I have a great idea that will require significant investment to prototype or create as a product. How do I learn whether the idea has value, without giving the idea away, and without having anything to demonstrate what the idea is?
Lots and lots of research. Start where you would expect: Google. Odds are the idea exists in some way, shape, or form. This can be an immediate sign that you shouldn't move forward, or confirmation that the idea is needed. If it's patentable you can do your own patent search. Again, start with google. Google has a very easy to use patent search. It's not as accurate as the USPTO but much easier.
Generally, I'd say that ideas are worthless without the ability to execute. In rare cases (technological breakthroughs) the idea has merit in and of itself. In the vast majority of cases, however, ideas are a dime a dozen. The real value comes in your ability to turn that idea into something real. Also, if the idea is so easily copied that you cannot tell anyone about it, that's a red flag. Odds are, if the idea is good, it's out there in some form. This is a big part of the reason that investors won't sign NDAs up front.
Hope this helps.
Every idea has an easy way to be demonstrated. A mockup, wireframe or even just a ppt which shows the problem you are solving and the solution/result your idea is producing, is always viable.
Personally I am not a fan of NDAs and, as previous answers pointed out, no one is waiting to steal your idea as long as you have a solid execution plan (once verified of course).
Hope this helps
The overwhelming majority of ideas have already been done, which is good for validation. If it's been done, learn all about your competitors. I did a 70 metric analysis of mine, but you don't have to be that overkill; a SWOT analysis is fine at this stage.
If it hasn't been done, or your analysis proved fruitful, W.E.M.:
The above will run you <$100 by yourself. Message me if you have questions. I'm happy to help they way I wished someone did for me.
A common concern that most of the entrepreneurs have is the notion that someone might execute on an idea if one were to discuss it with others. More often that not executing an idea from an inception stage to even an MVP takes significant amount of time, effort & resources. Unless the person/group you run an idea by has all those available, it is very unlikely that someone will build the product or service before you can.
If you are concerned about giving away your trade-secret unintentionally during any conversations, I would recommend creating a few scripts/talking points and practicing it with your trusted friends and family.
Depending on what your idea is, you might want to go where your potential customers are - coffee shops, malls etc. and try to pitch. That should give you good data points to capture and evaluate if people show any interest in your idea and are willing to pay for it.
I agree with Adam Hill's recommendation - use google to search if there are similar ideas out there, if someone has a patent of some sort and if the patent is still being enforced (or has expired!) and how successful the current idea is. That should also give you inputs on how you can differentiate your product/service from your competitors and make it more valuable to your customers!
Although a physical product may not be required, you will at least need drawings and an execution plan. Your drawings should highlight the benefits of your product (not features) where possible. And your complete execution plan, while you don't have to review it in a presentation in detail, will demonstrate that you have thought through, researched, and calculated all of the components, timing, equipment, and processes that will be needed to develop your prototype and product.
If you have to prototype, your plan should also include the things that you will measure, how measurement will potentially affect adjustments made to design, which areas you expect will be the most volatile or complicated, and what you will do if you hit a roadblock.
You can raise a million dollars, build a prototype, even start production, and still never deliver a viable product because 50% of the production run can't pass testing.
It's not always about the product itself when talking to investors, it's how you're going to manage the risks. The more detail you have figured out in advance, the more credible you're going to be with investors. Sure, everyone wants to have figured out that there's a market for what they're selling, but even that isn't a guarantee against all risks. The example I used above is one where they had over 7500 pre-orders, raised a million dollars, continued to develop the product for two and a half years, had continuous engineering updates, and when it came to production, they fell down because the waste of units that didn't pass inspection was greater than 50% and that's what eventually drove them out of business before they ever delivered any of those 7500 pre-orders. Everyone lost their money.
Don't worry about giving your idea away. Nobody really cares about your ideas (sorry to burst that bubble), they care about how you're going to execute them and eliminate risks. I have a guy I can buy ideas from for $10 each, endlessly. No joke. That's all they're worth until I or someone else turns them into a business. Actually he gives ideas away for free, but he wants $10 if I do anything with them.
Being able to turn an idea into a profitable business is what defines an entrepreneur. Ideas are just intellectual masturbation otherwise.
All great answers. The only way to really know is to have a buyer. So even a prototype in hand is just better then not. Still people without putting money down will generally give a more positive view. There are exceptions which have to do with comfort. If the product is outside the comfort box then you will generally get a more negative view. You will have to guess the adjustment needed.
Microwave cooking was outside comfort box. So what do you do if your idea or product can not be imagined by the people your asking? Then ask about the results they want and what drives this result. Microwave are fast and convenient. That was the value they added. Now you need to put a price on the gain in results that is a little harder than for a prototype in hand or a PPT presentation of a product.
Thanks everyone - great advice. As a follow up, does anyone have any suggestions for calling together a focus group? Do you suggest just posting on LinkedIn looking for volunteers? Or in here? Or just cold calling my target customers?
If your project has no alternative than having a prototype then there is no other solution than getting the funding to realise it or making an agreement with people able to do it. It is axectly what we do ! However, making a prototype is only the first step of a complex process and investmetn to bring a product to the market and a comlete vsion of this process must be got in order not ot go in the dead end.
If you want to speak about this you can contact me at firstname.lastname@example.org
All the best