Not long ago, on a bar with a friend (here forward called Rio), tired after a work day we were discussing about what could we create to obtain a sustainable way of living.
Chatting about products and strategies we started to gather certain assertions/rules, so that we could evaluate potential projects by matching them to this rules and learning if they were a good fit.
Here they are with a bit of explanation. Note that we obviate generating value to a significant market as the first and most important condition.
1. Prefer not having to generate content manually
Rio was radically positioned on this one. The product builders and maintainers should not have to generate / insert / find / upload content manually.
Content should be provided automatically from trusted sources, like users or third party services or sources.
I don’t agree with this one completely. I think that it is good if you don’t have to generate content, but I also think that there are opportunities for great hand curated/created quality content. At least, if you are going to avoid that creation/generation, you ought to have a good way to distinguish good content from bad one.
2. Software as a service
This is important but probably very difficult. The feasibility depends on the product you provide and also depending strongly on the demographics and habits of your market.
The benefits of making a SAAS product are obvious. You perceive a stable income through time less vulnerable to bad sales periods. In any case, the important thing is being able to generate revenue of any kind.
3. Generating an ecosystem
Being able to generate an ecosystem of services and products around your business should help to increase your business core visibility and usefulness, both being a way of generating more value and being channels to market your core competencies.
This strategy is possible in almost any business tool and used vastly. Related to this, it is important to realize how important keeping a good api is, both for you to build that ecosystem in a decoupled way, and also to allow others to build it for you while getting some revenue and generating value for your business.
4. Ease of access to new functionalities
This goes tied to the SAAS one mainly. If you have a SAAS service make sure that you are able to provide updates, fixes, and new functionalities. Also, when upgrading, make sure your users perceive the improvements so that they learn about the additional value and keep subscribed.
In the case of a sales based product, updates are also really important. Keep updating until a certain point for functionalities and provide security updates but start developing a new version with more significant improvements to make sales again.
With sales based services this point is important too. Constantly improving the sales platform silently and updating to make generating sales easier.
5. Who receives value, pays for it
I’m not sure how I feel about this one. Rio says -from experience- that the revenue source must be attached to the value receptors, no third parties or being an intermediary. He says that this way, your revenue source is directly related to your value production and you are not exposed to several factors that could cripple your earnings.
For example, being an intermediary renting flats, you have two important things to worry about:
- Owners wanting to rent their flats (and that they do it through you)
- Customers wanting to get a flat (and that they do it with you)
Both worries related to a single revenue source and value channel.
I think that he is right, and I know he talks from experience but there are thousands of businesses that work like that and are doing fine. So I think I would classify this one as a nice to have.
Those are the most important rules we noted down for evaluating ideas, among other things.
It would be great to hear some comments and discuss about it. Specially if you have your own experiences.