How does one know if it is worth to venture into a product?
I know that a particular product will be useful to a whole group of people. However, I am uncertain if once the product is made, the people will purchase the product.
Prior to making the product, how can one know (if at all) whether a product will sell?
The product I have in mind is a data analysis system that has not been implemented, or if someone has done it, it has not been popular. My target audience is academia (students and scientists) and perhaps research based companies that need to do data analysis.
3 Answers
Kudos for wondering about the right things before getting started.
You're probably not going to get the absolute you want, but here are the first things to check, in this order.
- Ask your potential future customers. Find them, and talk to them about what your product will do, and talk to them pricing. Find out if (1) they'd be willing to purchase it, and (2) what they'd be willing to pay. Have a conversation about it with them - maybe offer some options and see what they'd be most likely to bite on. Bonus: this doubles are an early marketing effort, which you need. If possible/practical, get them to commit in some way to purchase once you launch. This process can be more valuable than you might imagine.
- Find out if your market has already shown a willingness to spend money on the same, or similar offerings from competitors at a price-point you could live with.
Good luck!
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how would one evaluate the value of the product? All my product does "in theory" is make life easier for people. i.e. they can do it themselves too, but not as easily(or quickly). – Picakhu 13 years ago
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Point 1, addresses this, but you'd find out by asking those who would buy it if they would find that improved ease valuable enough to pay for, then ask them what they'd be willing to pay for it. Maybe offer them some pricing options and gauge their reactions. Ultimately your customers are who define value, this is just a means of finding that out before they can buy it. – Carson McComas 13 years ago
You can guesstimate how much your product will be worth to someone (or their employer) by figuring out how much their time is worth, in dollar terms, and multiplying by how much time your product will save them.
Based on that, I'd guess different groups will find different prices acceptable, and the general trend will be:
Companies > Faculty > Students
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The advantage of this is that in terms of purchase capability(number of people), Students>Faculty>Company – Picakhu 13 years ago
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Exactly, which is why you often see software with academic discounts. – Bob Murphy 13 years ago
Carson McComas makes some great points, but the tricky thing is to find enough people to talk to to get a decent sample.
One popular way is to create a landing page advertising the product, making not just the features/value proposition of the product but also the pricing clear (eg. make sure that it's clear that it's not free and show your current thoughts on pricing) and provide a "sign up for the upcoming beta" form collecting email addresses. Put a hundred dollars or so into Google Adwords to drive traffic, and promote it as unspammily as possible elsewhere -- Tweet about it, if you're a regular participant in relevant forums then say there that you're working on it, that kind of thing. If you have a relevant blog, promote it there. You can probably think of many other ways.
Email the people who sign up, and engage them in conversation (if they're willing to reply). Make sure that they really are willing to pay. If it feels OK (from the conversation you're having), discuss the pricing options you're considering, and ask for their thoughts. Also discuss feature sets and possible future directions if you want, this can give you a better idea of your potential market and might change your mind about the shape the product should take. Ask them what they'd do with it, perhaps they'll surprise you!
If it turns out that everyone says "cool, but I'd never pay for it", you can always discontinue the landing page and (if you feel it's appropriate) drop the people who signed up (or at least those you were corresponding with) a note saying "sorry, there wasn't enough interest".
