Lack of demand in the marketIf a product or service does not solve a real problem or meet the needs of your target audience, the likelihood of success in the market is extremely low.
To assess the potential of an idea:
Lack of uniqueness or competitivenessIf you offer nothing new to the market, if you only repeat existing solutions without adding a Unique Selling Proposition (USP) to your product, if your offer is no different from your competitors, your startup is likely to face difficult times.
It is important that your product or service has a clear advantage over similar offerings in the market.
Low competitiveness of a business idea can be identified by conducting:
- Competitor analysis
- SWOT analyses (identifying the strengths and weaknesses of your business and comparing them to your competitors)
- Market research to find opportunities to differentiate your product or service
Lack of monetisation potentialBusiness for business sake: the idea has low commercial potential - it is not clear how it can be monetised, it is difficult to calculate and predict how much income it will bring. Under these conditions, your business is doomed. It is important to have a clear idea of how and how much you will earn.
In order to understand how a business idea can be monetised:
- Conduct an analysis of business models to find the most convenient and acceptable way of monetisation
- Plan sales and make projections of possible revenues based on market research and competitor analysis.
- Conduct financial analyses to estimate costs and expected revenues
Lack of understanding of the market and target audienceWho is your customer? What does he or she care about? What can't he live without? How can your business idea help him? If you haven't sufficiently studied your target audience, their needs, preferences and behaviour, you probably won't be able to offer a product that meets the real requirements of the market. Of course, when promoting your business you will test different parts of your business idea, but only a clear understanding of the ‘pains’ and problems of your target audience will make it successful and competitive.
To accurately and diversely assess the target audience, niche and market as a whole:
- Identify and analyse demographic, geographic and behavioural characteristics of the selected target audience
- Analyse data on consumer behaviour, preferences and buying habits