Focus > Feasibility Study
Why
Once you have a clear understanding of the proposed solution, it’s time to do an assessment of your product’s feasibility of winning in the market. Don’t do this too early in the process, as it can limit your exploration and thinking. But you should not do this too late as well, to avoid wasting time and money in trying to build something that is not feasible.
How
As per lean startup principles, the critical questions to answer in evaluating product feasibility are:
- Should this product be built?
- Does the identified problem exist?
- Can the solution solve the problem effectively?
- Can we build a sustainable business around this?
- Will users pay ‘enough’ to solve this problem?
- Will they buy the product from us?
- Can this product be built?
- Technical feasibility
- Resource availability
Financial Feasibility
Create a budget for the next X years of operation. Start with expected income and the investments available. List your engineering and operational costs to derive an income statement and a cashflow analysis. Calculate if the project can give the expected ROI. Clearly outline the critical success factors such as sales targets, etc.
Operational Feasibility
Some business models may require substantial operations on the ground, for example, to onboard users, manage delivery, etc. You should validate the availability of knowledge, competency and resources to carry out the required ground operations.
Market Feasibility
Calculate the market size and potential share you may capture with your product. Filling an existing market gap through a unique offering is the key to success. Analyze the competitors in the market to evaluate if you have a clear edge and a plan to capitalize on the void in the market. Also consider the growth and stability of the market for a new business to get established.
Technical Feasibility
Finally, you should evaluate if the proposed solution is technically feasible. There are several aspects to consider:
- Are the selected technologies mature/stable to deliver the functionalies?
- Are your users capable and do they have the necessary resources to use the solution offering?
- Do you have access to required data and integrations?
- Are you able to acquire the necessary regulatory permissions?