Wondering about the viability of your new product idea? We got you covered.

Published in

Mindly

8 min readJun 16, 2020

A guide on how to use PESTLE framework to check your new product viability, risks, and opportunities.

Most of us already had at some moment a brilliant idea for a new product. Some of us put it in practice and, from these, the ones that are successful, a tiny fraction can change the world and build so famous companies like Google, Spotify, Netflix, and so on.

Listening to so many romantic stories about empires that started at garages and, then realizing the truth above can be sometimes frustrating before to start but even not becoming the next Google, good products can affect positively the lives of several people, including your life and of your team.

So, one practice that I like to suggest is to use a good framework like PESTLE to have a better and clear view of your idea of viability and challenges. By the end, as soon as you can have a clear picture, better you can convince your people and yourself to engage at making it happen, or not.

If you like the subject and also like to learn how people deal with risk, I recommend you reading “Understanding and Managing Risk Attitude — David Hillson (Gower Publishing)” that was the book where I, for the first time, learned about PESTLE.

Download a template for your PESTLE analysis here

With that said, I invite you now to learn in the next topics what is it and also how to use this now.

What PESTLE means, and how is this organized

The term stands for “Political”, “Economic”, “Social”, “Technological”, “Legal” and “Environmental”, which also means that for each one of these dimensions you and your team should assess risks/issues and opportunities.

Let’s look at each one and see some examples.

Political

This dimension focus on how the government may influence the economy or industry where you mainly plan to offer your product initially or, even, in case you have already a product and plan to start offering it at a new country/region.

An example?

Let’s say that you have a fintech which provides flexible loans through an online platform and, for entering a new country market the local government demands a lot of bureaucracy & paperwork for being accepted and get some benefits.

This can be an issue and, in the same way, an opportunity depending on offered benefits (fewer taxes, free land/building, so on).

Economic:

Here we place a spot on all the factors related to the local and international economy that can affect directly, and usually in the long-term, your product.

Check below a real-life current example.

Now with the economic crisis post-pandemics, many people are losing their jobs, so if you have a fintech/loan platform or any business that has a payment schedule agreed with customers, your risk of non-payment increases.

This can be treated as an issue/risk but, on the other hand, if you can manage your risks better and, use technology & data better than your competitors (several online scores, qualifying/filtering customers, tracking risk rate and using good analytics solutions, for instance), you can use it as an opportunity for gaining space, while your competitors are running scared.

Social:

These are factors about the social and cultural scenario where your product is planned to be inserted.

Let’s see a practical example.

So, to offer your product in a new country, you realize that you need to create a local team for online/phone support and hire some locals, send one of your most hardworking leaders as an opportunity to become a manager and provide the local team some and guidance training and voila! Right? Maybe not.

Your brand new manager, a bright, straight-forwarded and hardworking German guy, didn’t notice that in Dubai, where probably half of the manpower is from India/Pakistan, it’s almost religious to have Chai break in the morning and afternoon and, for the locals, he also didn’t notice that the company facilities need to offer very specific room for prayers that are expected to be conducted 5 times a day.

This can be an issue? If not considered or ignored, surely will be an issue, but, if mindfully considered, it can also be an opportunity for a success case of cultural/social awareness.

Technological:

Oh yes. Technology, baby!

If you want to create a positive impact and avoid a lot of headaches, think about this topic in a pragmatic way.

Why? Because with lots and tons of options and possible features it’s very easy to lose control and create a Frankenstein and, have pain for a long long time.

A list of very practical examples.

You want to build a product that makes it possible to apply for micro-loans online, quick, and with zero physical paperwork and so…

What software development stack to use? If you think properly and decide wisely it can be an opportunity to have easier qualified manpower, a better community, and faster development cycles and maintenance than competitors or, if you ignore, it can be a giant rock to sink your ship;
What architecture should I define? If well defined, it means easier and faster scalability and, almost no downtime but, if not, can mean to being stuck always that you need to add some new stuff (and losing customers/market);
How about credit risk? an online and fast approval process, a manual one, or both?

The examples here are almost endless and, most of then you can mitigate risks and explore opportunities at the same time and, that’s why here I invite you to know more about Mindly, by accessing the website or, even, directly scheduling a quick chat. Believe me, it can really save you a lot of time and money without not even signing a contract or paying for hours.

Click here for scheduling some time with us at no cost

Legal:

The focus of the legal dimension is on the laws that can affect in your product, positively or negatively.

An example of a risk/issue.

At some countries, the law demands that before opening a local branch office, and operation you need to have a local citizen (or sometimes the government) as a partner and owning 50%, which could delay your start since you need to find for a trusted partner and, even create roadblocks for changes later, in a way that it reduces your influence/power within your own company.

Environmental:

Here the factors include topics like climate, weather, geographical location, global changes in climate, environmental offsets (and so on…), or in other words, the environment that surrounds your product physically.

Finally, as an example of opportunity, Let’s imagine that you increased the portfolio of your fintech solution by offering online car loans.

Developed countries and cities which are in a very hot and desertic area and, with cheaper fuel, usually mean that a bigger part of the population is constantly buying new cars, which means a great market opportunity for your product that makes their life easier and the process faster.

How to use and conduct the analysis

The usually suggested process to conduct a PESTLE analysis is almost the same as what should be a qualitative risk analysis process and, if you’re not familiarized with that, let’s check each one of the steps below:

Step 01 — Brainstorm:

Here the idea is to run some meeting(s) / workshop(s) with your team to raise as much as possible factors (issues and opportunities) for each of the categories.

Some nice ways of doing that would use a whiteboard, post-its, and flip-chart in a closed room with some coffee and snacks but, however, if you need to keep it remote, a very nice tool that I recommend for that is Miro which allows you to create several boards, mindmaps and more in a collaborative online way.

Step 02 — Identify/Filter:

Since you have raised lots of factors, it’s time to filter/identify the ones that are relevant.

To do that, you could go through the following sub-steps:

Set 5 minutes in the clock (or how much time you think it’s necessary) and ask each one to write in a paper the ones that they want to keep;
Then give 5 minutes to each one to show and tell why;
After that, run a voting session to have the result.

For voting you can use, for instance, the mentimeter app that allows each one to vote from a mobile phone and shows the results in real-time (also a nice option for remote).

Step 03— Rate Importance/Impact:

Since you have filtered the factors to consider, it’s time to estimate/define the importance/impact of each one of these.

It’s usually done by defining value for each one on a scale from 1 to 5 where 1 is very low and 5 is very high and in case of a risk this means a negative impact and, in case of an opportunity, it means a positive impact.

Step 04 — Assess likelihood:

Using the same scale from 1 (very low) to 5 (very high), this is time to define the likelihood of each one of these becoming reality.

For both steps 3 and 4, I would recommend you first having some discussion with the team where they can give their opinion and provide data to reinforce that and, later use again an app like mentimter to get results.

Step 05 — Consider implications, viability, and actions:

Finally, it’s time with all this information to consider the implications and viability.

For that I’d recommend that, for each one, you multiply the likelihood by the impact, resulting in a final score that can be used to rank all the factors/points.

With that in hand, you finally can figure out together with your team what are the actions to deal with which one of these.

The idea is something like:

Do I have more opportunities top-ranked? That’s a good signal of viability especially if for the risks you have possible and effective actions;
Do I have more top-ranked risks than opportunities? If the actions are very expensive and/or complex, maybe this is a signal that it’s not that viable, especially if the opportunities are not so “wow”.