Considering a strategic bet? Use our tool to determine whether you’re holding a Pair or a Straight Flush.
How big is the pot that you stand to win? How many chips are on the table? With every bet, in poker or business, we should go in with a clear understanding of the potential upside. If you are successful in your initiative or venture, what are you likely to gain?
How big is the current market for the product or service?
Don't get too hung up on a specific definition of large or small market—just generally rate the opportunity relative to other opportunities you would normally look at.
What is the current growth rate for the market, or for highly-related market growth rates? For example, software depends on the underlying hardware growth rate.
Here again, don't worry about attaching specific growth rates—just rate the potential bet relative to the kinds of opportunities you typically see in your business.
How attractive is the opportunity in terms of key financial measures, i.e. margins, ROI, cash flow, etc.?
How much do you stand to benefit or suffer as a result of any external market disruptions or discontinuities (major force of change outside the control of the business) relating to this bet? These can be economic, governmental, environmental, etc.
How good are your cards? Do you have what is likely to be a winning hand? Every smart investment decision includes a cold, hard realistic assessment of what it will take to succeed, and how well those elements are in place.
How strong are any advantages your company brings to this initiative? These could be product, technology, people, location, channel, services replacement or business model advantages.
If you place this bet, what kind of competitive response is it likely to trigger? Consider current and potential competitors, the importance of your company or this market to them, and how aggressively and effectively they could respond.
How close is the bet to something you are currently doing or clearly understand how to do?
Be honest here. A high score suggests you have a proven ability to execute on the key variables relating to the bet because of specialized knowledge, skills, relationships, or capabilities.
It's great to bet from a big stack. In poker, it allows you to "bully" the other players. Same in business. If you've got a Microsoft-sized bankroll, you evaluate your bets differently than if you're barely breaking even.
How many of your available resources will you need to tie up with this bet? Keep in mind this might not just be money—include cost of distraction from existing core business, stretching of key people, facilities, infrastructure, etc.
How comfortable are you with your company's current performance trends if you don't place this bet?
What will be the financial impact on your company if you place this bet and miss the projections by a third or more?
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