Almost always, requests for resources require making two decisions: Should we support this business idea? and Is this proposal the right way to go about it? Most capital budgeting processes are set up to vet projects (in other words, they're aimed at the second question, not the first). It is usually possible to carry out fairly rigorous quantitative analysis comparing the plan of action in a proposal with alternatives. It is important that this analysis be done-and it is often done ad nauseam. But our research shows that the first question, the business question, is more important and far more difficult to answer-and it is often ignored.

I like to tell people that all of our products and business will go through three phases. There's vision, patience, and execution.

The vision phase is full of excitement, vim, and vigor. Everything looks big and rosy. At that stage, we don't know what we don't know. Then you get into the patience stage, and that's tough. You have to cut out parts of the product that don't fit. You have to react to what the market is telling you. You get in trouble if you assume that you're going to reach critical mass quickly -- because it's most likely that you won't. Through all of these trials, you can't lose patience. Then you finally get to the execution stage, when you're tuning things up, tracking prices, and figuring out how to get more revenue.

That final execution phase can be a comfortable place to be. Frankly, the vision phase can be very comfortable, too. It's the patience phase that's really not comfortable at all.