Assessing New Product Opportunities: A Guide to Structured Product Assessments

In most companies there is no shortage of ideas about new product opportunities or how to improve current products. However, not all these ideas are good and in most organizations there is a shortage of engineering bandwidth to convert the good ideas into products.

Thus, it is very important for companies to develop an efficient and effective mechanism for evaluating new product opportunities and product functionality enhancements so that your company can prioritize new product development and current product enhancement activities in a way that optimizes its usage of resources and takes advantage of your company’s competitive advantage in the market place.

To be effective, a product opportunity assessment must be able to answer the following questions:

1. Value Proposition: What problem(s) will this product/new product functionality solve?
2. Target Market: Who does this product/new product functionality resolve this problem for?
3. Market Size: How big is this new product opportunity? Or does this product functionality enhancement change the size of the current product market? If so, what is the new product functionality enhancement’s incremental effect on market size?
4. Metrics/Revenue Strategy: What will determine the success of this product/new product functionality?
5. Competitive Landscape: What alternative products already exist in the market to help resolve this problem?
6. Product Differentiation: What makes your company’s product different from other products in this space? And why is this differentiation important?
7. Market Window: Why is this the time to enter this market or introduce the new product functionality?
8. Go to Market Strategy: How will you get this product to market or provide the new product functionality update?
9. Solution Requirements: What factors are critical for this product or product upgrade to be a success?

By identifying the answers to these questions in the product discovery phase, your product and management teams will be forced to maintain a big picture view, which will ensure that they develop a realistic understanding of what the true value of the product opportunity or enhanced product functionality is for your company and decrease the likelihood that your company gets side-tracked chasing unneeded product functionalities or market opportunities that don’t exist. Knowing this information early-on will also improve the efficiency and focus of product planning and development, which should enable the product team to design and develop a flexible product that meets its target customer’s needs and is easy to use.

If you are interested in learning more about product management, you should read my previous blog post on designing and implementing a product scorecard. Similarly, if you are interested in learning more about the product management process and organization management design, I highly recommend reading Inspired by Marty Cagan or reading his company’s blog.