My business development process begins with identifying a problem or need you can address in a market. You can come from structured ideation, domain expertise, or direct customer exposure. It should align with your technical capabilities, operating strengths, and access. Before doing any of that, you need to answer a more fundamental question:
Is the opportunity large enough to matter?
This is business. The objective is generating revenue and returns—not building interesting technology, accumulating patents, or maximizing R&D spend.
Start With Scale, Not the Ideas
Before developing a business opportunity, you need to understand the scale required to justify the effort.
A small team can build a solid business generating a few million dollars per year. That can be highly profitable and personally rewarding. However, that is fundamentally different from a venture-backed or capital-intensive opportunity.
If external capital is required, expectations change:
- Investors typically look for 5x–20x return potential
- That implies hundreds of millions in eventual revenue
- Which requires access to a large addressable market
As a rule of thumb:
- A $100M market is too small → even strong execution yields ~$10M revenue at 10% share
- A $1B+ market is the minimum threshold → enables ~$100M+ revenue with modest share
In practice, capturing 10% of a market is difficult. Many programs never reach that level due to timing, competition, budget cycles, and execution risk.
Revenue = Price × Volume (No Magic)
Revenue is driven by two variables: price × volume. You can only scale revenue by:
- selling many units at a lower price
- selling fewer units at a higher price
Both must align with the customer’s economic context.
Pricing Must Fit the System
A useful heuristic is what I call:
“Cost of the Living Room”
Products price relative to the system they operate within.
- No one sells a $1M couch
- No one sells a $50 couch
Pricing clusters around what adjacent components cost and what the customer is already accustomed to spending.
The same applies across industries:
- A $1M product is reasonable within a $300M commercial aircraft platform
- A $5,000 product fits a general aviation (GA: General Aviation) owner who spends that on a weekend of flying
- A $100 product fits a consumer automotive use case
If your pricing does not fit the economic environment, adoption will be constrained regardless of technical merit.
Sanity Check the Math
If your goal is ~$100M in annual revenue, the math must close:
- Sell 1M units × $100 → consumer-scale market (e.g., automotive)
- Sell 20,000 units × $5,000 → mid-volume, high-value market (e.g., GA aircraft owners)
- Sell 100 units × $1M → low-volume, ultra-high-value market (e.g., large commercial aircraft programs)
Each path implies fundamentally different:
- sales cycles
- certification burden
- capital requirements
- competitive dynamics
Market Reality: You Don’t Get the Whole Pie
Even in a strong position, capturing share is difficult. At any given time:
- customers may not have budget
- programs may be delayed
- competitors will emerge
- procurement cycles may not align
As a result, 10% market share is an aggressive but reasonable planning assumption for a new entrant. This is why starting with a sufficiently large market is critical. Small markets do not provide enough margin for error.
Bottom Line
- Start with market size and revenue potential, not the idea
- Ensure price aligns with the customer’s economic system
- Validate that price × volume supports meaningful scale
- Assume limited market share and delayed adoption
If the math does not work at the outset, it will not work later.