Mr. Spears was my high school physics teacher. He did his best at teaching a subject that he really didn’t understand that well. Nevertheless, the course opened my mind to how the world works. I am particularly thankful to him for introducing me to the concept of potential and how an elevated ball’s energy is converted from potential energy to kinetic energy as it accelerates down a hill. I have been fascinated by the concept of potential, and its measurement, ever since.
The concept of measuring the ‘potential’ of a thing (idea, person, business, etc.) is fascinating as it involves seeing beyond the here and now. In business, when we evaluate a nascent opportunity, we must look beyond what it is, to what it can be. In other words, we are measuring its potential value in the future as opposed to its actual value today. It strikes me that this envisioning of how the future may unfold is essentially the same problem that Mr. Spears challenged us with back in high school physics: how much of the ball’s potential energy can be converted to kinetic energy by taking into account the height of the hill and the friction (usually assumed to be zero) along the ball’s path.
These days, my problem space doesn’t generally involve elevated balls or frictionless paths. My challenge instead is to determine the value of a new business idea by taking into account the magnitude of the idea (akin to the mass), the market dimensions (akin to the height), the need it addresses (akin to gravity) and the obstacles (akin to the friction) along the envisioned commercialization path. While not a perfect model, I think this potential energy model is useful enough to demonstrate the key variables in the ‘physics’ of commercialization. But more importantly, it highlights the predictive nature of the commercialization business. The value of an idea lies not in where it sits today, but rather in how much market ‘velocity’ it can attain. Unfortunately there are few people that have the ability or training to see the potential of things and fewer still that have the initiative and/or courage to get the ball rolling.