Demanding the next big thing

Demanding the next big thing

So you've had a big idea ... and people like it. But whether you'll make money depends on the crucial distinction between interest and demand, says unstructured data analysis company Pingar's senior product manager and former startup co-founder Paul Norrie.

In his years in the tech trenches Norrie says he's seen a lot of confusion between the two. "Everyone is interested in things, but very few people fork out their hard earned cash on something, even though they say they will."

So how can startups tell the difference between interest and demand? The key is to get out and ask specific questions, then show the numbers are on your side, says Norrie.

"It's about producing a revenue forecast from the bottom up. Instead of saying, 'I read a Gartner report saying this market will be worth a certain amount by 2019 or is growing at five percent CAGR, you're starting at day one. 'How many of these will I get, how many doors will be knocked on?'

"I can't just say, 'I'll have five million subscribers to my service by the end of the year'. How many can we reach out to in one day or one week or one month? How many will become customers and how long will it take? The way you get answers to that is you ask very direct questions of people."

And that's the difference between a polite coffee chat and assessing demand, says Norrie.

"Suddenly you're asking for something that looks like a commitment," he says. "It's not, but it puts people on the spot."

The next step is to make your product better than "just good enough", he says, adding that's a customer perception that's tough to beat.

"The people you have to convince are the users and the buyers. You have to look at existing satisfaction levels of these two groups. Being good enough is hard to compete against because you're a risk, you're new.

"But are you compelling enough? When you're designing your product you need a compelling reason to buy. You can't just be better, faster or cheaper, you have to be compelling to beat something that is good enough."