On the horizontal axis, you list the characteristics or capabilities that your proposed product would provide.It consists of a two-dimensional line graph: One tool that helps you see at a glance just how unique your proposed product would be is their strategy chart. In Blue Ocean Strategy, Kim and Mauborgne make a similar assertion and go on to describe analytical tools for assessing just how unique your idea is. Thiel says you need an idea for technology that can provide unique, revolutionary capabilities. Shortform Commentary: Identifying Revolutionary Technology Second, are you the only one to identify this opportunity? If other people have already identified the same opportunity, then it’s probably not worth pursuing, because competition will consume your profits. Instead, you need a breakthrough that provides fundamentally new capabilities, or, at the very least, increases existing capabilities by a factor of 10. In other words, what great opportunity have you identified that everyone else has overlooked? As Thiel explains, there are two elements to answering this question:įirst, have you really identified a great opportunity? Thiel cautions that making an incremental improvement to an existing technology is generally not a great opportunity. Revolutionary Technologyįirst and foremost, Thiel asks whether you have an idea for a revolutionary technology to build your startup around.
So this estimate would be realistic for a product like a simple phone app that a software engineer can create in a few hours and costs nothing to manufacture, but physical products and more advanced software products would cost considerably more, putting them out of reach for most individual innovators. And it does not include any cost for setting up production.
This estimate includes only $2,000 for engineering, implying that your invention only requires about half a week of engineering labor. Meanwhile, to elaborate on Thiel’s point that individuals don’t usually have the resources to develop revolutionary inventions, financial consultants estimate that it takes a minimum of about $25,000 to develop a new invention. According to Christensen, revolutionary innovations typically start out in markets that are too small to interest established companies, though they can grow exponentially from there. In The Innovator’s Dilemma, Clayton Christensen elaborates on Thiel’s observation that established companies seldom create revolutionary technologies.
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