Weekly 37: How to evaluate new business ideas

April 25, 2023

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,

Dave Schools, Stephen Moore & Amardeep Parmar

Weekly 🔥 37: How to evaluate new business ideas was originally published in Entrepreneur’s Handbook on Medium, where people are continuing the conversation by highlighting and responding to this story.



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