At my company, I made sure we never move forward without thoroughly validating our client's product idea and creating a working product concept. It’s a step you should also be very thorough about; it will save you thousands of dollars and prevent numerous changes at the development and marketing stages. We’ve had our fair share of clients, more than 200, to be exact. And while working with them, we’ve developed an inner product discovery framework that helps us find out if our client’s idea is something the market needs. I call it a 360° Product discovery. I won’t bore you with all the things that we do and check in the process, but I would love to share the green flags that I found to be crucial. They are easy to follow and will give you clear instructions on how to validate your new product idea. So, let’s see if your idea is worth it! There Are Similar Products on the Market Green flag 1. There is a popular myth that to succeed your product idea has to be one of a kind! But that’s not always the case, believe me. If it seems that no one has thought of it yet, there’s a great chance that there’s no demand for this product on the market. (Don’t worry, I’ll talk about how to check this a bit later). But we don’t want to invent a wheel either.  Let's say there’s competition. You are free to implement a similar idea, if: It’s obvious that your competitor is not doing a good job. Maybe, their marketing, sales, UX, you name it, are just poor and you can do it better. They are oriented at another market, not the one you’re aiming at. For some reason, they can’t solve the whole problem. They lack important features you know how to implement. You have a solid Unique Value/Selling Proposition that makes you stand out. really You create a similar product but for a different niche. However, there’s one exception… No Multi-Million Dollar Companies Have the Same Product Green flag 2. You can compete with slightly bigger players, but not with giants like or , or companies that have received massive investments. Remember, they will always have immense resources, both in terms of people and finances. It’s hard to compete with them, since they may be far ahead. Google Apple If they are creating the product you were thinking of, it’s highly unlikely you can take the niche. I don’t want to discourage you from aiming for the stars, but please, assess your chances carefully before going into business with the competitors that big. The only exception is when you offer significant added value with: a distinctive cool feature an optimized process an improved user experience or a strong focus on a specific problem with a deep understanding of it Then you have the opportunity to carve out a niche and sell it to a bigger player later. . Your Product Offers a Simple Solution Green flag 3 If your product idea is actually new and no one has implemented it yet, it doesn’t automatically mean it has no potential. But it will need even more thorough validation. The criterion of simplicity and efficiency is a good one for existing, as well as pioneering ideas. Let me tell you a story here. A few years ago, I had a client with a very ambitious and complex idea. They wanted to create a product that would improve their clients’ supply chain transparency. It was meant to show where and how companies get their goods and services and even how much CO2 they emit in the process. The concept is great, however, the company is still on the hunt for their first client. The services they offer cater mainly to large corporations. Unfortunately, these giants lack flexibility; they often resist adopting a product that requires significant changes to their established processes. So, before you go on with the product development, make sure it’s not complex to apply for your potential clients. Moreover, it should also be more effective in addressing a broader or a narrower range of problems (depending on the solution and its focus). The Problem Your Product Solves Is Big Enough Green flag 4. During our discovery phases, we test our clients' product ideas with real users. Sometimes, in our conversations, it becomes clear that people are already using a different solution and don't feel the need for a change. For them, the issue was simple enough, so they came up with the solution on their own. It’s not about the problem being big – it’s more about it being real, urgent, or recurring for a large enough group of users. To ensure that, try testing your product idea with real professionals. You don't necessarily need an extensive hour-long interview; just have a quick chat with your colleague, friend, or a friend of a friend, and find out how they are already tackling the problem. To gain a deeper understanding of the pains, I offer our clients to make a so-called Problem Statement Canvas. It can be a presentation, document, or just a note where you address the questions: I’m sure this will help. Remember, no pain, no game. You Know How to Make Money Off Your Product Green flag 5. For me, it’s one of the most important signs of a promising idea. Businesses exist to exchange value for money. Of course, your product doesn’t have to be monetized immediately in the first few months. But you should be sure that people don’t just need your product; they are ready to pay for the services it provides. It means it’s good enough and there are no free alternatives out there. Here are the ways to find it out early on: Analyze if your target audience can afford the solution. Define your business model and calculate market volume (TAM, SAM, SOM), unit economy, profit margin, and ROI. Understand what’s important for investors and what’s the best time and approach to reach out to them. Prepare your marketing strategy and budget for each stage of your journey to secure the investment in advance. You Did Your Research and Everything Adds Up Bonus green flag. It’s okay if you haven’t yet, but please do. It will give you so much perspective, I promise. Apart from the Problem Statement Canvas, you can also do: Market analysis and industry trends Technology market and trend analysis Competitor research, including SWOT analysis Target audience analysis Pricing analysis Legislative and regulatory research Stakeholder requirement analysis For a competitor's analysis, make a matrix like the one below. You can choose your own two metrics, for instance, speed and price. Put your competitors in 4 squares: slow/expensive, expensive/fast, fast/cheap, cheap/slow. The visual mapping will help identify the gaps. Where are most of your competitors? Where do you want to position your product? And the last one, try to answer those questions: Who are we doing this for? Are we creating a need or does it already exist? At what point will we think that our product is successful? Describe what your product might look like: main screen and key user interactions. There You Go! If you have the majority of green flags, congratulations! There’s a high chance your product is a great market fit. If you feel most of your flags are red, no worries. It only means your idea may need a bit more thought. But you can still succeed. Sometimes, even the most unbelievable ideas, especially in tech, become game-changers and revolutionize the field. At the end of the day, the main criterion is how much you believe in your idea and how much energy you have to work on it.

5 Green Flags That Show Your Product Idea Has Potential

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

Untitled Story

A Step by Step Guide to Early Customer Interviews

A Credible Framework to Validate Startup Ideas

A Gread Idea Validation Method Used By Stripe

A Weekend Website Project I Built With $14 and No Coding Experience

How To Easily Validate Startup Ideas

A Step by Step Guide to Early Customer Interviews

A Credible Framework to Validate Startup Ideas

A Gread Idea Validation Method Used By Stripe

A Weekend Website Project I Built With $14 and No Coding Experience

How To Easily Validate Startup Ideas

Light-Mode

Classic

Newspaper

Dark-Mode

Neon Noir

Minty

HN StartUps