Business Idea Evaluation Qustions

Here’s a collection of questions and observations that you can use to assess the potential of your ideas.

1 Observation by Patrick McKenzie

  • Many things which purport to make particular business processes easier are not in fact solving a problem, because the existing process is Good Enough. If you can’t find any book written about it, any competing software, any much-maligned downloadable Excel spreadsheets… consider that it might not be an important enough problem. Many things which purport to make particular business processes easier are not in fact solving a problem, because the existing process is Good Enough. If you can’t find any book written about it, any competing software, any much-maligned downloadable Excel spreadsheets… consider that it might not be an important enough problem.

1 Observation by Erik Torenberg

  • Younger founders should take market risk (market that are small or doesn’t exist yet)

Older founders should take execution risk (market is very clear & execution, expertise, and relationships are the differentiator).

2 Questions by Paul Graham

  • Who wants this right now?
  • Who wants this so much that they’ll use it even when it’s a crappy version one made by a two-person startup they’ve never heard of?

3 Questions by Andreessen Horowitz

  • Who really wants this today?
  • How many of those people are out in the wild?
  • What macro story must play out in the market [for there to be] market-wide demand?

5 Questions by Tyler Tringas

  • Can I make this?
  • Are people currently spending money on it?
  • How will I get the first 25 customers? Then the next 250?
  • If it works, will it be sustainable?
  • Am I the person to build this business?

5 Commandments by MJ DeMarco

  • Commandment of Control. Is there one person or entity that can instantly kill your business with one decision? Are you fishing in a pond controlled by someone else? And what happens to your business when that pond is taken away?
  • Commandment of Entry. If you do something that takes minutes to accomplish or solve, was there really a problem? Or are you merely stacking yourself atop a mountain of already existing solutions? If you’re starting a Mexican restaurant in a city full of Mexican restaurants, you aren’t satisfying dire cravings.
  • The Commandment of Need. Do you provide sufficient relative value? If you open a pizza bistro and there’s already twenty-five other pizza places nearby, have you provided relative value? Your pizza might be darn good, but relative value doesn’t exist because more than likely, a few other pizza joints are also darn good.
  • The Commandment of Time. Is there a way for you to detach income and your time?
  • The Commandment of Scale. Is what you’re selling replicable, or easily copied into multiple units, locations or chains?

6 Questions by Lenny Rachitsky

  • Do people really want this?
  • Do enough people really want this?
  • What has changed that now allows for this to work?
  • Can you acquire these people efficiently?
  • Is this the right team to build this?
  • Can you stay on top?

7 Questions by Peter Thiel

  • The Engineering Question: Can you create breakthrough technology instead of incremental improvements?
  • The Timing Question: Is now the right time to start your particular business?
  • The Monopoly Question: Are you starting with a big share of a small market?
  • The People Question: Do you have the right team?
  • The Distribution Question: Do you have a way to not just create but deliver your product?
  • The Durability Question: Will your market position be defensible 10 and 20 years into the future?
  • The Secret Question: Have you identified a unique opportunity that others don’t see?

20 questions by Dan Hulton

  • Is this an exciting product?
  • Does this solve a significant enough problem that people will pay for it?
  • Will customers regularly use and see value from this product?
  • Does this product provide value to companies at broad stages of their life cycle?
  • Does this product align with your values?
  • Do you like your potential customers?
  • Will you be able to stay motivated to work on this product?
  • Can you build this product in a reasonable amount of time?
  • What is your moat?
  • Is this product easy to distribute?
  • Is downtime a life-or-death emergency?
  • Will you spend a lot of time doing customer support?
  • Will this product be all-consuming?
  • Does the person who gets the most value out of your product control the credit card that will be used to pay for it?
  • Do your potential customers regularly pay for products, ideally for this kind of product?
  • Is your market a large one with a lot of upmarket competition?
  • Is there demonstrated demand for a downmarket competitor?
  • Is the market still growing?
  • Is it easy to reach your audience?
  • Is there a powerful distribution channel available to reach this market?

Misc Questions

  • How many miracles are necessary? (Elad Gil )
  • Can you articulate why most people think it’s a bad idea, but you understand what makes it good? (Sam Altman )
Written on April 21, 2022

PS: In case we just met: Hi! My name is Jakob.

I'm on quest to explore the opportunities and challenges of permissionless entrepreneurship.