How to quickly estimate the revenue impact of new product ideas

Product managers often overlook the importance of early revenue validation during product discovery, which can lead to prioritization challenges and missed opportunities for financial success. A straightforward, five-minute exercise using a simple formula—total revenue impact = percent users impacted x percent adoption x percent revenue lift—can help assess the revenue potential of product ideas without the need for complex data analysis. This approach encourages product teams to quickly differentiate between viable and non-viable ideas, fostering a business-focused mindset. Using a hypothetical example of a beauty appointment booking platform, the exercise demonstrates how three potential features—tipping options, premium service upsells, and bundled service packages—can be evaluated for revenue impact. While the tipping and upsell features show limited revenue potential, the bundled service packages appear promising enough to explore further. This method not only aids in immediate decision-making but also enhances long-term estimation skills, enabling product managers to refine their intuition for revenue generation.