How to evaluate your startup idea
Everyone has ideas. It’s not that hard to think about startup ideas. You can find gaps in the market or maybe something that annoys you. An itch that you can scratch.
But how do you make sure your idea is worth spending time on?
Here is a basic framework you can use to create and evaluate startup ideas.
What’s a fast-growing underserved niche?
When everyone is flocking towards the latest trend try to find something less crowded. It will make it easier to start and find customers.
What’s a big pain-point for them?
Try to pin point the real pain point for your niche and customer group. What annoys them that is worth solving. What can you make easier, faster, cheaper or available that wasn’t at all before?
Also read Don’t be afraid to talk to people
How do most people solve it?
How is the pain point resolved today? Maybe it’s a manual work that could be automatized, maybe it’s hiring a consultant or doing a complicated pivot table in Excel. Or maybe it’s not done at all.
Why doesn’t it work for them?
Find out why it isn’t working for them. What makes the current way of solving their problem not good? If it’s good enough you are going to have a tougher time creating a startup around it.
How would I solve it differently?
This is your invention or innovation. Your unique way of solving the problem. Make sure it’s a really good solution.
Also read How to generate ideas for anything
How can I build this with good margins?
Giving stuff away for free can be a good way to get started but it isn’t a business. Make sure you have a plan for how to make money with good enough margins. +50% margin at least is a good guideline.
What is my unfair advantage?
What makes me or my team fit for creating this unique solution? What can we leverage to give us a unique advantage? Is it a patent? A unique algorithm? A killer sales team? A once in a lifetime partner? Unique knowledge about the business?
Having an unfair advantage makes it more likely you will succeed in the long run when competition heats up.
Remember to practice critical thinking and evaluate your ideas properly.