Market gap analysis - Setting the reference point

The beginning is the most important part. It is here that you set your goals and constraints about an opportunity that has not yet been discovered. It is important because it is so much easier to be hard-headed about the business practicalities before you fall in love with an idea and get carried away with wishful thinking. When I say "business practicalities" I do not necessarily imply a project optimized for monetary profit. Non-profit organizations labor under the same "business practicalities" as everyone else. They just don't have to pay income taxes.

Goals and constraints relate to what you want to get out of a project and what you are willing to put into it. Just for the sake of simplicity, the discussion will focus on business-for-profit. Monetary profits are so much easier to measure, but the same considerations apply to a not-for-profit opportunity search.

Instead of "business practicalities," you can also read it as "sustainable."

A comprehensive set of goals and constraints, established in writing at the very beginning, is important because of the powerful distortions inevitably introduced by the emotional attachments that arise once imagination is engaged. You fall in love with your own ideas and wishful thinking swamps rationality and prudence. But, with a written set of goals and constraints, it is sometimes possible to pull yourself out of your own business fantasies.

One common tendency is to understate both goals and constraints. You think you can succeed with a smaller profit margin than what you actually need, it will take less time than is realistic, and it costs more in money and effort than what you imagined. Overstate goals and constraints in your written reference point, and understate the expectations for any particular opportunity.

As the maxim goes, "Aim High. That way you will at least avoid shooting off your own foot."