Funding Strategies for New Product Ideas

When faced with more ideas for new products than available investment funds, it’s essential to adopt a strategic approach to maximize value and minimize risk. This article explores the best approach to handle such scenarios and its relevance to the PSPO II exam.

Exam Question

You have more ideas for new products than you have money to invest. What should you do?
(choose the best answer)
A. Rank proposals by market potential (Unrealized Value) and fully fund as many as you can.
B. Invest in all of them, but at proportionally lower amounts, and see how they all perform.
C. Invest in the proposals that have the highest projected Current Value for the next year.
D. Fund small experiments to test the proposed ideas and assumptions, then evaluate results.

Correct Answer

D. Fund small experiments to test the proposed ideas and assumptions, then evaluate results.

Explanation

Correct Answer