How to Evaluate Startup Ideas
At the heart of any startup there’s growth. There’s a lot of talks about fast growth. Because fast growth allows you to outperform your competitors more quickly. Faster you get ahead of the competition, you become rich faster, not the other way around. There’s an approach for B2B SaaS how to become a unicorn in five years — T2D3. Two years to lose turnover, and then three years to double it.
Examples include Marketo, NetSuite, Omniture, Salesforce, ServiceNow, Workday, Zendesk.
How do you gain a rapid growth?
Find a problem that is frequent, permanent, incremental, annoying, expensive, and mandatory to solve. That is, we get a problem that is experienced by +1 million people/companies, the market for solving this problem grows 20% annually, the total market size is +1 billion USD, market regulation is predictable and clear.
For example, I did my dating startup exactly according to these criteria last year. Investors appreciated it, because they went over exactly these points.
SISP — solution in search of a problem. Not to shoehorn, but to look for a solution to a problem with an adequate technology. Don’t put blockchain where it’s not needed. Or on the contrary, don’t try to bypass the trust problem if the best solution is, in your case, a smart contract. But you need to have the competence to do so or the “secret sauce.”
For example, OpenSea or Sorare.
The secret sauce. At the heart of any success there’s an unfair competitive advantage that only you have. What does the ideal profile of founders look like? They’ve worked in an IT company for 10 years, have been involved in a specific area for a long time, haven’t found the capability or credibility within the company to solve the problem they thought was important, have gone to market with their idea.
For example, these are the recent graduates of YC W22, ngrow.