Plan your project, set your goals.
You've had a product idea; now what? It's time to do some research so you can determine your marketing strategy, set goals, and plan your project.
What's Already Out There?
A good place to start is to determine what is already on the market. Does your product idea already exist? If so, here are some questions you may want to consider:
How are existing products doing? Are they selling and to whom? How long have they been selling? Do they have good reviews? What are common defects?
What features are missing from existing products? Is there something customers want that isn't provided?
Are there social stigmas associated with this type of product? What about governmental regulations or IP protections?
If your product doesn't already exist, you may want to consider:
Why doesn't this kind of product already exist? Is there a need for it? Is it feasible?
Are there similar products? How does my idea compare with them (similarities and differences)?
Are there people currently developing this type of product? What stage of development are they in?
Are there investors/researchers looking for something like this product?
Is my product patentable? How can I protect it from being copied?
Oftentimes, people think they have to invent something entirely new in order to have a good chance at succeeding. This isn't exactly true. You can be successful enhancing something that already exists. However, just copying someone else won't every make you successful. Aside from being morally (and legally) wrong, it doesn't make business sense. If you can create something better, you'll go much farther than if you just copy what's out there. The world needs more innovation, not emulation.
Understanding your customers is vital regardless of whether your product already exists or not. You have to know who they are/will be and what needs they have. You also need to know how to reach your potential customers.
It does no good to create a product nobody wants. Before you spend time and money developing a product, make sure it is wanted!
You also need to understand the demand for your product. Is this something you'll sell once every 20 years or once a day? Are there millions of people who want this product or just a handful of companies? Is demand for this product seasonal?
Like it or not, sooner or later you'll be competing with somebody. We all want to be the first into the ocean and have the entire market all to ourselves, but that will never last. You have to understand who your competitors are (or will be) and how you will compete with them.
Don't be afraid of competition because it actually makes the market stronger. However, you have to be realistic. Know what you're up against and honestly evaluate if you're capable and willing to fight that battle.
What Do You Want to Get Out of This?
I know what you're thinking: "Duh, I want to get rich!"
But seriously, if you're only in this for the money, you're much more likely to fail. Developing a new product is difficult and risky. If your heart isn't in it, you give up more easily. Plus, if things don't work out financially, you'll feel like a failure and be full of regrets. If your heart is in it and you have more on your goals list than just "make money" you'll still have satisfaction and success whether you reach your financials or not. Yes, we all want (and even need) to make money, but what else do you want to do? Are you developing a new product because you want to improve the livelihood of people? Are you trying to improve the environment, benefit society, help underdeveloped communities, etc.? Maybe you want to be self-employed in order to fit your lifestyle better. Whatever your desires for wanting to create a product, take note of them all, not just the financial goals. Five years down the road, you may be hitting your financial targets but missing out on your deeper burning desire for a balanced life, improved society, cleaner environment, happy customers, etc. Is that really success?
With regard to financial goals, you'll want to estimate what your return on investment (ROI) will be. If you're going to take out a loan to fund this project, you need to know if you're going to be able to pay off the loan. You don't want to be paying interest for the rest of your life! Remember that you can't predict the future. Make an honest, educated guess about what your ROI will be and then take a look at the risks.
Pop culture wants us to believe that we can have anything we want if we just believe in ourselves. Sorry, that's not the formula for success--especially when it comes to product development. Although there's definite value in optimism and self-confidence, it won't make risks go away.
You are about to take tremendous risks! All investments involve risk and sacrifice. It's important to understand what could happen so you can be prepared to meet it. The more honest you are with yourself about the risks, the better your decisions will be.
Risks can threaten any aspect of your product, business plan, or life. We tend to think of financial risks most often, probably because it is most obvious. However, there are also less obvious and more damaging risks. Will you be risking a valued relationship? Will you be risking your health? Will you be risking environmental disaster? Could your reputation get smeared? It's true that financial risks are important to assess, but don't only think about money!
Identifying and evaluating risks is just the first step. You also need to determine how you will deal with each risk. There are multiple ways to deal with risk:
Understand the risk and take it anyway because you think it is worth it.
Some risks just aren't worth taking so don't participate in activities that involve those particular risks.
You may be able to still participate in activities that involve risk, but you can pass the risk to someone else. This can be through liability waivers, insurance policies, third party contracts, etc.
Take actions that cut the risks down to manageable sizes.
It's a good idea to determine the scope of your product creation project. Many people are easily distracted. As ideas and data begin flowing, it requires disciplined focus to be efficient. Decide ahead of time what your product is and what it isn't. Know what you want to accomplish with this project and what you're ok with postponing for later (or even avoiding altogether).
Timelines are helpful for creating motivation. Deadline can help you maintain your focus. When you're trying to accomplish something by a certain time, it leads you to actions and effective strategies. Just think about how "productive" you are getting ready for the day when you have no plans or obligations. You may lay in bed for half an hour thinking, wake up and take your time cooking an elaborate breakfast, etc. Before you know it, it's 2:30 in the afternoon and you're still in your pajamas. In contrast, think when your alarm didn't go off and you have five minutes to get dressed, eat breakfast, and drive to work -- your actions and strategy suddenly change drastically. That's the power of deadlines and it can be positive or negative. Push yourself enough to be productive but not so much that you end up neglecting important things.
Assemble Your Team
At some point during the Define stage, you'll need to determine your team. You won't get very far alone. Think about what skills and resources will be needed to be successful then compare that list with your strengths and weaknesses. If you don't want to work on strengthening your weaknesses, you will need to find a teammate (or more) who fills those needs, but you'll have to work out a mutually suitable compensation plan. In selecting team members, make sure to evaluate personalities and moral character. Simply having strong skills isn't enough; you need to get along, maintain your reputation, and have a relationship of trust.
Outsourcing can be a good option when you either lack the ability to do certain tasks, find it'd be cheaper than doing them yourself, or simply just don't want to hassle doing them. During your project planning, getting a good idea of what tasks you will outsource can help you in setting your budget.
Now that you know what you want to accomplish, it's time to go to the Measure Phase where you look at customer and processing requirements.