lecture 2 Flashcards
feasibility analysis
the preliminary evaluation of a business idea. the pitfall is that it is fundamental, but feasible does not mean successful.
product/service desirability
understanding if the product/service is desirable and serves a need.
product/service demand
understanding if there is demand for the product/service.
product/service feasibility
an assessment of the overall appeal of the product or service being proposed.
“Mom” Test
a new, quick, practical guide that will save time, money, and heartbreak. before going into any conversation, ask yourself ‘What do I want to learn from potential customers?’ also, what customers say could be different from what they think. ask about specific habits in the past instead of searching for opinions about the future. it is better to talk less and listen more, take notes and record the conversation.
concept test
a one-page description of the product/service idea that is distributed to people who are asked to provide feedback on the potential of the idea. it can contain the product, target, differentiation, experience/skills, and price.
surveys
effective in validating what you have learned from face-to-face interviews.
landing pages
can help you assess how many people request additional information about your future product/service. it is a webpage of your product/service that appears in response to clicking on a search engine, marketing email, or an online advertisement.
text ads
show up when a user is searching for a product that is close to your idea in a search engine. if searchers click on the ad, they are taken to your landing page.
confirmation bias
the tendency to search for information in a way that confirms our preconceptions and beliefs. to avoid this, you should use triangulation.
triangulation
considering different sources and alternatives that could confirm the validity of your idea.
perceptual map
financial feasibility analysis
has three components; (1) projections, (2) financial performance of similar businesses, and (3) overall financial attractiveness is connected with promising opportunities (possibility of a rapid growth in sales during the first 5 to 7 years in a defined market, high percentage of recurring revenues, and the ability to forecast income and expenses with a reasonable degree of certainty).
break-even point
the point at which total cost and total revenue are equal, ie. “even”.
contribution margin
price minus total variable expenses.
