[AI-Driven New Business Creation] Qualiteg's Approach to Quantitative Goal Definition for Proving Your Own Results

Hello to everyone visiting the Qualiteg blog. I'm Michele. In my work on AI-driven new businesses and marketing, there are certain questions I hear from clients again and again. Through this blog, I would like to offer my own answers to the challenges that anyone considering an AI-based business is likely to face.

I am sometimes asked how one can possibly set numerical targets before the idea itself has been decided. The reality, however, is that many clients exploring a new business have not defined their goals in the first place, let alone the numerical targets behind them, and many of them go on to have a painful experience later.

Today I would like to explain why quantitative goal definition is necessary at an early stage, and how to go about it.

What is quantitative goal definition?

Quantitative goal definition is a method of setting objectives using concrete numbers. It makes it possible to measure progress toward those objectives objectively and clearly.

For example, you might set a concrete numerical target such as "acquire 50 new customers per month." Setting quantitative goals gives you an important yardstick that helps boost motivation, allocate resources efficiently, and maximize results.

How to actually decide on the goals

What matters is deciding in advance what this new business is for, and what measurable criteria, and how many of them, will count as having achieved it.

Let's walk through this using the example of Company A, an in-house electric bicycle service.

Company A has decided to explore a service that improves quality of life for busy working professionals in urban areas, and is considering three directions for the idea:

• A service that helps people maintain their health at the office or at home
• A service that relieves work fatigue and helps people recharge
• A service that supports people in advancing their own careers

In evaluating whether to commercialize the new business, the company settled on the following three points as its go/no-go criteria:

1. A market that no major player has yet entered in Japan, but where there is market demand and growth can be expected
2. A service proposal that leverages the company's own strengths to create business synergy and differentiate it from competitors
3. The service can be launched to market within the current fiscal year

Since the service proposal is not yet finalized at this stage, it is a good idea to set quantitative targets for aspects such as market viability that will inform the commercialization decision.

• To demonstrate market growth potential, a CAGR of 5% or more must be expected over the five years from 2023.
• After commercialization is approved, launch the service to market within the fiscal year and reach 10,000 or more monthly users in the following fiscal year.
• From the second year after launch, target annual revenue of 100 million yen or more.
• Operating at a loss is acceptable for up to three years after market launch, but aim to become profitable from the fourth year onward.

In this way, present quantified targets like these and use them as the basis for a discussion with the business owner to align on how large a business you are aiming for and by roughly when the investment needs to be recouped.

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Why goals need to be set in advance

When I propose setting numerical targets in advance to our client companies, nine out of ten people react with reluctance. Most of them worry that declaring their own numerical targets will only come back to haunt them later.

At Qualiteg, however, we strongly recommend setting numerical targets at precisely this stage, when the business is being explored. We understand, of course, that committing to numbers for a new business whose outcome is uncertain creates pressure. But setting numerical targets raises team morale and builds trust with the business owner.

We also occasionally hear stories from some large companies where a successful new business ends up being credited to another department. That is why we advise clients to put in place from the outset a mechanism that lets them prove that they planned the business themselves and achieved the numbers they declared.

Thank you very much for reading this column to the end. At Qualiteg, we provide training and consulting on AI technology and on how to plan new businesses. If this has piqued your interest, or if you have specific requests, please feel free to contact us via the inquiry form here.

We also run a popular workshop for those who want to master the steps of new business creation. The training focuses on having each participant think about the business from an executive's point of view, and the content is designed not only for planning staff but also for their counterparts in engineering, design, and marketing.

We sincerely look forward to hearing from you. Please stay tuned for the next column.