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?