Wednesday, October 13, 2010

Your idea sucks... analytically speaking.

Does your idea suck or rock?  If you want to try something more than "my friends like my idea", "my teacher likes my idea", or "I know I would buy it"... consider an analytical approach to opportunity analysis.  Why not say, this idea is a 25.  Then you can compare that to what you are doing now (probably a 12).   Or compare it to another idea (wow, a 38!)...  If you ever wanted to know if your idea is good, from an analytical perspective... read on.

There are 2 Acronyms that Harvard MBAs (and UT MBAs) learn: POCD and SWAT.  They both boil down to "Pro and Con" type thinking... but they both also add something useful.

POCD = People, Opportunity, Context, and Deal.  
P - Are the people likely to be able to succeed (the right people)
O - Is the opportunity big... (how big is it)... (how much money might be made?)
C - What is happening in context of the world at large that is or MIGHT effect this opportunity?
D - How much money will it take to get to success, and what are the terms and risks?

I often use POCD to look at 2 different opportunities, I use a 1-10 scale to compare them... here is an example:
P - 9 (my team rocks)
O - 7 (its tough to make money in social right now)
C - 10 (Social is heating up and people are looking for our solution: how to make money with Social Marketing)
D - 8 (not a lot of funds needed)

--- vs. ---
Making my own social game (something I'd like to do someday)
P - 5 (I have no artistic talents)
O - 4 (hard to make money with just 1 game)
C - 7 (social games are hot)
D - 7 (not a lot of money needed to make a social game)
SCORE: 23 (better than I thought it would be)

SWOT is very similar, and does add a valuable concept (that POCD doesn't directly address)
SWOT = Strengths, Weaknesses, Opportunities, Threats

I don't directly use SWOT, but I do like the thought of "threats" as part of the "Context" in the POCD framework.

So, the next time you are asked, is this a good idea?

Give them a POCD score.  It's fun.

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