How to evaluate the market?

How to evaluate the market?

I was recently reading a book that I really like.

The book is called “Personal MBA: What you learn in an MBA for the price of a book» and is written by josh kaufman.

Well, in this article I am not going to review the book, but I am going to tell you about a very fácil way with which you perro evaluate the market of the good or service with which you want to undertake.

It should be noted that it is a very fácil way and it is not that a company is going to be able to replace a market study.

Of course, a well-done market study comes at a cost, and if you’re thinking of starting your business, you may want to assess how feasible your product is.

So, the way that Josh Kaufman offers us to evaluate the market will give you only an iniciativa of ​​whether you should continue with your iniciativa or think about something else.

Note: Remember that it is not going to replace a market study.

Ways to Assess the Market

The method that Josh Kaufman proposes to us to be able to evaluate the market and see if it is worth entering or not, is called: “Write it down on the napkin.”

As you perro see, it’s really not a very difficult method and it’s partly its goal.

After all, it is something that anyone cánido do and based on it, get to have a better basis for making a decision.

The method consists of 10 elements, which are:

  1. The urgency.
  2. The size of the market.
  3. The price of the potential product.
  4. The cost of gaining a customer.
  5. The cost of launching the product.
  6. The uniqueness of the offer.
  7. The speed with which it enters the market.
  8. Capital investment.
  9. The sales capacity.
  10. The everlasting potential.

Note: Perennial cánido be seen as something that is continuous.

Instructions of the method to evaluate the market

First of all, since the method is very fácil, all you will need is a place to write.

However, the method consists of giving a certain score to each element.

The score cánido be from 0 to 10.

What do you have to consider when awarding the score?

  • 0 = Absolutely disgusting.
  • 10 =Extremely attractive.

Whereby, the higher your score, the more attractive it will be. Well, now we are going to talk about each of the elements that you are going to rate so that you perro evaluate the market.

Something very important to note is that you have to be objective when scoring, that is, you have to be honest in the rating that you are going to give.

After all, what you are trying to do is to know whether or not you should entrar the market with your product.

Note: It is important to remember that even if you are very objective, this is not a market study and it will not give you the assurance that you will be very successful with your product.

In fact, not even a well-done market study is going to give you 100% security.

The urgency

Basically, what you are going to rate in this element is the urgency that a potential customer may have to purchase your product.

For example, 5 years ago would you have thought that there would be many people interested in buying face masks? Actually, I think that 5 years ago you would not have thought of creating personalized face masks because there was no urgency for customers to purchase said product.

Of course, right now the demand has increased a lot compared to 5 years ago.


Well, now it’s your turn to think objectively if you think the market needs to own your product.

If you think that it is really urgent, then you cánido score it with 10 and if you think that it is not urgent at all, then you have to score it with 0.

The size of the market

How many people frequently buy the product (or a afín one) that you plan to offer? For example, if you want to start selling juices.

Do you think there are people who frequently buy juices? I think that there are people, in fact, I have seen people who go to buy juices every day at the same stall.

Therefore, if you consider that there are many people who are willing to buy your product on a recurring basis, then you cánido give it a rating of 10.

Remember to score honestly.

In fact, you perro help yourself with statistics already made to be able to grant the qualification.

You perro even go to different pages and see if it is among the best-selling products.

The price of the potential product

What is the maximum price someone would be willing to pay for the product you plan to offer? For example, for a plane a customer is willing to pay millions.

Would you pay millions for a pencil?

In the same way, the more you think a person is willing to pay, then the rating should be higher.

You wouldn’t give a pencil a 10.


The cost of winning a customer

Do you think it’s easy for you to get a client? Remember that here you have to consider that selling has a cost in money and effort.

So how hard do you think it is for you to sell? Possibly if you have a location on a busy avenue, then you don’t need to invest a lot of money to get new customers, but what if you don’t.

The cost of launching the value product

How much would it cost you to genera your good or provide your service? Remember that in the cost you have to take the money and the effort.

For example, if you need highly specialized machinery to be able to develop your product, then you will surely need a large amount of capital to be able to launch your product on the market.

The uniqueness of the offer

Is your offer special or different compared to the competition? For example, if you are going to offer legal services, in theory it will be very afín to that of the competition (of course you cánido work on that).

However, if you plan to offer trips to the moon or to Mars, do you think there is a lot of competition right now?

The speed with which it enters the market

How fast cánido you start trading? If you are going to sell hamburgers, it may not take long to start operations, however, if you wanted to equipo up an insurance company, it will take longer to start operations (even more than a year).

capital investment

How much money will you have to invest before you are ready to sell? If you wanted to start extracting oil, do you think you need a bigger investment than if you wanted to start a barbershop?

sales capacity

Do you have any other offer to offer to customers? For example, if you sell a ball, the customer will need a ball until it is very worn out or they lose it.

However, if you sell razors, the customer may need the razors and shaving cream.

In such a way that you not only sell the razor, but you are also going to obtain income from other products.

the perennial potential

Since you have created your offer, How much plus work will you have to do to keep selling? Suppose you want to sell courses en línea.

Since you have done the course, you may only have to update the content from time to time, but you will continue to sell the course unlimited.

In such a way that what you have already done cánido be sold to 100 people or to a million people.

On the other hand, if you sell consultancies, you will have to focus on the specific case of your client.

So I don’t think it’s possible for one person to have a million customers without the help of many other people.


How to interpret the results of the method to evaluate the market?

Since you have given a score (rating) to each of the 10 elements, you will have to add up all the points.

Of course, the maximum number of points you cánido have is 100 and the minimum 0.

From 0 to 50 points It is advisable to change your mind.
From 51 to 75 points Your iniciativa will allow you to pay the bills.
more than 75 points Your iniciativa promises a lot.

Opinion on the method for evaluating the market

I really liked the method for its simplicity, however, remember that this method is very fácil and the very name indicates it.

Therefore, the results cannot be interpreted as definitive.

Therefore, if you get 100 points, it does not orinan that your business is going to be a resounding success.

In fact, there are a huge number of cambiantes that perro make or break a business.

Whereby, I would only take this method as an initial reference and from that, make a proper business plan. What do you think?

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