Weekly 🔥 37: How to evaluate new business ideas
In this week’s edition, we discuss
- How to evaluate your new business ideas (it has little to do with sales, CAC, LTV, EBITDA, or any other financial metrics)
- The product-market fit “insane mode” shortcut
Let’s get to it.
9 questions to evaluate a new business idea
Entrepreneurs are problem-solvers, but to solve a problem inherent in your next big idea, you have to know the problem exists in the first place. As Rachel Greenberg writes, that starts with asking some serious questions.
Warning: they may squash 99% of potential ventures.
- How sticky of an idea is this (or could tweaks be added to make it more sticky)?
- What are the global and local industry (and market) trends?
- What is the likely longevity potential of this venture?
- How easily replaceable is this venture, and how can I make it less replaceable?
- Do I have any connections to the industry or target market, and if not, how will I reliably get in front of them?
- Can the daily operations be outsourced or automated? If not, do they require an industry expert, a consistent brand-facing personality, or salaried workers that demand a minimum spend and thus a higher sales requirement to break even and profit?
- Are there current and popular subpar solutions to the problem?
- In the worst-case scenario if my business isn’t a success, what do I come away with?
- How much do I care about or like this product, service, or industry?
👉 Dive deeper into Rachel’s questions here: 9 Questions I Ask to Evaluate a New Business Idea Before Jumping in
The product-market fit “insane mode” shortcut
Achieving product-market fit can take years. Boris Manhart encourages switching into “insane mode” to accelerate the process and reach product-market fit in less than 12 months. Here, he shares some tips to help you achieve this, including:
- Don’t boil the ocean — use the beachhead market strategy, where all resources are focused on winning a small border that becomes a stronghold area, then expand.
- Be patient like a zen master — It’s crucial to understand what resonates with your target customers and what doesn’t, so do your due diligence before jumping into product development.
- Focus on what matters most (your customers) — Instead of becoming too attached to your product, focus on developing a deep understanding of your customers and their pain points.
- Launch fast, learn faster — Launch your startup as soon as possible to receive user feedback, make necessary iterations, and refine your product.
👉 Go deeper into product-market fit insane mode here: The Product-Market Fit Shortcut: Save 12 Months With These 8 Tips
Till next time,
