3 Simple Questions to Ask Yourself About Any Opportunity

Jim Schibler
Jan 22, 2016
3 min read

Whenever you’re considering a new opportunity—whether you’re thinking of starting a business, launching a product, looking for a new job, or even just starting up a newsletter or blog—it’s important to qualify that opportunity before you pursue it. Many years ago, from an ad hoc mentor, I learned a simple, easy-to-remember way to qualify any opportunity.

Mr. Brooks managed customer service, and I’d often see him wandering the halls, stroking his chin and thinking through one issue or another. I once asked for his input on a marketing initiative I was proposing, and he told me, in his measured manner, with his thick Alabama accent, “Whenever you’re considering an opportunity, you have to ask yourself 3 questions: ‘Is it real?’, ‘Can we win?’, and ‘Is it worth it?’.” He went on to explain what he meant by each question:

Is It Real?

This question is all about the market. Opportunities can be very seductive, but they need to be qualified – reality-checked, in other words. Countless failures – Ford’s Edsel, Pets.com, New Coke, Apple’s Newton, Fresh ‘n Easy, and so many more – resulted from jumping in before assumptions about the market had been properly validated.

“Is it Real?” is shorthand for “Is there a sufficiently large number of people who have a problem or a strong desire, and are willing to pay my price for what I offer?” If not enough people care strongly enough to pay, you don’t have a real market, and you’re better off looking for other opportunities before you squander resources on a futile venture.

Can We Win?

This is about competition. It’s rare that an opportunity with a real market goes unnoticed by other people who are just as observant and inventive as you are. Even if you really are lucky enough to be the first one to spot a lucrative opportunity, you can still be put out of business by competitors who are more efficient, or market more effectively, or have better distribution mechanisms, or build a stronger team, or who find any of a dozen other ways to beat you.

You need to think long and hard about how you will erect barriers to competition or create such a unique offering that you can make the most of the opportunity. (To stimulate creative thinking about the competitive landscape, I highly recommend reading Blue Ocean Strategy by Renée Mauborgne and W. Chan Kim.)

Is It Worth It?

Here we’re considering return on investment. Even if you find a great market and devise a clever way to dominate it, your victory will be hollow if you don’t gain enough to justify your effort. You need healthy profits not only to make you feel justly compensated, but also to help you weather economic downturns and other challenges you can’t foresee or control.

Financial return is not the only form of return on investment that you should consider. If you’re going to spend a big chunk of your life pursuing an opportunity, shouldn’t you make sure it’s something you really want to do? Choosing an opportunity about which you’re passionate makes work more satisfying, and increases the likelihood that you’ll do it well, increasing your chances of success.

Other potential rewards you may want to consider in your assessment of total return on investment include fame or social status, contribution to betterment of the world or society, time flexibility, social interaction, travel opportunities, equity stake, and traditional perquisites like paid time off or a car allowance.

Qualify Every Opportunity – Or Suffer the Consequences

Pursuing an opportunity can involve a big commitment. If the opportunity isn’t viable, it’s much better to learn that before you make the commitment, rather than discovering that you’ve squandered precious time and other resources on a losing venture.

Qualifying every opportunity may seem like a daunting task, because there are so many questions to be asked and answered. However, the framework I learned from Mr. Brooks provides a simple, straightforward method for qualifying opportunities, and exposing problems and risks early enough to avoid being burned by them. You only need to remember and ask 3 simple questions: