Evaluate whether a product idea is technically feasible, financially viable, and desirable using TAM/SAM/SOM, Business Model Canvas, and risk frameworks.
The Desirability-Feasibility-Viability (DFV) Framework
Before committing resources to building a product, PMs must validate three intersecting dimensions:
Desirability: Does the user actually want or need this? Will customers pay the proposed price? This is about demand — validated through user research, interviews, surveys, and smoke tests.
Feasibility: Can we actually build it? Is the technology mature enough? Does the organisation have the required skills, infrastructure, and capacity? This is about capability — validated through technical prototyping, TRL assessment, and resource analysis.
Before committing resources to building a product, PMs must validate three intersecting dimensions:
Desirability: Does the user actually want or need this? Will customers pay the proposed price? This is about demand — validated through user research, interviews, surveys, and smoke tests.
Feasibility: Can we actually build it? Is the technology mature enough? Does the organisation have the required skills, infrastructure, and capacity? This is about capability — validated through technical prototyping, TRL assessment, and resource analysis.
Viability: Does the business model make financial sense? Can the company sustain this product profitably over time? This is about sustainability — validated through unit economics, revenue projections, and competitive analysis.
DFV Intersections
A product that scores high on all three dimensions is ready to build. But partial scores reveal specific strategic responses:
Combination
Meaning
PM Response
High D + High V + Low F
Customers want it, business model works, but technology can't deliver
Find a technically feasible subset (MVP), validate demand with it, build toward full vision iteratively
High D + High F + Low V
Customers want it, you can build it, but it's not profitable
Rethink pricing, cost structure, or monetisation model
High F + High V + Low D
You can build it profitably, but nobody wants it
Pivot the value proposition or target a different segment
Exam Alert: When Desirability and Viability are strong but Feasibility is weak, do NOT launch a degraded experience (risks brand trust) or shelve entirely (wastes validated demand). Find the MVP that is technically feasible.
Market Sizing: TAM → SAM → SOM
Market sizing quantifies the revenue opportunity and is critical for investor pitches, resource allocation, and strategic planning.
TAM — Total Addressable Market
The largest possible market if you captured 100% of all potential customers. Based on secondary research from credible sources (Gartner, Forrester, Statista, industry reports).
Market sizing quantifies the revenue opportunity and is critical for investor pitches, resource allocation, and strategic planning.
TAM — Total Addressable Market
The largest possible market if you captured 100% of all potential customers. Based on secondary research from credible sources (Gartner, Forrester, Statista, industry reports).
Avika Example: India mental health market = $3 billion TAM.
SAM — Serviceable Addressable Market
The portion of TAM you can actually reach with your specific product, given geographic, demographic, and product limitations.
Avika Example: Working adults aged 20–65 in India = $1.8 billion SAM (filtered from $3B TAM).
SOM — Serviceable Obtainable Market
The realistic slice of SAM you can capture — typically 1–10% for startups. This is your actual revenue target.
Avika Example: 3% of SAM = $54 million SOM.
Nesting: TAM > SAM > SOM. Always. SOM is what goes into your financial projections.
Calculation Example (Ed-Tech)
TAM: 300 million students aged 15–25 in India
SAM: 60 million with reliable internet + English proficiency
SOM: 1.5% of SAM = 60M × 0.015 = 0.9 million students in Year 1
Defensible SAM Calculation
Investors push back on lazy SAM estimates. For an English-language online coding bootcamp targeting Indian working professionals:
Start with working professionals seeking upskilling
Filter by willingness to pay for online education
Filter by English-language preference
Filter by coding/tech interest
Using GDP ratios to scale global figures is too crude. Including offline/K-12 segments inflates beyond the serviceable segment. TAM ≠ SAM.
Top-Down vs Bottom-Up Forecasting
Top-Down: Start with the total market size and narrow down by applying percentage filters. Fast but often unreliable — "5% of a $50B market" sounds compelling but lacks validation.
Bottom-Up: Build estimates from specific, identifiable customer segments, calculate individual segment potential, and aggregate. More reliable because it is grounded in concrete, verifiable assumptions.
Avika Example (Bottom-Up): IT companies (X employees × Y penetration rate) + BPO companies + airlines + hotels + private banks + healthcare institutions = total SOM validated from multiple segments. Multiple methods confirmed 3% market penetration as realistic.
Business Model Canvas (BMC)
The BMC (Alexander Osterwalder) is a one-page strategic tool with nine building blocks:
Block
Description
Customer Segments
Who are your target customers?
Value Propositions
What value do you deliver to each segment?
Channels
How do you reach and deliver value to customers?
Customer Relationships
What type of relationship does each segment expect?
Revenue Streams
How does the business earn money?
Key Resources
What assets are required to deliver the value proposition?
Key Activities
What critical activities must the business perform?
Key Partners
Who are the essential external partners/suppliers?
Cost Structure
What are the major cost drivers?
Exam Alert: "Unfair Advantage" is NOT one of the nine BMC blocks — it belongs to the Lean Canvas.
Lean Canvas vs Business Model Canvas
The Lean Canvas (Ash Maurya) adapts the BMC specifically for startups by replacing blocks that are less relevant in early-stage ventures:
BMC Block (Removed)
Lean Canvas Block (Added)
Customer Relationships
Problem (+ Existing Alternatives)
Key Partners
Solution
Key Activities
Key Metrics
Key Resources
Unfair Advantage
Why the change? Startups should NOT rely on partnerships before validating the core model (Key Partners removed). They need to articulate the problem clearly (Problem added), identify what to measure (Key Metrics added), and identify defensibility (Unfair Advantage added).
Living Document: The Lean Canvas is explicitly designed to be iterative, not fixed. When Design Thinking empathy research reveals a deeper problem than the initial hypothesis, updating the canvas is the correct response — not preserving the original narrative.
Revenue Models
Model
How It Works
Examples
Subscription
Recurring payments (monthly/annual)
Netflix, Spotify, SaaS tools
Freemium
Basic features free, premium features paid
Slack, Dropbox, LinkedIn
Usage-Based
Pay per use/consumption
AWS, Twilio, cloud computing
Marketplace
Commission on transactions between buyers and sellers
Amazon, Uber, Airbnb
Advertising
Revenue from displaying ads to users
Google Search, Facebook, YouTube
Crowdsourcing/Auctions
Facilitation fees on user-generated transactions
eBay, Kickstarter
Avika Example: ₹1,200/employee/year with 10% volume discounts for larger companies = subscription-based B2B SaaS model.
Key Financial Metrics
Metric
Formula/Definition
Why It Matters
ARPU
Average Revenue Per User
Revenue efficiency per customer
CLTV
Customer Lifetime Value — total revenue from a customer over their lifetime
Guides acquisition spending limits
CAC
Customer Acquisition Cost — total sales & marketing spend / new customers acquired
Must be significantly less than CLTV
Churn Rate
% of customers who stop using the product in a given period
Inverse of retention; high churn kills growth
Golden Rule: CLTV should be at least 3× CAC for a sustainable business model. If CAC > CLTV, you lose money on every customer acquired.
Sales Funnel Conversion Model
The sales funnel shows dramatic narrowing at each stage:
Stage
Typical Conversion Rate
Unqualified → Qualified
~50%
Qualified Lead → Meeting
~30%
Meeting → Proposal
~15%
Proposal → Win
~5%
Implication: If you need 10 closed deals, you need approximately 200 unqualified leads entering the top of the funnel (200 × 50% × 30% × 15% × 5% ≈ 10).
Total Revenue Formula
Total Revenue = Unit Price × Number of Units × Conversion Rate
This basic formula is the foundation for revenue forecasting. Each variable can be further decomposed: Unit Price may include tiered pricing; Number of Units comes from SOM estimates; Conversion Rate comes from funnel analysis.
Cost vs Impact Matrix
Features and investments are plotted on two axes: Impact (Y-axis) and Cost (X-axis).
Low Cost
High Cost
High Impact
✅ Quick Wins — Prioritise immediately (best ROI)
📋 Major Projects — Plan and justify with business case
Low Impact
🤔 Fill-Ins — Consider if resources are available
🚫 Time Sinks — Avoid entirely
Exam Alert: Low Impact + High Cost = Time Sink. The recommendation is always to AVOID, not to "plan for later." This is the most testable quadrant.
Risk Assessment Grid
The Risk Assessment Grid prioritises assumptions and risks based on two axes:
X-axis: Level of Uncertainty (how unsure are we?)
Y-axis: Impact if Wrong (how bad if the assumption fails?)
Priority: Test high-uncertainty, high-impact assumptions FIRST using validation methods. Low-uncertainty, low-impact assumptions can be accepted without testing.
Validation Methods
Smoke Testing
Present the product offer to potential customers and track engagement (clicks, sign-ups, willingness to pay) before building the full product. It validates demand with minimal investment.
Example: A landing page describing the product with a "Sign Up" button. If 500 visitors produce 50 sign-ups (10% conversion), demand is validated. If only 2 sign up, rethink.
Rapid Prototyping
Build quick, low-fidelity versions to test core assumptions before full development. Can be wireframes, clickable prototypes, or concierge MVPs (manually delivering the service to validate demand before automating).
Technology Readiness Levels (TRL)
TRL is a 1–9 scale assessing technology maturity:
Level Range
Stage
Description
TRL 1–3
Basic Research
Proof of concept, laboratory validation
TRL 4–6
Development
Technology validated in relevant environment
TRL 7–9
Deployment
System demonstrated and operational in real conditions
TRL helps PMs make go/no-go decisions on incorporating emerging technologies. A TRL 3 technology may be exciting but is too immature for a production product launch.
AI in Feasibility Analysis
AI assists across all three feasibility domains:
Domain
AI Application
Technical Feasibility
Scan APIs, generate system architectures, assess integration complexity
Business Feasibility
Simulate unit economics, project revenue scenarios, benchmark against similar startups
Market Feasibility
Analyse demand patterns, simulate user onboarding flows, predict adoption curves
Financial Calculations
Net Present Value (NPV)
NPV accounts for the time value of money — ₹1 today is worth more than ₹1 next year.
Shorter payback = lower risk. Investors typically want payback within 2–5 years depending on the industry.
Ten Types of Innovation Framework
Innovation is not limited to product features. The Ten Types of Innovation framework categorises innovation across three domains:
Domain
Innovation Types
Configuration (inner workings)
Profit Model (changing revenue structure), Network/Partnerships (strategic alliances), Structure (organisational redesign), Process (internal development improvements)
Treating TAM as expected revenue — TAM is the theoretical ceiling if you had 100% market share
Confusing BMC and Lean Canvas blocks — "Unfair Advantage" and "Problem" are Lean Canvas only
Forgetting the Lean Canvas is a living document — it should be updated when new evidence emerges
Categorising Low Impact + High Cost features as "plan for later" — they are Time Sinks to be avoided
Using top-down market sizing alone — always validate with bottom-up analysis
Assuming positive revenue means a viable business — if CAC > CLTV, growth accelerates losses
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