) What’s the problem? - If I cannot explain the problem, my idea is solving - I ain't doing it.
3) Show me the money - I am not building a next-generation-free_of_charge-consumer-space-social-media-web app as my next venture. In my opinion playing field is not level anymore. There a lot of big players. Players with venture money and super smart mentors. I am not saying its impossible, its just that chances of success are too slim. Like Felis Dennis says - "You may not necessarily want to be in a glamorous sector of any market, and they are often very crowded"
4) Where are the customers? - There should be a market for what you are building. What’s the best way to validate that - What (What businesses) are going to be your competitors? Seth Godin says - "Competition validates you. It creates a category. It permits the sale to be this or that, not yes or no."
5) Validate the traffic from Google Keyword tool, compete.com and quantcast to make sure you get a feel of the market.
There are a lot of great articles from successful people, sharing experiences on how to be successful or how to execute an idea. The intent of the article above is to list tests you can run on the ideas in your pool of ideas and pick THE one that has higher chances of success.
What else do you do to make sure idea is worth executing? That it is worth spending 9-12 months of your life before you see the first dollar.
Here are my tests for a new product:
I once spent a year on a product that nobody wanted - so I'm careful not to repeat that mistake.
Points 1 and 2 can be covered by building a web site for the product and asking people to sign up to be notified when the product is ready - if people are signing up it's a good indication that 1. people are interested and more importantly 2. I can successfully get the interested people to my web site.
Point 3 is obviously important if I want this to be a successful business.
And point 4 let me 1. get paying customers to validate the idea (you haven't really validated your business idea unless you got someone to part with some hard earned cash) 2. get feedback from real customers in order to build the product real customers want as opposed to what my imaginary audience wants.
I love this question and the answers that been given. I agree with many of the answers.
Below is my personal list:
1) Market size must be at large (for example X billion). It's hard to know the size of a market. But there are ways to estimate it. Companies like Forrester make research reports (i.e. "Cloud computing will be X billion in 2011"). Other answers have mentioned using Google keywords, Quantcast, and looking at competitors. I agree with those as well. Regardless of how you measure the market, the point is to go after something that can generate large profits. There's no point being #1 at a business that makes $1,000 per year.
2) I am passionate about the product/service. Natural desire is so important. It gives us super human powers to work long and smart. The alternative is to be "kind of" interested. But when failures happen, there is a tendency to give up. Or you might not try as hard if you don't care about the service yourself.
3) Product/Service is used often. High retention is important to me. If a customer doesn't use the product/service regularly then the business isn't sustainable.
I'm seriously debating adding this as a requirement:
4) Have a price tag. Don't make a service that is free and shows ads. And don't assume Google or a dumb media company will buy your company for your technology or users. It makes sense to sell things. But it's so tempting to just "build stuff" or "get lots of users" after seeing that Google or dumb media companies do acquire companies that don't make money.
Some other important questions around the idea are:
Some other simple points:
barriers to entry, legal, how easy it can be implemented (is what I am trying to do actually able to be implemented with current technology etc.)
Your list makes sense, I'd add some more points/tests to make. My main reference in Ash Maurya's Lean Canvas :
One more thing that I think most of entrepreneur hate but you have to do: Build your own Startup Death Clock. Check Jason Cohen’s wonderful blog: http://blog.asmartbear.com/death-clock.html
It has to be viral. Not viral in the sense that I have added a facebook 'like' button. Not viral in the sense that users can email their friends about it.
But viral in the sense that users will advertise it as they use it. Jason Cohen wrote about this. If you build it, they won’t come.