technical feasibility

Test 3: How to Check Technical Feasibility of Your Business or Technology Idea

Test 3: How to Check Technical Feasibility of Your Business or Technology Idea

Can it be built? Should it be built?

[This post is part of a series of blog posts titled “6 Tests to Know Whether You Should Pilot Your Idea” and focuses on Test 3: Technical Feasibility. The full blog post series is available in a downloadable ebook. It is covered in more detail in the online course Opportunity Assessment for Entrepreneurs and Innnovators. Click here for a summary overview of all 6 tests, here for the previous post (Test 2: How to Check the Competition for Your Business or Technology Idea) and here for the next post (Test 4: How to Quickly Check Financial Viability of Your Business or Technology Idea). Subscribe to the Moolman Institute newsletter (in the footer at the bottom of the home page) to be notified first when more content like this is posted.]

Why is this important?

Should it be built - chain fork image

Sometimes there are technical hurdles, laws of physics or common-sense reasons why your business or technology idea is not feasible. Whilst they might be blindingly obvious in hindsight, they are often difficult to identify upfront.

Take scalability: many things work on small scale but become non-viable when scaled up.

For example, many food delivery startups fail due to delivery logistics challenges. Profitably scaling any delivery service is already hard (think travelling salesman problem). When you add in the prepared food supply chain (fresh ingredients, fresh preparation, packaging, food temperature management, etc.) and an impatient & hungry customer, it becomes an extreme logistics challenge.

Similarly, the battery industry has seen many major lab-scale technology breakthroughs fail to transition to commercial scale (see e.g. Envia and A123).

A recent study looking at US battery technology startups noted that only 2 of 36 had positive exits (a positive return on investment). “Commercializing new materials, both inside and outside the battery space, is notoriously challenging. This is true both for big companies and startups…”

The conclusion? You’d much rather find out about critical flaws (what one battery industry executive called “doom factors“) before you spend time and money on your first prototype.

How can I check this quickly at low cost?

How to check technical feasibility image

You should answer two main questions: A. Can it be built; and B. Should it be built? Here’s how:

A. Can it be built?

To answer this question, look at 3 areas: (1) Technical feasibility; (2) Scalability; and (3) Regulatory constraints.

1. Technical feasibility

Does it require or use any new or unproven technology, or is it doable with existing technology? If it requires new technology, will it require any major breakthroughs? Is it technically feasible at all?

To answer this, you can:

  • Search online;
  • Speak to a technical expert under a confidentiality agreement. For example, you can speak to a university professor – they are usually willing to advise. You can also consult a rapid prototyping facility or a technology station or similar;
  • Speak to a company that might be able to manufacture this type of product – but you need to be careful about protecting your intellectual property, since such companies are in the best position to copy. (This is less of a risk if the company is in a different industry.)

2. Scalability

For hardware (products):

Can it be manufactured in large volumes (manufacturability)? Can it slot into existing manufacturing processes? The existence of large-scale manufacturing processes for something similar (even if it is in a different industry) is a major plus.

For services:

Can the service workflows and logistics scale? Review all the workflows and think them through at much larger scales (100x, 1 000x, 100 000x) – how exactly will they work? Think carefully about your assumptions here.

3. Regulatory constraints

Does the product or service require any certification, approval, accreditation against standards or similar? Are there regulatory constraints on any technical specifications that are not achievable (for example electromagnetic compatibility)?

B. Should it be built?

To answer this question, look at 2 areas: (1) Adoption probability; and (2) Common sense.

1. Adoption probability

Will customers adopt the new product or service? Everett Rogers’ diffusion of innovation model is an excellent framework for answering this question. He identified 5 factors that determine the level and rate of adoption of an innovation:

  • Relative advantage – How improved is an innovation over the previous approach / generation? This is Peter Thiel’s “10x rule” – your innovation should be at least 10 times better than the closest alternative to create a compelling reason to adopt. (The 10x rule is for disruptive innovations – the rationale is that you have to convince people to make a major change in how they do things or pay a substantial switching cost, and they won’t do it without a compelling reason. People are reluctant to change. For incremental innovations, the relative advantage can be smaller, but then the innovation might be more suited to licensing, partnering or as part of a set of offerings than a standalone business.)
  • Compatibility – What is the compatibility of the innovation with pre-existing behaviour or approaches? How easily can the innovation be assimilated into an individual’s life without requiring big changes in routines or habits?
  • Simplicity – If complex changes are required or the innovation is perceived as complicated or difficult to use, adoption likelihood goes down.
  • Trialability – How easily can the innovation be tested or explored? Can it be tested before people have to commit? Think of freemium models, free trial periods and so forth.
  • Observability – The more visible and obvious the benefits (especially to non-users), the greater the likelihood of adoption.

2. Common sense

How can you check this? Speak to people with the need (your ideal customers) about the idea. Ask them: if there was such a thing, would they use it, and how would they use it? (For example, there can be reasons of habit or culture or other constraints from a customer perspective that just kill the idea. In many African countries, mosquito nets are used for fishing instead of fighting malaria. And Google Glass is a classic example of cultural rejection.)

Real-world examples

Here are 3 examples illustrating technical feasibility, scalability and regulatory issues.

Technical feasibility – Theranos’ miracle blood tester

Theranos mini-lab image

Theranos promised to revolutionise blood testing by rapidly doing a full range of tests (250+) on only a drop or two of blood from a finger-prick, at a fraction of the normal cost. Sounds brilliant – and investors thought so too, pouring almost a billion dollars into the company.

The only problem? They never had the technology to do it.

As they started to realise how tough a technical problem this was, they started lying to investors and the public about their progress. Ultimately, they had a sham product in the front, whilst running tests on regular blood analyzers in the back.

Tens of thousands of people had their blood tested, with many receiving erroneous results and suffering unnecessary health scares, before the truth surfaced. Theranos CEO, Elizabeth Holmes, is now facing multiple criminal charges.

(You can read more about this macabre story here.)

Manufacturability – CST-01, the thinnest watch in the world

CST-01 thinnest watch in the world image

In 2013, a company called Central Standard Timing raised over $1 million on Kickstarter to build “the thinnest watch in the world”. Presenting what they said was a full working prototype (see the Kickstarter pitch video), they garnered a lot of enthusiasm and money.

However, even though they raised more than 5 times their own $200 000 budget for setting up manufacturing, they ran out of money before they could solve some intractable manufacturing problems. They went bankrupt in 2016.

Regulatory constraints – infant formula and regulatory ignorance

This example is from my own experience.

infant formula image

In the early 2000s, I became involved in a research project to incorporate probiotics (beneficial gut bacteria) into infant formula. The intention was to reduce the incidence of diarrhea (today still causing over 10% of deaths of children under 5 worldwide) in infants that are not breast-fed.

Over a period of 3 years, I successfully developed a patented encapsulation method to stabilize the bacteria sufficiently for incorporation into infant formula. My colleagues and I were thrilled and started engaging with infant formula manufacturers, only to discover that there is a short, fixed list of ingredients allowed in infant formula. Our materials were not on that list, and we could not proceed.

In hindsight I am at a loss as to why I did not engage with the infant formula manufacturers sooner. I think I was too busy enjoying the technical challenge. (This is a prime example of lack of customer validation.)

(* At least the story has a happy ending: my colleagues continued development of the technology and it was successfully commercialised in another application – nutritional supplements.)

And the multinationals can also get it wrong…

Technical failures are not limited to startups or research teams – the big multinationals can also get it wrong. Samsung’s Galaxy Note 7 had an exploding battery, Unilever’s Persil Power ate stains as well as clothes, and Fitbit’s Force caused severe skin irritation.

The lesson? Check technical feasibility early on.

Moolman Institute logo

In the next post in the series I discuss how to test your idea’s Financial Viability.

Let me know in the Comments section what you think of this method or if you have a good example of where things went wrong based on the Technical Feasibility criterion.

This methodology is part of a Moolman Institute online course called Opportunity Assessment for Entrepreneurs and Innovators. The course guides you step-by-step through the 6 tests and provides you with a set of practical tools and templates to make it as easy as possible for you to get to product launch or idea demise.

If you would like more useful content like this or get notified when the next course launches, subscribe to the Moolman Institute newsletter on the home page.

Posted by Sean Moolman in Opportunity Assessment, Technology Commercialization, 1 comment