Is My Product or Service Good?

When you’re starting a business, launching a product, or offering a service, it’s only natural to ask yourself, "Is what I’m offering actually good?" Whether you’re driven by ambition, creativity, or a simple need for financial freedom, you’ll inevitably hit that moment of reflection. This question goes beyond your personal passion for your product or service. It's about value, feasibility, and sustainability in the real world.

It might sound daunting, but breaking it down into core elements helps ease the pressure. Let’s explore three key dimensions to measure whether your product or service has legs to stand on: Value, Cost to Supply vs. Demand, and Recession-Proofing.

1. Value: It Solves a Problem Worth Solving

One of the first things to ask yourself is whether your product or service actually solves a problem that matters. Sure, you might have a great idea, but is it something that’s going to save time, effort, or turmoil for others?

Time, Effort, or Turmoil?

Good products or services address real pain points. People gravitate toward solutions that either save them time, reduce effort, or remove frustration. This might sound simple, but it’s essential. Let’s take an example from the fitness industry. Imagine you’ve created a workout app. Now, what’s the real value? Are you helping someone get fitter faster? Are you offering them a way to streamline their workout routine, so they don’t have to think about what to do each day? Or, are you solving a bigger frustration, like the complexity of staying fit without a personal trainer? The stronger and more tangible your product’s benefit is, the better. The value doesn’t need to be something earth-shattering. Often, the best solutions solve small but significant problems, and that’s where the magic lies. A famous case study is Dropbox. At its inception, it wasn’t about revolutionizing how people stored data—it was about making it easier to access files from anywhere without needing to carry around a USB. It was a simple but compelling value proposition: save time, reduce effort, and avoid the turmoil of forgetting important files.

The "Willingness to Pay" Indicator

The real test of value comes down to this: Are people willing to part with their hard-earned money for your product or service? That’s the ultimate validation. If they’re not willing to pay for it, then the value isn’t strong enough, or the problem isn’t pressing enough for them to care. So, how do you know if people will pay? One way is to test. Launch a minimum viable product (MVP) and see if there’s a market that bites. Ask potential customers for feedback early on, and see if their responses align with what you believe your product offers. Sometimes, even the best of us get caught up in our own vision, and we need a reality check.

2. Cost to Supply vs. Demand: Will It Make Money?

This brings us to one of the harshest truths in business: the relationship between cost and demand. It’s one thing to create something of value, but another to make it profitable. This is the nitty-gritty where the dreamers meet the doers. You’ve got a great product or service, but now comes the math: Can you supply it at a cost lower than people are willing to pay?

The Supply-Demand Equation

In simple terms, if your product costs you $10 to make, but customers are only willing to pay $8, you’re in trouble. On the flip side, if you can produce that same product for $5, but customers will still pay $10, you’re in a sweet spot. But it’s not enough to look at individual sales. You also have to factor in the volume. If you only make 3 cents per dollar, you’ll need a massive volume to make meaningful profits. The key to a thriving business lies in balancing the cost to supply against what customers are willing to pay—and this is where innovation can set you apart.

The Uber Factor: Innovating Costs While Boosting Value

Take Uber as a classic example. Before Uber, taxi services were expensive, inconvenient, and inconsistent. Uber found a way to reduce operational costs by leveraging technology and bypassing the traditional taxi infrastructure. It redefined the market by not just lowering the cost but also increasing value through convenience, ease of use, and real-time tracking. In essence, Uber slashed the supply cost while increasing value for the customer. This is the Holy Grail for businesses. If you can reduce costs on your end while making the experience or product more valuable for your customers, you’re onto something big.

The Million-Dollar Question: Will Enough People Pay?

Even if you’ve found a way to make your product for less than people are willing to pay, you still need to ask: Will enough people buy it? Sometimes, businesses get stuck because their margins are fine, but their market is too small to generate the revenue needed to scale. If you’re making pennies on the dollar, you’ll need a large customer base or high-volume sales to reach significant profits.

The strategy here is twofold:

• Lower production costs where possible. Lean on technology, efficient systems, and economies of scale.

• Make sure there’s a sufficient demand—not just locally, but globally if necessary. There’s nothing worse than an amazing product that doesn’t sell because the customer pool is too small.

3. Recession-Proofing: Will It Survive Economic Downturns?

Even if your product or service is valuable and can be supplied profitably, there’s another layer to consider: Will it survive in a tough economy?

Seasonal vs. Recession-Proof Products

Some products have strong seasonal demand and can generate enough revenue during peak times to weather economic storms. Think of snow shovels or Christmas decorations. They might have a short sales window, but when that window opens, sales soar. The key is to ensure that you can generate enough in the good times to survive the bad. Then, there are products or services that are inherently recession-proof. These are the things that people need no matter what the economy is doing. Electricity, water, toilet paper—basic necessities that people can’t live without, regardless of financial strain.

Finding Resilience in Your Offering

The real challenge is figuring out where your product or service falls on this spectrum. Are you offering something that people will still need in a recession? Or will demand dry up when wallets get tight? If your product isn’t recession-proof, you might need to rethink how you position or diversify it. For instance, if your business relies heavily on luxury or discretionary spending, consider adding more budget-friendly options or services that appeal to customers even in leaner times. Diversification is also key. Look at airlines for instance. While heavily impacted during recessions, some airlines have found ways to tap into cargo transport or offer stripped-down, no-frills travel options that keep them afloat during difficult times.

Seasonal Business Case Study: Ski Resorts

A good example of seasonal success is the ski resort industry. They know their business thrives in winter, but the smartest ones diversify by offering summer activities like hiking, mountain biking, or festivals to create year-round revenue streams. These businesses plan ahead for the off-season and have financial models in place to cover the quieter months, ensuring they stay afloat even during downturns.

Final Thoughts: Is Your Product or Service Good?

Ultimately, the success of your product or service hinges on three critical factors: value, cost versus demand, and resilience. If you’re solving a problem that saves time, effort, or turmoil for people, and if enough people are willing to pay for it, you’re off to a great start. But make sure your cost to supply doesn’t outstrip what customers are willing to pay, and that the potential market is large enough for sustainable profits. Finally, consider whether your product or service can stand the test of economic adversity. Is it something people will continue to need, or do you need to plan for seasonal peaks and troughs?

Take these insights as a litmus test for your business. And remember, the most successful entrepreneurs are the ones who innovate at every stage—from adding value to cutting costs to planning for the unexpected. Whether you're launching a new app, selling physical products, or offering services, these fundamentals will keep you grounded and help you build something that’s not just good—but great.

So, is your product or service good? Only time, effort, and a little bit of calculated risk will tell.