technology commercialization

What next? What to do after you have applied the 6 tests to your business or technology idea.

What next? What to do after you have applied the 6 tests to your business or technology idea.

Is someone I don’t know willing to pay full price?

[This post is part of a series of blog posts titled “6 Tests to Know Whether You Should Pilot Your Idea” and focuses on what to do after you have screened your idea against the 6 criteria of the Moolman Institute Idea Screening Method. 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 and here for the previous post (Test 6: Do You Have the Right Team to Commercialize Your Business Idea or Technology?). 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 published.]

So I’ve screened my idea against the 6 criteria. What now?

How do you gauge if your business or technology idea really does have potential? Before you build a prototype and start with the Build-Measure-Learn cycle, test your idea against the 6 key criteria of the Moolman Institute Idea Screening Method:

If your idea passes muster on all 6 of these key criteria, you are ready to do a small pilot. (Note: you can also do a pilot if your idea is weak in one or more of the areas, but you have a strategy for fixing it.)

You want to test your key assumptions, and answer the question: Is someone I don’t know willing to pay full price?

Don’t worry about building a full product or service – build a minimum viable product (MVP). Remember that initially you can and should do things that don’t scale. And keep in mind that you are experimenting – you are in search of a business model.

“A startup is a temporary organization in search of a scalable, repeatable, profitable business model.” – Steve Blank


Final thoughts

Ideas without action image

Of course, nobody can predict the future – the best thing to do is to get in the arena and start learning. You will never regret it.

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” – Theodore Roosevelt


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 any of these criteria.

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
Test 6: Do You Have the Right Team to Commercialize Your Business or Technology Idea?

Test 6: Do You Have the Right Team to Commercialize Your Business or Technology Idea?

Is there a passionate champion? Do I understand what skills are missing?

[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 6: Team. 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 5: How to Develop a Basic Intellectual Property Strategy for Your Business or Technology Idea) and here for the final post (What next? What to Do After You Have Applied the 6 Tests to Your 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?

“When a great team meets a lousy market, market wins.
When a lousy team meets a great market, market wins.
When a great team meets a great market, something special happens.” – Andy Rachleff

Passionate champion image

If product-market fit is the number one determinant of business or technology idea success, team is undoubtedly number two.

The key team question is: Is there a passionate champion?

I’ve seen many great ideas die in research institutions because of lack of a passionate champion. Ideas are plenty, implementers are few.

Why must the champion be passionate? As Mark Twain, Eddie Cantor and Steve Jobs observed, overnight success stories take a long time. If you are not FULLY committed, you will drop out before success.

What makes people passionate about something? It’s difficult to sustain passion if you are doing it just for money. As Dan Ariely noted in Predictably Irrational, causes are much stronger motivators than money.

“It’s hard to tell with these internet startups if they’re really interested in building companies or if they’re just interested in the money. I can tell you, though: If they don’t really want to build a company, they won’t luck into it. That’s because it’s so hard that if you don’t have a passion, you’ll give up.” — Steve Jobs

Of course, you might not be ready to take the plunge and start a new business based on your idea. This blog post series is precisely about helping you determine if your idea is promising or not, before you make big decisions. Also, not everyone is an entrepreneur and not everyone should be an entrepreneur.

But if you won’t be the champion, you need to find someone else just as passionate about your idea – and that is hard.

Another wrinkle: not every technology or idea is suitable for a start-up business. New paradigms, platform technologies, 10x improvements and new markets are some of the factors pointing to start-ups as the appropriate route. Incremental improvements or changes to existing products are more suited to being licensed.

But even if you are licensing your technology to an existing company, a champion within that company is critical for success.

Team image

Another key factor is team composition. One person almost never has all the required skills. This is why Y-Combinator and other leading accelerators and investors strongly prefer teams over single founders.

Yes, you won’t have a team when you start out, but what you should have is self-knowledge about your weaknesses, and what other skills will be required to take your idea forward.


How can I check team strength quickly at low cost?

Answer these 3 questions for your business or technology idea:

    1. Is there a passionate champion? If it won’t be you, do you have someone identified? Are they passionate about your idea?
    2. Is there a team in place with the required skills set for commercialising the idea? You are unlikely to have a team in place early on – in that case, you should at least have a list of what skills you think are required, which of those you (or the passionate champion) have, and which skills are missing.
    3. Are the team members able to commit? People might have other commitments that will divert their attention.

Real-world examples

“Not the right team” is the third-biggest reason for start-up failure according to CB Insights. Two examples from their study:

1. Standout Jobs

Standout Jobs image

Standout Jobs was a recruiting portal for mid-sized companies.They did not have a team in place with the required skills set. In their post-mortem, they wrote: “The founding team couldn’t build an MVP on its own. That was a mistake. If the founding team can’t put out product on its own (or with a small amount of external help from freelancers) they shouldn’t be founding a startup. We could have brought on additional co-founders, who would have been compensated primarily with equity versus cash, but we didn’t.”

2. Nouncer

Nouncer logo

Nouncer was an enterprise microblogging platform with a solo founder, Eran Hammer. Eran concluded that the core reason for failure was “…I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made.”

The lesson? A passionate champion is key, don’t go it alone, and be careful who you pick.

Moolman Institute logo


In the next and final post in the series I discuss What next? What to do after you have applied the 6 tests to your business or technology idea.

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 Intellectual Property 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.

Photo of pinata man by Ryan McGuire on Gratisography. Photo of night-time team by Jehyun Sung on Unsplash.

Posted by Sean Moolman in Opportunity Assessment, Technology Commercialization, 0 comments
Test 5: How to Develop a Basic Intellectual Property Strategy for Your Business or Technology Idea

Test 5: How to Develop a Basic Intellectual Property Strategy for Your Business or Technology Idea

Can I protect the idea? Should I? Do I have freedom to operate?

[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 5: Intellectual Property. 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 4: How to Quickly Check Financial Viability of Your Business or Technology Idea) and here for the next post (Test 6: Do You Have the Right Team to Commercialize Your Business Idea or Technology). 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?

Idea image

Can something be overrated by some and underrated by others at the same time?

That seems to be the case for intellectual property (IP). Over 95% of patents are never licensed or commercialized. But the few that do get commercialized in some cases create tremendous value.

And it is not only patents that have such divergent value. The value of all types of IP varies widely between industries, technologies, business models, territories and over time. For example, whilst patents are pivotal to the pharmaceutical industry, they have limited value for the military. Brands & trademarks are central to the fashion industry, but not to gold producers.

To navigate this tangle for your business or technology idea, you need to answer 3 basic questions:

  • Can I protect it?
  • Should I protect it?
  • Do I have freedom to operate*?

* Freedom to operate (FTO) refers to the ability to execute your idea without infringing on others’ intellectual property. You want to find out about potential infringements early to avoid a mortal blow later.


Intellectual property paranoia

Paranoid person imagePeople are usually too paranoid about secrecy. Test and evolve your idea with friends and colleagues.

Everyone is too busy with their own lives to drop everything and steal your idea! And you need a passionate champion to make anything succeed.

As Thomas Edison said, “The first requisite for success is the ability to apply your physical and mental energies to one problem incessantly without growing weary.”

Yes, there are limits to sharing – use your common sense. Don’t share your idea with someone well positioned to exploit it (such as a company with similar products or services) without protection. At least sign a non-disclosure agreement (NDA) or file a provisional patent application before talking to them.

Both protection options have factors that colour their value. NDAs have limited restricting power (you typically won’t have the money to enforce it) and patents have many considerations:

  • A patent is a business tool, nothing more;
  • It only gives protection if you have the money to enforce (“a patent is a sword, not a shield“);
  • It discloses details of your idea;
  • Patents only protect in the countries where you file;
  • They are expensive;
  • They can be circumvented;
  • Other IP protection methods might be more appropriate (such as trade secrets, copyright, registered designs);

Patents do have their place. Even though you might not be able to enforce, larger companies can – this creates potential for future licensing and ring-fences value for you.

You can file a provisional patent application at low cost (especially if you are a small business filing in the USA) and then have a year to figure out if the idea is worthwhile or if you want to protect it with a patent. (For South Africans, IdeaNav is a service with reasonable prices for filing provisional patent applications, trademarks and registered designs.)


How can I check this quickly at low cost?

Here are four steps for developing a basic IP strategy for your business or technology idea.

Step 1. Consider what type(s) of IP might be relevant for your idea

There are several types of IP protection, such as:

Old patent image

  • Trade secret – This is confidential information that is not in the public domain and that confers an advantage to the holder. Most countries have laws protecting trade secrets for as long as efforts are made to maintain secrecy.
  • Copyright – This is the automatic right that creators have over their literary and artistic works, such as books, advertisements, online articles, software programs and paintings. This typically persists for 50 to 75 years after the creator’s death.
  • Registered design – Aesthetic or functional design aspects of physical items can be protected. It provides weaker protection than patents but is granted more easily and is useful in industries where design is a prominent aspect. Designs can typically be registered for 10 to 15 years.
  • Patent – This provides protection for inventions that are (1) novel, (2) unobvious based on the current prior art, and (3) useful (have industrial applicability). Patents confer to the holder the right to exclude others from using or applying the invention in exchange for full disclosure. Patents are typically granted for a period of 20 years from date of filing of the initial patent application.
  • Registered trademark – This is a sign that distinguishes the products and services of an organization from those of others. It usually consists of either or both words and an image (logo), but shapes, sounds, fragrances and even distinctive colours can be trademarked. These last for as long as the trademark owner renews the registration (usually every 10 years).
  • Geographical indications – This signifies that a product originates from a specific geographical location and that it possesses specific properties characteristic of that location (for example Champagne, Port or Kobe beef).

The World Intellectual Property Organization (WIPO) provides a basic overview of the types of IP and their benefits and disadvantages.

Often you will use multiple types of IP to protect different aspects of your business or technology (for example copyright for software, a mix of trade secrets and patents for products and registered trademarks for your brands).

Patents, designs and trademarks are registered per territory (country or group of countries) and costs can balloon. Hence you also need to think about where you plan to operate.

There are additional barriers to entry (such as regulatory approvals or exclusive partnerships) that you can (and should!) leverage for your idea.

Step 2. Do a prior art search

“Prior art” is any information or evidence that (part of) your invention is already known somewhere in the world. It does not have to be in written format – it can be in the form of a video, physical product or any other medium.

Prior art searching is most relevant if you are planning to patent, but you should still do a search either way. You need to understand:

  1. If your idea is novel;
  2. Who the competition is;
  3. If you have freedom to operate.

I am planning a course on Intellectual Property for Entrepreneurs and Innovators that will cover aspects such as how to do a prior art search in detail. In the interim, here is a basic guide to get you started. You should also search existing trademarks and designs if you are planning to file such (see for example the WIPO Trademark & Brand databases).

Step 3. Think about encumbrance

Has anyone else contributed to the idea that could lay claim to an ownership share later? If there is any risk of this, make sure to handle it early onbefore there is money on the table. Come to an agreement with the other party on ownership and benefit sharing as soon as possible. Don’t make assumptions and reduce any agreement to writing.

Step 4. Decide on your basic IP protection approach

This will most likely change over time, but since early IP decisions can be irreversible (such as publishing software as open source or making an idea public before patenting), you need to have a basic strategy from the start.

Make initial decisions on your IP protection strategy based on the information and insights from Steps 1 to 3. Answer the questions: Can I protect it? (How) should I protect it? Do I have freedom to operate?


Real-world examples

Instead of a single real-world example, here are some serious successes and a few frivolous failures.

Serious successes

Polaroid image

  • Polaroid – Edwin Land invented a new material for polarizing light, patented it and built a successful business based on the patent. By his death in 1991, he had 535 patents in his name.
  • Google’s PageRank patent – for those of you who remember the days of Altavista (busy page alert) and Ask Jeeves, PageRank was a revolution. No more finding your search result on page 27 (or not at all). This is the patent that launched the mighty Google empire that touches all of us today.
  • Dropbox’s network folder synchronization patent showed everyone else how online file sharing should work.
  • The quad-rotor drone was invented by Edward Vanderlip in 1959 already. His employer at the time, Piasecki Aircraft Corp, obtained a US patent for this invention in 1962.

Frivolous failures

Patent troll image

  • A Non-Practicing Entity (also known as a patent troll) is a company that does not make anything itself but focuses solely on enforcing its patent portfolio – mainly through suing other companies. They are the bane of small companies, who often cannot afford litigation and are forced to settle out of court, even when the case has no merit. Eon-Net supposedly invented online form completion, but in fact filed some broad, vague patents about digitising documents. Eon-Net sued over 100 e-commerce companies for patent infringement over more than 15 years, making many millions of dollars in settlements, before being successfully countersued in 2009.
  • HP received a US patent grant in 2017 for “Reminder messages”. It describes calendar reminder messages sent from one computer to another. If that sounds like old news, you are right. (And while you’re there, check out some of the other “Stupid patent of the month” awards!)
  • Harley Davidson tried for more than 6 years to obtain a trademark on its motorcycles’ distinctive engine noise, but finally gave up due to strong opposition from other motorcycle manufacturers.
  • Walmart tried to trademark the yellow smiley face 😮 but lost 🙂.

The lesson? IP protection is important, but don’t lose focus on building your business.

Moolman Institute logo


In the next post in the series I discuss the 6th and final test: how to analyze your team strength (Is there a passionate champion? Do I understand what skills are missing?).

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 Intellectual Property 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.

Photo of disco globe by Vale Smeykov on Unsplash. Photo of paranoid man by Ryan McGuire on Gratisography. Photo of patent troll by maritravel on Pixabay.

Posted by Sean Moolman in Opportunity Assessment, Technology Commercialization, 3 comments
Test 4: How to Quickly Check Financial Viability of Your Business or Technology Idea

Test 4: How to Quickly Check Financial Viability of Your Business or Technology Idea

Can it become profitable?

[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 4: Financial Viability. 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 3: How to Check Technical Feasibility of Your Business or Technology Idea) and here for the next post (Test 5: How to Develop a Basic Intellectual Property Strategy for 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?

Cash bunny imageThe need for financial viability should be obvious, but many people are so taken in with their ideas that they do not check this until late in the process.

This is often the case for ‘inventor entrepreneurs’ – people with a technical background that start with a technology idea, then transition into product development and finally entrepreneurship.

Of course your idea will morph over time, and “no plan survives first contact with customers”, but you also don’t want to start down a road if your input costs will be more than the market price you can achieve.

Far from being a damper on innovation, financial insights and constraints can provide design targets and stimulate further innovation. Hence it is vital to check financial viability early and often.

As Steve Blank says, “Putting together the financial model forces you to think about how to build a profitable business”.


How can I check this quickly at low cost?

Magnifier imageThe first rough estimate (A) will look at per unit profitability only. Should this be positive, a second estimate (B) is done using the unit economics approach.

As you develop your idea, you should return to the financial viability estimates again and again and rebuild or update your model based on new information and insights. You should also check if your assumptions are still valid.

A. Rough profitability estimate

Start with a rough estimate of profitability per unit of your product or service. You need cost and revenue estimates. Here’s how to do this step-by-step:

    1. List all the direct cost items you can think of (where direct cost refers to the cost of manufacturing the product or delivering the service). Examples include raw materials, components, service providers (that contribute directly to delivering the service), cloud services cost, customer acquisition cost and direct labour.
    2. Estimate the cost of each of the direct cost items. You should be able to obtain actual costs for all the major items (for example via online search or by calling suppliers). It is fine to estimate costs for smaller items. If you have a cost range, you can use the high end of the range to get a conservative view of profitability.
    3. Estimate the indirect cost as 25 – 50% of direct cost.
    4. Estimate the selling price. For incremental innovation (improvements to existing products and services), you can look at the current price of competitive products or services as a benchmark. For disruptive innovation (completely new products or services), it is a bit tougher to estimate selling price. You can gauge what customers might be willing to pay by asking potential customers. (Just keep in mind that, as discussed in the post on testing the market, what people say they would be willing to pay could be far removed from what they are really willing to pay.) A second way to estimate selling price for disruptive innovation is to look at the price of current alternatives (the cost of what people are currently doing to meet the need). This can help anchor your estimate.
    5. Estimate profitability . Calculate profit (profit = selling price – direct cost – indirect cost) and margin (margin = profit / selling price). You want to see a high positive margin (20% or more), since you are likely to have underestimated costs. If you have a negative or small positive margin, you need to relook at your assumptions, redesign your business model or rethink your idea.

B. Unit economics analysis

Unit economics imageUnit economics is an alternative lens through which you can view your idea’s financial viability. It is based around two concepts:

  • Customer Acquisition Cost (CAC) – how much does it cost you to acquire a customer?
  • Lifetime Value (LTV) of a customer – how much money do you make per customer?

As a bare minimum, LTV should be bigger than CAC. Otherwise your idea can never be profitable in the long run. Most VCs (venture capital companies) look for a LTV/CAC ratio of at least 3.

Here are three guidelines for how to do a unit economics analysis:

The unit economics model has some limitations, but remains a valuable customer-focused method for understanding the financial fundamentals of your idea.

Y-combinator CEO Sam Altman believes unit economics is critical for startups: “I think the answer is unit economics. One of the jokes that came out of the 2000 bubble was ‘we lose a little money on every customer, but we make it up on volume.’”


Real-world example

Homejoy logo image

Homejoy was an online marketplace for connecting customers with home cleaning services. They raised over $38 million in investment. They used a lot of this money to fuel rapid growth by providing a steep discount to first-time customers (charging $19 whilst their cost was $35).

Their bet was that first-time customers would become return customers (the ‘buy-your-customer’ model that Uber and Paypal and some others have used more successfully), but this was not the case. They kept on losing money on each customer (basic unit economics!) as well as losing workers to direct employment with customers, leading to their shutdown in 2015.

Exec, a mobile app to hire personal assistants for errands, went the same way.

The lesson? Better understand your unit economics.

Moolman Institute logo


In the next post in the series I discuss how to analyze your idea’s Intellectual Property position (Can you protect the idea? Should you? Do you have freedom to operate?).

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 Financial Modeling, Opportunity Assessment, Technology Commercialization, 1 comment
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.

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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
Test 2: How to Check the Competition for Your Business or Technology Idea

Test 2: How to Check the Competition for Your Business or Technology Idea

Has it been done already? Can it be copied?

[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 2: Competition. 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, here for the previous post (Test 1: How to Check Market Potential for Your Business or Technology Idea) and here for the next post (Test 3: How to Check Technical Feasibility of Your Business or Technology Idea).]


Why is this important?

No competition image

“There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” – Peter F. Drucker

With the world’s population approaching 8 billion, odds are that someone else has had the same idea as you. And you can get so attached to your idea that you subconsciously avoid looking too hard for others doing the same thing. So you have to force yourself to dig.

Don’t fool yourself by saying that there is no competition. There is always an alternative. People are surviving and meeting their needs right now without your product or service.

You also need to think about barriers to entry – what will make it difficult for you to enter the market? What will make it difficult for others to copy you?

“In America, when you bring an idea to market, you usually have several months before competition pops up, allowing you to capture significant market share. In China, you can have hundreds of competitors within the first hours of going live. Ideas are not important in China – execution is.” – Ma Huateng

Competition can be a good thing – it confirms that there is a market. It does not mean you have to stop – you might target profitable niches, new marketing approaches, new branding, new territories, new business models. Or you might decide to tackle the competition head-on and do it better than them.

“I have been up against tough competition all my life. I wouldn’t know how to get along without it.” – Walt Disney

But you better be aware of what you are getting into. CB Insights lists getting outcompeted as one of the top 4 reasons startups fail.


How can I check this quickly at low cost?

There are 4 key questions you should answer:

Vertical line image

  1. Has it been done already?
  2. How easily will others be able to copy my idea?
  3. What are the barriers to entering the market (for example regulatory approvals, network effects, switching costs, cost advantages, access to distribution channels, patents, brands and economies of scale)?
  4. How are people getting the job done right now? How are they coping with the problem or addressing the need?

Tips for online research on the competition

Online search engines are the obvious starting point for answers. Some tips:

  • Get to know the syntax (things like wild cards and Boolean operators) of the search engines you are using (for example, here is a basic guide for Google);
  • Be systematic and thorough;
  • Make a list of keywords and generate synonyms;
  • Adapt the keywords as you notice what words people use to describe what you are looking for;
  • Make notes as you search;
  • Try different combinations of keywords;
  • Also search patent databases (such as Google Patents) and academic publication databases (such as Google Scholar or JSTOR).

Real-world post mortem – Vidme failed despite having a better product than Youtube

Vidme was a video hosting service that aimed to provide content creators with better monetization and viewers with a better experience than Youtube, using a crowd curation approach similar to Reddit.

Vidme quickly gained substantial traction (becoming one of the top 1000 destinations on the web), which validated the existence of a need and market niche.

However, both advertisers and audiences were reluctant to switch over from the huge platforms of the incumbents. This conspired with high video storage and delivery costs to keep Vidme unprofitable. Additionally, as Vidme founder Warren Shaeffer pointed out “…both Facebook and Youtube actively deprecate content shared from competing platforms…”

Vidme grave image

Ultimately, this forced Vidme to shut down on 15 December 2017. You can argue that this failure was due to network effects and switching costs (two of the entry barriers mentioned earlier), but both of these arose from incumbent competitors. It is concerning that the big tech incumbents are so embedded that it has become extremely hard for startups to compete, even with superior products or services.

This stifles innovation and means that the incumbents don’t have to work as hard to satisfy content creators. “YouTube’s monetization conditions will not get any better either because it has no reason to – it knows its creators aren’t going anywhere (hence the need for healthy competition!),” according to Uscreen, another start-up aiming to offer improved monetization to content creators.

People are left with few choices except for the mega-platforms, and when the big tech companies decide to offer a new product or service (such as Facebook, Instagram and LinkedIn adding video content), they have huge existing audiences and deep pockets to drive rapid adoption.

The lesson? Don’t ignore competitors.

You should have your own strategy & focus and not just watch and react to what the competition is doing, but don’t ignore the competitive landscape.

“The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors. Any big market is a bad choice, and a big market already served by competing companies is even worse. This is why it’s always a red flag when entrepreneurs talk about getting 1% of a $100 billion market.” – Peter Thiel, Zero to One.

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

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 Competition 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.

Photo of lion by 12019 on Pixabay. Photo of grave by Matt Botsford on Unsplash.

Posted by Sean Moolman in Opportunity Assessment, Technology Commercialization, 1 comment
Test 1: How to Check Market Potential for Your Business or Technology Idea

Test 1: How to Check Market Potential for Your Business or Technology Idea

Is there a real need? Is there a market?

[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 1: Market. 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. See also the main overview post and the next post – Test 2: Competition.]


Why is this important?

Dog and food image

“If you address a market that really wants your product — if the dogs are eating the dog food — then you can screw up almost everything in the company and you will succeed.” – Andy Rachleff, co-founder of Benchmark Capital

The number one determinant of success is whether there is a real need. Does the problem really exist? Does a meaningful number of people experience the problem? Is it important enough to them that they will be willing to pay for your solution?

The best ideas come from problems you have yourself. “Why is it so important to work on a problem you have? Among other things, it ensures the problem really exists,” says Paul Graham, founder of Y-Combinator.


How can I check this quickly at low cost?

1. Identify the ideal customer – someone that will love your solution to their problem. If you yourself have the problem, you already have an idea of who this is. If not, think about the most likely customer. Who will jump at the opportunity to use your solution? Write down who they are and what they look like.

2. TALK to some ideal customers. What do they think of your idea? Are they excited about it? How much would they be willing to pay for it? (Friends and family may lie to you out of kindness, so it is better to speak to strangers. But even they might be too kind. The ultimate test is whether strangers are willing to pay full price for your product or service. More about this in the last post in this series.)

Man with magnifier image

3. Get some market data. Do a rough estimate of market size. How many people have this problem? What are they currently doing to meet their need or solve their problem (called the current alternatives)? What do the current alternatives cost?

4. What does the industry look like? If you can find any information on the industry into which your product or service fits, it can help you to assess potential. You should be able to find some basic information on the Internet, including from market report summaries, industry association reports, press releases and company annual reports. There are helpful frameworks to interpret this information, such as Porter’s Five ForcesIndustry Value Chains and Wardley Maps.

5. Where is the market heading? Is it growing, shrinking, consolidating or shifting to a new technology or business model? A growing market provides more opportunity for small players.

A small market size does not mean your idea is doomed. A small customer base that loves your product or service can be a great launchpad for success. “You have to find a small market in which you can get a monopoly, and then quickly expand.” – Sam Altman

6. How difficult is it to reach the market? Are there barriers to entry? Are there companies, regulations, organisations or people that control access to the market? Do you have any obvious channels to market (where will you sell it, or who will sell it)?


Real-world post-mortem – No real need for Juicero

The razor-and-blade business model is a perennial favourite that keeps popping up in new guises. The reason is that it works! Think Nespresso, Sony Playstation, mobile phones. Thus it should come as no surprise that people try to emulate this success for other products.

Juicero was a company that sold a $400 wifi-connected juicer. You buy the machine, and then you buy packets of fruit & vegetable pulp (from Juicero, of course) to be squeezed out by the machine. Juicero raised over $100 million in funding. All good so far, except…. After this video appeared showing that you did not actually need the machine to squeeze the juice, things went downhill fast.

Juicero juice presser image

What was the main reason for its failure? Trying to invent a need that did not exist. Yes, people want fresh juice. Yes, it is inconvenient to press and juice fruit & vegetables yourself. But packaging juice or pulp that you can buy freshly prepared in the local store into a ‘special’ package and then adding on an expensive machine to press it does not solve a real problem.

This was a case of forcing a business model onto a product that did not need it.

Here’s how Jeff Dunn, last CEO of Juicero, tried to convince everyone of the existence of a real need:

“The value of Juicero is more than a glass of cold-pressed juice. Much more.

The value is in how easy it is for a frazzled dad to do something good for himself while getting the kids ready for school, without having to prep ingredients and clean a juicer.

It’s in how the busy professional who needs more greens in her life gets App reminders to press Produce Packs before they expire, so she doesn’t waste the hard-earned money she spent on them.”

And here’s one of the responses that sums it up:

“This is everything wrong about Silicon Valley in one note. A sort of unique sense of out of touch that makes people who ship chopped vegetables at 4000% markup think they are changing the world because of a nice looking app. And then they feel appalled that real people don’t see it that way.”

The lesson? Existence of a real need is critical.

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In the next post in the series I discuss how to test your idea against the Competition criterion.

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 Market 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.

Photo of pug by Charles PH on Unsplash. Photo of magnifying glass by Marten Newhall on Unsplash.

Posted by Sean Moolman in Opportunity Assessment, Technology Commercialization, 0 comments