Friday, December 30, 2005

Million Dollar Ideas - Structure Explained

This is going to be the structure of my posts in my Million Dollar Ideas series.

I'm going to be evaluating these ideas and structuring the posts as such:

Idea - brief synopsis of what the person has done.
Value of Idea - brief calculation of what the net increase in wealth of the idea was. Roughly speaking this is their profit = revenue - costs.
Time to Million - how long did it take this idea to make its first million. The faster the idea makes it to a million, the more effective it was.
Replicable - Can you take this idea and use it for your own? If so, in what instances? For example, a patented product can't be replicated. A service in a narrow geographic area can be replicated in another area.
Sustainable - Will this idea continue to produce money and value into the future? Or, is it a flash in the pan that is going to wither away? Put another way, this section answers two questions: Will the idea be able to be maintained? And, will the idea continue to throw off profit into the future?
Passive - Does this idea require a large amount of continued maintainance once it gets off the ground? Patenting and licensing something is passive. Creating a company you maintain is not. This section measures how much of your time, capital, and energy would be required to continue opperating this idea (if it is sustainable)
Extendible - Can you use this idea as a jumping off point to launch other ideas? Basically, once you create a brand around this idea can you extend that brand to other related products? Put another way, will implementing this idea make implementing other profitable ideas in the future easier?

Why it works - This is where I analyze the idea. The forces that lead to its profitability, the needs it fulfilles, who it creates value for, etc. This section will cover economics of the idea, strategic implementation, etc.

Furthermore, these ideas are measured in impact to the individual. If 2 guys make $2 million from an idea, that counts. If 20 people make $1,000,000 jointly, that doesn't. There will be a focus on ideas that one person can implement and less on ideas that require an extensive business to create (more books and patents. less google and ebay).

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