Tim G Dowling Weblog

Demand Intelligence for New Products

In looking at a lot of startups it's fun to bucket the startups into three categories; 1) Solves a problem people want solved or 2) Provides a capability people want, or 3) neither 1 or 2. Of course you want to avoid number 3. And with in either 1 or 2 you may have a large market or small market. These are the big questions to get answered. Many VC's answer these questions with money by funding a startup and the good ones actually only invest when either 1 or 2 is validated thru delivery and market traction or market evidence from another company. To help get my head around this early in an idea I have been using the Internet and keyword traffic to help give clues to weather an idea is a 1, 2, or 3.  The theory is simple; If people aren't searching for something directly related to your idea, it's likely that demand for it may be low to non-existent. Of course this can be proven wrong, so it does require some deeper thinking. As an example I show below the Overture tool for looking up traffic on keywords for "Online Family Calendar". The nice thing is you can actually see more of the specific terms that people are searching on. So for example if you thought the world wanted an Online family calendar you might get a clue about that from the terms below. 300 people/month isn't too many. You might search on family calendars and find a lot more, but then you're really trying to convince those folks they need it Online. Which is a big assumption. It's better to capture demand rather than create it. Experimentation is highly encouraged because you might tap something that has a little search volume but is in high demand due to the belief that a product doesn't exist.  A warrning with this technique is that it will not work for social networking services since peopel really don't search for social networking in search engines.

At the end of my analysis for Online Family Calendars I have concluded it's not a good idea. While there are plenty of people who want an online calendar the family side of scheduling seems to belong to paper right now and if you talk to the owners of those calendars they view putting it online as a problem not a help. It turns out the searches below tend to be husbands trying to get there wives to put the calendar online..in my experience that is an up hill battle :)

Well have fun with this...

Searches done in September 2006
Count	Search Term
252	online family calendar
41	free family calendar online

The Focused Startup

Really should there be any other kind of startup? Starting a new business is fun and often people start businesses with an idea in mind and it often can get very complex very quickly. After being guilty of this a few times myself, it is very clear that every business needs one simple focused idea that works to get off the ground. Finding that idea and elminating all others is critical. Believe me they will come up. "Oh we could make money if we did this other thing with it too!" is the cry you will hear. But doing those other things will mean sacraficing doing the most important thing very well. You have to choose one and find out if it has traction in the market. Once you really know what will work in the market place then nothing but that focus matters to get a company off the ground.

Drive Hard, Manage Loosely

For those of you running software or internet services, I been playing with this notion inspired by John Ludwig of creating a culture in our business of creativity. Google, of course, is the company that seems to be doing this. The elements seem to be basic. I think they break down into 1) A clear vision for the company, 2) A mission for each team that span multiple releases, and 3) An abundance of resources and time to try both planned and unplanned things internally and in the marketplace.

The basic notion is that it's better to get a lot of products or features out in the market and let the market place tell you what they like or don't like. This is very contrary to the days of focus group planning and building what you think is the perfect product. It's actually the opposite. You need a way to proto-type and productize faster and let the marketplace tell you which ones to invest in. More on this later....