Rate Your Business Idea: The 7 Essential Criteria for Startup Success

Do you have a business idea but don't know if it's worth a shot?

After brainstorming on business ideas, people often come up with multiple cool ideas (in case you missed the brainstorming part on how to generate many ideas fast: https://www.launchasap.co/p/find-a-business-idea).

Now it's time to figure out if they're worth building.

Here are the criteria I find most important.

1) Passion: Do you like working on that topic?

Because if you're successful, you might be working on that for the next 10 years. And you're going to be successful — I know you have what it takes!

2) Scalability: Can you scale this business easily?

You wanna do startup consulting and think you can scale this easily by hiring more consultants? That's not easily scalable. You need to scout and hire each consultant, find clients for them, rent offices, etc.
Instead: Build a platform where startup consultants can offer their services. Or put your knowledge in an online course.


3) Founder / Market Fit: Can you actually build it?

I wanted to grow the chicken of the woods mushroom and make it into a successful alternative meat business.

But a) I have a computer science background and
b) even biologists are failing growing this mushroom in a stable way (that's why we shut down this business in the end).

4) Demand: Does anyone want that?

Do you personally want it or know someone who would?

If not: start talking to strangers about it. But never reveal your idea first! This will lead to biased results because people usually don't want to make others feel bad — and that's why they won't tell them their idea is shit even if they think so.
—> Always start with the problem, and ask them about their past (read The Mom Test). E.g. for startup consulting: When was the last time you sought advice? What kind of advice were you seeking? Were you able to get it, and were you satisfied with it? Why or why not? Etc.

5) Impact: do you really need to start a business just for profit?

Why not create something that brings actual value to our society? There have been enough companies exploiting people and planet.
 

6) Market size: Can you make money with this?

Ideally, your market size is $20B or more — at least this is what many big VCs aim for: They want to fund startups which can take over 5% of that market, which is $1B. They want to fund potential unicorns 🦄

7) USP: How do you differentiate yourself from your competition?

It's crucial to know exactly why users will use your product instead of existing ones.
Ideally, you either invent something completely new (like a cure for baldness) or improve something 10x (From Zero to One: Notes on Startups, or How to Build the Future).

Your tasks for this week:

1. Rate all the ideas you can imagine yourself working on with these simple questions from above (if you want a more comprehensive Google Sheet template with 13 weighted criteria, drop a message)

2. Pick your favorite one!

But no matter what your idea is, the most important step is to start. Start ASAP, execute fast, and learn rapidly. And never give up!

Join launchASAP to become part of the family. I know you belong here.

In the next episode we'll look at testing: Many startups fail simply because their ideas haven't been tested thoroughly. It's actually not that hard. Just join launchASAP to not miss learning how!

Best of luck
Michael

PS: You can do it!