How great is your product idea?
Well, even if you have a great idea for a product, can it be monetized? If so, how much labor sits between your product and monetization?
If you have an awesome idea for the next great digital product, but are unsure if your vision can catalyze growth or monetization, you’ll want to read on.
4 Steps for How to Monetize Your Digital Product
Step #1: “Eureka!”
A “eureka” moment can be considered as a momentous epiphany, as well as the first step in determining whether or not a product can be monetized.
Perhaps you saw a new trend on Google Trends, or overheard a conversation about a new and exciting concept that is specific to the market you want to target. Or, your idea can even be cultural.
Regardless, it’s essential to determine whether or not there is demand for future users of your product concept.
That being said, I have two recommendations for idea thinking:
- Design Thinking is a method for problem solving, and divergence is one of its core tenants. It’s important to use divergent thinking, which consists of coming up with as many ideas as you want without digging deep into any of them quite yet. Implementing Design Thinking into your product development can have huge impacts on your product. Here’s a helpful PDF on how Design Thinking could change your product.
- It’s also imperative to consider user demand for your product ideas. If there is only a small demand, then you are out of luck. That idea won’t monetize.
Idea generation takes research, and enterprises have additional resources compared to small businesses that serve as an advantage.
Step #2: Form a Hypothesis
After generating a bunch of ideas, you need to pick just one.
How do you do that?
Use the Agile methodology to deliver ideas quickly and as often as you can. Once you have your list you can do some unofficial product testing. You can ask opinions from workers, survey your target market, and refine your idea.
Remember, use Agile to find out what works for you as early as possible.
I have two tips when developing your idea hypothesis. If you need more help on the Agile methodology then review its 10 key principles.
- Make a list of your competition. This will heavily influence your decision especially if someone is already building or selling your idea. What’s your sustainable comparative advantage?
- Don’t get too complex in idea features, it’s trouble. Keep it simple until you’ve developed your idea. Your future users might be too overwhelmed and detour fast.
After you do some refining and screening, you will have a great hypothesis of an idea from the initial larger pool selected.
Looking at your company as merely a vessel of an experiment forces you to be rigorous in defining the problem in the market, how you set out to solve it (your product idea), and the methods you will use along the way.
Step #3: Concept Development
After you have your idea hypothesis, you need to do some serious analytics with what your company can offer for your new product idea.
- Have the money?
- Have the resources?
To answer these questions you will need a small Marketing Plan.
In our last series, we mentioned you can take immediate actions on your marketing plan when you’re just starting out. You don’t really need to write a Marketing Plan, but at this stage of determining whether your initial product can monetize or not, you should have a small one.
Include the following components in your Marketing Plan:
- Determine the places where your product can be present with market segmentation. Choose three.
- Perform a SWOT analysis to identify strengths, weaknesses, opportunities, and threats that your product brings to the market.
- Determine the target group in your market segmentation.
Step #4: Product Development and Commercialization
Now you have generated, screened, and developed your product idea.
The next step is to actually develop and commercialize your product.
First, make a prototype — you will need web design and web developers. Here are 22 Prototype tools you can use for your web or mobile product, and here’s why building a prototype of any kind is so important.
Next, perform market testing. Based on your results, you can decide if you want to move forward into production and commercialization of your product. Here’s a good resource on why do market testing is important.
Repeat the above process until you achieve favorable results about your product.
Once you’re happy with the results, and have a product with a relatively good demand, then you can launch and promote it, which will essentially monetize your product.
Talk to us today about how we can help with your next development project!