Evaluating Startup Ideas

By Steve Poland • October 20, 2009

Someone just asked me, I responded with the following in less than 2 minutes [possibly 1 minute]. What would you tell someone that asked how to evaluate his/her startup ideas?

Evaluating ideas — talk to people; tell them your idea; what problem does it solve. Great if it solves a problem you personally have — because then you know a need exists [if you didn't find a solution already in all your research]. Start small and ugly. Don’t go into debt — 1 in 100 ideas that are executed actually become something. [I made that number up, but it's close enough -- don't gamble everything you have; the idea is to get other people involved so you have less risk... if others put money up, or will buy your thing, or use it, then you know you have something]. Stick away from pitching friends — they’ll likely nod their head, think you’re crazy, but won’t tell you because they don’t want to hurt your feelings or burn out your enthusiasm/passion that you obviously have for whatever you’re pitching them.

Evaluating Criteria for your Web 2.0 Business Idea I’d like to start a discussion about evaluating your business ideas — and determining which one to run with and build a start-up out of. What criteria do you feel are important? How can each...
Some New Ideas & Startup Weekend In Boulder this weekend, something cool is going down — Startup Weekend. 72 people are getting together this weekend (starting tonight 6pm) and going to create a business in 3 days. I’m excited for them...
My Favorite Ideas for Ringside Startup to Use These are some hand-picked ideas from my Techquila Shots vault that I think are the best and most practical (given the anticipated budget) for Ringside Startup. Please contribute to Ringside Startup if you’d like to...
Web Startup Ideas – The List and The Drought I’ve published a ton of my web startup ideas in the past (see my Archive page and scroll through them), but have shown a bit of a drought here on my site. I still get...
Startup Weekend Toronto – My Two Cents Overall the weekend was a blast — but not exactly what I expected. I had my own expectations of the weekend after hearing about the Boulder Startup Weekend. I had expectations of a lot of...

Related posts brought to you by Yet Another Related Posts Plugin.

Comments

3 Responses to “Evaluating Startup Ideas”

Coding and Stuff » The entrepreneur on October 20th, 2009 5:49 pm (perm link)

[...] ideas for a startup. I was stoked to get a reply from Steve really quickly, which he posted on his blogEvaluating ideas — talk to people; tell them your idea; what problem does it solve. Great if it [...]
Ben Hallett on October 20th, 2009 5:52 pm (perm link)

Thanks heaps for your quick reply Steve. Gave me a few things to think about.

I’ll definitely be getting out and talking to some of the people that my ideas might help in the next few days.

Thanks again.
Tom Sieron on October 22nd, 2009 8:47 am (perm link)

If someone asked me how to evaluate a startup idea I’d advise them to try and answer the following questions about their idea:

1. What’s the real issue? (define domain problem area)
2. What are you trying to accomplish?
3. Who is your customer?
4. What does your customer consider value?
5. What specification must the solution meet?
6. What are the minimum results required?
7. What are the risks?
8. How are you going to make money?
9. How is the competition in similar fields doing?
10. Which of their current “noncustomers” should you be doing business with?

Usually people think they have the idea all figured out but when it comes to answering the really basic questions they start to discover that their answers are vague and really unspecific.

I find that helping others evaluate their ideas most of the time means forcing them to think harder about their own ideas.

In my opinion all the debt advice, “start small and ugly”, “release often release early” and all the rest of the “Getting Real” type of advice comes after you validate a business idea.