Business Opportunity Analysis Framework

Opportunity analysis helps us separate when to take action from when to keep looking. A methodical approach to opportunity analysis will help improve consistency and thoroughness across niche businesses. The aim of this is to be able to lay out ideas side by side in order to draw better correlations and insights from one business to another. Overall, a consistent approach to opportunity analysis will provide more meaningful takeaway lessons for future ventures, and ideally improve the overall thoroughness of analysis.

The product cycle of each niche will cover the following five phases:

 

1. Contextual Analysis

This is the environment that the idea occurs within. Specifically, what are the enabling factors of this niche business? For example, an app idea requires the context of smartphone penetration in your target demographic.

Context analysis can occur either before or after idea formation. The most important factor here is the trend of the context. Are smartphones with data plans on the rise or decline? How does that affect the business idea in 6 months? 6 years? Does the market still exist? Do you believe it will grow or shrink? Context lays the foundation for the business.

 

2. Product Ideation

This is the process of brainstorming product ideas. In three steps product ideation involves an idea generation phase, an elimination and refinement phase, and a declaration of vision. The most important factor here is to figure out what is being built. Is it an app, webapp, desktop software, or something else altogether? Have some basic idea of the development stack to get there and make sure that you have the skills for it or can hire them as needed.

 

3. Building the MVP

This is the process of building out the intial iteration of the product. It is a minimalistic approach which addresses the heart of the issue being tackled. What is the least path of resistance to getting a paying customer with this idea? The most important factor here is to build something that is worth paying for. Goal prioritization is key here in order to minimize the time to product validation.

 

4. Product Validation

This is the process of identifying if we have achieved product-market fit. Sometimes, Adwords is an appropriate method for quick validation. The most important factor here is to learn if there is market demand for the product. The most thorough method of product validation is selling it through normal sales channels.

 

5. Iteration

At this point, the idea has either shown it has a market fit or it does not. If there is market fit, iteration should be done by adding features, A/B testing, and in general adding features and improvements to the product. When a product does not have market fit, you have to decide whether to continue with the idea in a new fashion, or to move on and start looking for another idea to validate.