Over the past several days, I’ve generated 60+ startup ideas by following my idea generating process I blogged about last week. When I look over my list of ideas I have a lot of “gut feelings” about them. Some of the ideas seem too simple, some seem too complex, some seem dumb, and some seem beyond my skill set. While I think it is important to, at times, trust your gut. I also think it’s important to not throw away an idea before you at least consider its merits.
In today’s post I’ll go over my personal criteria to evaluate each startup idea. Similar to my idea generating process, I created this list of criteria for myself. I designed this list to help me think critically about each of the ideas I generated. I recommend that you take what I’ve written here as a starting point, do some more reading and research, and create your own idea evaluation process tailored to what’s important to you.
Criteria for success
After reading a ton of articles about “good” startup ideas, I created the following list of 5 criteria.
To help me keep track of my evaluation, I created a new excel sheet in my Startup Idea Workbook (which you can download from the Resources page). I put each of the criteria at the top of a column, and each idea on a row. I then gave each a idea a score on a 5 point scale.
- Problem/Solution fit – Is your idea a perfect solution to the customer problem? Or are there still some missing pieces or hurdles that the customer will need to jump? The more complete the solution, the easier it will be to convince customers to buy the product. But if the product/solution fit isn’t perfect don’t throw out the idea just yet. It might just need some work and fine tuning. More discovery research can help with that.
- Personal Suitability – Are you the best person to start this business? For example, if you want to start a business in the medical space, do you have experience in the medical field? Would someone with a medical degree or experience in hospital administration be better suited for the job? If you don’t have the right background for the idea, you don’t necessarily need to drop the idea. But you might need to find a co-founder with the credentials and experience you lack.
- Personal Skill – Similar to the criteria above, do you have the technical skill to build out the product or service? For example, if your idea requires that you design and build an iOS app, do you have design or engineering experience? If you don’t have the required technical skills, you might need to pay someone to do that part for you.
- Time and investment goals – Are you looking to launch a side-hustle business you can run by yourself in your spare time? Or do you ultimately want a company that can employ you, and other employees, full-time? Similarly, do you want to start a business you can bootstrap and fund yourself? Or do you want to get venture capital? Take an honest assessment of what you have the time, energy, and money for and rate your startup ideas based on what kind of investments they’ll require from you.
- Market/Competition – Is there lots of competition in the space and multiple solutions on the market? Or is this a new, fresh idea? The more crowded the space the more effort it will take to make your business stand out. However, if you’ve identified a big gap in the market it’ll be easier for you to gain traction.
The most important criteria of all
While the five criteria above are a great way to objectively evaluate you ideas, you should still take stock of your “gut feeling”. You need to consider the most important criteria of all: Do you like it?
A would-be entrepreneur on Quora asked:
How important is it that the business you’re starting fits your personality?
Your business should fit your personality as well as all other aspects of your life. And it is important, especially in the beginning, to be incredibly honest with yourself about who you are, what you enjoy doing, what you don’t enjoy doing, what you are talented at, what you are not-so-talented at, and what you actually have the endurance for. All of those factors should go into your decision making process when it comes to deciding what kind of business you want to have.
Next step in the challenge: Research
Now that I’ve whittled down my long list of ideas, it’s time to move on the next step of the challenge: research.
Startup Challenge: Try to take a start-up idea as far as you can without building a thing.
It’s time to find out if any of these ideas have legs, and that requires some discovery research and validation. I need to know if the assumptions I made about my target audiences are true, if the problems I identified are big enough to matter, and whether my solutions are in any way to attractive to potential customers. Since each idea is different, I’ll need to use different research methods to validate each one. And I’ll be breaking out each investigation into separate blog posts. I don’t want to gloss over or skimp on any details.
I’ll also be sending updates on the mailing list, so be sure to sign-up if you don’t want to miss anything.
More links for your reading pleasure
- Entrepreneurs: Here is how you can find problems to solve (Inc.)
- 3 Reasons your business should develop a must-have product (Smallbiz Trends)
- How to evaluate your startup like a VC (Entrepreneur)