Companies can spend an entire round of funding or an entire R&D budget developing a product. If they haven’t asked, “Who needs this product and how much are they going to pay?” then they might be flushing their hard earned money down the toilet.
Define the target market
Successful products can’t be everything to everyone. Successful products focus on solving a well-defined problem, very well, for a specified group of target users. When a company first conceives of a product, they needs to answer the following questions:
· What problem will the product solve?
· What value will the product deliver?
· To whom?
· How big is this group?
· What are their spending habits?
Take, for example, Google Glass. Google Glass was developed in a Google X laboratory. The amount of money spent on developing this product is undisclosed, but we do know that Google spent $2.18 billion on R&D in Q4 2014 alone.
Forbes contributor Ian Altman summarizes the reason for Google Glass epic failure: Google failed to explain, “What problem does it solve or why would I need it?”
By answering these questions up-front, companies can be sure that there is actually a market for their product. Very few companies have R&D budgets the size of Google’s. Don’t spend a dime developing a product until these questions have been answered.
Need help defining and validating your target market? Contact KolliFAY Interactive.
Before you spend a dime, let's talk. Together we can determine: If you build it, will they come?