The document discusses how to evaluate business ideas effectively, presenting a five-step decision-making process that includes defining criteria, weighing them, identifying options, scoring, and selecting the best option. It outlines the key criteria organizations use to assess business ideas, emphasizing mission alignment, financial appeal, market quality, and the feasibility of the business model. Ultimately, it concludes that ideas with strong alignment to an organization's goals, financial viability, market potential, and a robust model have greater chances of gaining support.

1. Innovation made easy.1
What Makes a Good
Business Idea Good?
How to find ideas
your organization
will support

2. Innovation made easy.2
Introduction
 What makes a good business idea good?
 Why do some ideas immediately attract investors, talent, and
customers, while others fall flat?
 Is it possible to direct our search for business ideas in a manner that
will increase the odds of finding a good idea?

3. Innovation made easy.3
Training Objectives
By the end of this article, you will be able to answer these questions and
more as you learn:
1. How people make decisions
2. How your organization makes decisions about business ideas

4. Innovation made easy.4
Objective 1
The Decision-Making Process

5. Innovation made easy.5
How Do People Make Decisions?
Where will
I have
lunch
today?
Who
should I
hire?
Should I
invest in
this
business
idea?

6. Innovation made easy.6
The Decision-Making Process
On a daily basis, we all make countless
decisions—some significant, and some
unimportant. For decisions that matter, this is a
simple five step process:
1. Define evaluation criteria
2. Weight the criteria
3. Identify options
4. Score options against criteria
5. Select the highest scoring option

7. Innovation made easy.7
The Decision-Making Process
Near the
office
Affordable Healthy
1 Define evaluation criteria:
It must be:
1. Near the office
2. Affordable
3. Healthy
Ex: Where will I have lunch today?

8. Innovation made easy.8
The Decision-Making Process
Near the
office
Affordable Healthy
Required 60% 40%
2 Weight the criteria
Required—it must be near the
office.
Desired—being affordable is
more important than being
healthy.
Ex: Where will I have lunch today?

9. Innovation made easy.9
The Decision-Making Process
Hot Dog Stand
Fancy Hotel
Restaurant
Near the
office
Affordable Healthy
Required 60% 40%
Whole Foods
3 Identify options:
1. Hot Dog Stand across the street
2. Fancy Hotel Restaurant next
door
3. Whole Foods across town
Ex: Where will I have lunch today?

10. Innovation made easy.10
The Decision-Making Process
Hot Dog Stand
Fancy Hotel
Restaurant
Near the
office
Affordable Healthy
Required 60% 40%
Yes 5 1
Yes 1 5
3.4
2.6
Whole Foods No N/A N/A N/A
4 Score options against criteria:
On a scale of 1-5, 5 being high.
Note—Whole Foods is eliminated from the
evaluation process because it does not
meet the required criteria.
Ex: Where will I have lunch today?

11. Innovation made easy.11
How to Calculate the Score
Hot Dog Stand
Near the
office
Affordable Healthy
Required 60% 40%
Yes 5 1 3.4
Ex: Where will I have lunch today?
(5 X .6) + (1 X .4)
3 + .4 3.4=

12. Innovation made easy.12
The Decision-Making Process
Hot Dog Stand
Fancy Hotel
Restaurant
Near the
office
Affordable Healthy
Required 60% 40%
Yes 5 1
Yes 1 5
3.4
2.6
Whole Foods No N/A N/A N/A
5 Select the highest scoring option
Ex: Where will I have lunch today?

13. Innovation made easy.13
The Decision-Making Process
Hot Dog Stand
Fancy Hotel
Restaurant
Near the
office
Affordable Healthy
Required 60% 40%
Yes 5 1
Yes 1 5
3.4
2.6
Whole Foods No N/A N/A N/A
1 Define evaluation criteria
2 Weight the criteria
3 Identify options
4 Score options against criteria
5 Select the highest scoring optio
Ex: Where will I have lunch today?

14. Innovation made easy.14
Objective 2
How Organizations Evaluate Business Ideas

15. Innovation made easy.15
Your Organization’s Criteria
Following are the five categories of criteria that
organization’s typically use to assess a business
idea:
1. Mission Alignment
Does this project feel like a fit with who we are and what
we do?
2. Financial Appeal
Does this project present an attractive financial
opportunity?
3. Mojo Alignment
Does this project align with our core competencies &
resources?
4. Quality of the Market
Is this a big, growing, exciting market opportunity?
5. Quality of the Model

16. Innovation made easy.16
Your Organization’s Criteria
Note that this is not only what your organization
values, but the order of priority they place upon
each.
1. Mission Alignment
2. Financial Appeal
3. Mojo Alignment
4. Quality of the Market
5. Quality of the Model
OrderofPriority
Therefore, if an idea fails at one level of the
evaluation, it doesn’t proceed to the next since
there’s no point in continuing to consider the idea.

17. Innovation made easy.17
Digging Deeper
Let’s dig deeper into each of these
categories by considering a
hypothetical scenario and exploring . . .
1. The specific criteria within each
category
2. Why these criteria matter

18. Innovation made easy.18
What Would Steve Say?
Imagine that you worked at Apple during
the Steve Jobs era and the following four
business ideas were pitched.
How would Steve evaluate each on the five
evaluation dimensions we have identified?
Mission
Alignment
Financial
Appeal
Mojo
Alignment
Market
Quality
Model
Quality

19. Innovation made easy.19
Mission Alignment
Criteria Why It Matters
This idea is a fit with
who we are and what
we do.
Focus. Maintaining focus is key to any
organization’s success, and effective leaders
constantly battle the temptation of distraction.
This is why Steve Jobs said, “I’m as proud of the
things we haven’t done as the things I have
done. Innovation is about saying no to 1,000
things.”

20. Innovation made easy.20
What Would Steve Say?
Mission
Alignment
Financial
Appeal
Mojo
Alignment
Market
Quality
Model
Quality

21. Innovation made easy.21
Financial Appeal
Criteria Why It Matters
This opportunity is
financially attractive.
Viability. If the opportunity doesn’t meet or
exceed the minimum financial requirements of
the organization, it will not get support. Note
that the minimum requirements typically vary
depending on the nature of the project. E.g. the
revenue requirements for a product line
extension will be much lower than the revenue
requirements for an entirely new product line.

22. Innovation made easy.22
What Would Steve Say?
Mission
Alignment
Financial
Appeal
Mojo
Alignment
Market
Quality
Model
Quality

23. Innovation made easy.23
Mojo Alignment
Criteria Why It Matters
The target customer of
this idea will regard us
as a credible provider of
the solution.
Credibility. If you’re not credible with the
customer, nothing else matters – you won’t
even get through the door to make your
pitch.
We have a committed,
capable intrapreneur
available to lead this
initiative.
Leadership. Every innovation project is a
journey into the unknown and requires a
committed, capable intrapreneur to lead the
way.
We have or can
reasonably acquire the
competencies &
resources required to
execute on this idea.
Feasibility. Can we afford to engage this
opportunity? Do we have a realistic shot at
competing?
This idea leverages our
unique strengths.
Barriers to Entry. Business ideas that
leverage highly differentiated, hard-to-
replicate expertise and resources are easier
to defend from competitive threats.

24. Innovation made easy.24
What Would Steve Say?
Mission
Alignment
Financial
Appeal
Mojo
Alignment
Market
Quality
Model
Quality

25. Innovation made easy.25
Market Quality
Criteria Why It Matters
This idea
identifies a large
market.
Security & Growth Potential. It’s easier to succeed in
a $10B market than it is in a $10M market.
This idea
identifies a fast
growing market.
Market Window. Fast-growing markets tend to
naturally shake up the competitive landscape,
creating a window of opportunity for new market
entrants.
This idea
identifies a
customer
segment that isn't
too concentrated
Profit & Stability. Highly concentrated markets (i.e. a
few customers = most of the sales) tend to be less
profitable because the customers have much more
power in the relationship and can negotiate better
deals. Also, customer concentration creates
instability since the loss of a major customer can
cripple the business.This idea
identifies an
urgent customer
problem/opportu
nity.
Market Window. It’s easier to sell to a desperate
customer than a complacent one. Also, urgent
demand suggests that something has changed in
the market, creating a rare window of opportunity.

26. Innovation made easy.26
Market Quality (Cont’d)
Criteria Why It Matters
This idea identifies a
market that is easy to
reach and influence via
sales & marketing efforts.
Market Addressability. Some customers are
hard to reach, slow to adopt anything new, and
insulated from the word-of-mouth testimonials of
their peers (think aging small farm owners without
internet). Others are easy to reach, trendy, and
highly networked (think young, middle-class, first-
time moms).
There are few substitute
solutions to the customer
problem identified by this
idea.
Profit Potential. Profit margins are generally
lower in markets that have strong substitute
product options. E.g. hotels have had to lower
their rates once Airbnb became available.
This idea identifies a
market with high barriers to
entry for our competitors
and low barriers to exit for
all
Profit & Stability. Markets that combine both
high barriers to entry and low barriers to exit tend
to be both profitable and stable.

27. Innovation made easy.27
What Would Steve Say?
Mission
Alignment
Financial
Appeal
Mojo
Alignment
Market
Quality
Model
Quality

28. Innovation made easy.28
Model Quality
Criteria Why It Matters
The idea is both legal
and technically feasible.
Feasibility. Your idea will never fly if you
can’t build it and legally deliver it. Make
sure you have checked out both before you
proceed.Customers will regard
our value proposition as
superior to competing
options.
Differentiation. To get the customer’s
attention, you not only need to solve their
problem, but do it in a unique way that
gives them a reason to switch to your brand.
Competition within this
product category is
relatively weak.
Viability & Profit Potential. The milder the
competition, the better your chances of
successfully entering the market and
making a profit. Vigilant, powerful,
aggressive, and/or irrational competitors
may block your market entrance or make
you wish they had.

29. Innovation made easy.29
Model Quality (Cont’d)
Criteria Why It Matters
This idea opens the
door to lots of other
business opportunities.
Growth Potential. Some business ideas merely fill
in the gaps of existing product lines, and therefore
have limited growth potential. Others open the door
to whole new worlds of possibility.
This idea is highly
scalable.
Growth. Scalability is a function of a) the total
number of products that can be sold, b) the fidelity
with which you can reproduce the product, and c)
the speed at which you can reproduce the product.
Scalable businesses grow much faster.
This idea could be
implemented quickly.
Speed to Market. Can your organization seize the
opportunity before the market window closes?
This idea wouldn't
require much up-front
investment.
Reduced Risk. Less up-front capital investment
means lower risk if the idea doesn’t work.
This idea wouldn't make
us overly dependent on
key
suppliers/employees.
Profit & Stability. An imbalance of power in your
relationship with suppliers and employees leads to
inflated costs and increased risks.

30. Innovation made easy.30
What Would Steve Say?
Mission
Alignment
Financial
Appeal
Mojo
Alignment
Market
Quality
Model
Quality

31. Innovation made easy.31
Evaluation Criteria Summary
Mission Money Mojo Market Model
1.Fit with
who we
are and
what we
2.Attractiv
financial
oppor-
3.Customer
regards us as
a credible
provider
4.Strong
intrapreneur to
lead the
project
5.We have or
can reasonably
acquire the
competencies
& resources
required
6.Leverages our
unique
strengths
7. Large market
8. Fast-growing market
9. The customer
segment isn't too
concentrated
10.The customer
problem is urgent
11.The market is easy
to reach and
influence via sales &
marketing efforts
12.There are few
substitute products
13.The barriers to entry
are high for
competitors; barriers
to exit are low for all.
14. It’s legal and
technically feasible
15.Customers will regard
our value proposition
as superior to
competitors’
16.Scalable
17.Competition within this
product category is
weak
18.Opens the door to lots
of other business
opportunities
19.Speedy
implementation
20.Small up-front
investment
21.Limited supplier power

32. Innovation made easy.32
Summary
Your odds of gaining support for your idea
are greater when it:
1) aligns with your organization’s mission
and mojo,
2) meets financial expectations,
3) addresses a market of sufficient quality,
and
4) does so with a model of sufficient quality.

33. Innovation made easy.33
Leverage These Insights
In our next article, we’ll talk
about how to leverage these
insights and strategically
focus your search for good
business ideas.