Idea evaluation, not to be confused with [[2.5 Idea Validation (probably skip this step?)]] is the process of initially evaluating an idea, without external input, on whether or not it suits your goals as a startup. As discussed in [[1. Idea Creation]], the 0th step of coming up with ideas is identifying your goals. You might find a killer problem, and have a good idea for a solution, and have all the [[Founder Market Fit]] (FMF) that you could ever want, but if your goal is to become a billion dollar corporation, and the market is 150 people total, it's probably not the right idea. So, the process of Idea Evaluation is simply crossing off a checklist for that idea on whether or not it has the potential to meet your goals as a founder. For my purposes, I'll do one that has the potential to be a unicorn, since that's what YC values, and I want to achieve the results that the successful YC company achieves, and therefore, it makes sense to use their metrics when evaluating my ideas. If you want to achieve something less than that of a unicorn company, you can adjust these standards accordingly. This looks different if you've already built an idea than it does if you're just in the idea phase. The standards for a company that has an MVP and customers is based on traction. However, at the idea phase, it's mostly based on two factors. 1. The founders, and their [[Founder Market Fit]] 2. The idea (market, is it a [[Tarpit idea]], etc) ## Founder evaluation list - [ ] Do you have overall [[Founder Market Fit]]? - [x] Do you have first hand experience with the problem you're solving? - [x] Do you have a unique insight into the issue that others may not have? - [x] Do you have some first hand evidence to prove this is a problem and there's a market for it? - [x] Have you created a solution for yourself or for a company for this problem? - [ ] Are you the right people to build it? - [x] CAN you build it? Do you possess the skills needed to build and take this to market without needing to hire people? - [x] If you could assemble a dream team of anyone in the world to build this company - would you and your cofounders be on that team? - [x] What specific skills, knowledge, and insights do you possess that your competitors, or people thinking of building something, doesn't understand or see? - [ ] Are you serious about it? - [ ] Are you willing to work on this for the next 1-10 years exclusively? - [ ] Are you excited about the problem or passionate about it? - [ ] What is going to keep you working on it 4 years down the line when things look like shit? - [ ] Are you willing to sacrifice time, your job, and your income for it? In essence, betting on you to solve this problem needs to feel like a fool-proof bet. It needs to feel like you're already positioned to have an insanely good trajectory of success, that you're on a rocketship that's about to explode, and only you are the right people to pilot it. ## Idea evaluation list - [ ] Is the market big enough? - [ ] Is the TAM more than $1B? - [ ] How much are people willing to pay for this? - [ ] Do you have competitors? If so, what are they able to charge? - [ ] Is the problem already over saturated? If so, do you have something unique that could disrupt the entire scene? - [ ] In general, in order for [[disruption]] to happen, your solution has to be 10x better than the existing ones. If it's only 10% better, adoption will be slow and people will stick with what they already know. Think about trying to disrupt Google. It took 15 years of AI advancement before we had something better. - [ ] Is it a [[Tarpit idea]]?? - [ ] Is it targeting a real & burning problem? - [ ] How many hours a day or a year would your potential customers save? How much is that time worth to them? - [ ] Is this a burning problem that DEMANDS a solution?? - [ ] Are the alternatives a nightmare and super painful? - [ ] Have people tried solving this themselves and created small random systems like spreadsheets or some in-house solution? - [ ] Have you worked at a company where they had to build something to solve this problem, and the solution actually worked really really well? - [ ] Are there any competitors? If not, it may indicate that the problem isn't big enough or burning enough to sustain a business income around - [ ] Is this something that would become a staple in the process? What is the frequency of use they would have to return with? Does that fit with the pricing model you had in mind? In essence, the problem has to be a burning issue that people need solutions for. They'll be willing to pay for a good solution, and continue to use it for years to come. Do you have some sort of unique proof to show that this is a big issue? Perhaps from your personal, corporate, or 2nd hand experience? Also, it's worth noting you don't want to assume you have the perfect product on the first iteration. Just something small that solves a burning issue. Don't fall prey to the [[Fake Steve Jobs]].