Answer: It all comes down to how much cash is it going to generate or how much market share is it going to own.
To explain further…
If it’s not a cash machine, if it’s like an iPhone app or a product that just attracts attention and gets a lot of people looking at it, then it can be worth cash to an advertiser because they want to put their ads there. Figure out the cash value look at what it’s going to be worth – that’s what you’re selling. You’re selling how fast the investment can be paid back or how fast it can bring cash in to give money to the investor (to pay themselves back plus earn a profit on top of that).
It’s all about the cash – that’s really what it comes down to. There are a lot of businesses, particularly in the IT world, that don’t have to generate money to be worth something. Look closer – if your product is going to add value, be added to a service, or something that already exists (like helping a technology work better), there has to be an end result and more profit or more cash. That’s what it comes down to. This is business. If you’re in a non-profit setting, there’s going to be a result that’s tangible like more changed lives, more real estate safe for the environment, etc. Whatever it may be, look for that end result and that’s how you start calculating what your idea is worth today, a year from now, five years from now and so on.
