The unfortunate part of being an idea person in entrepreneurship is the tendency to accumulate more ideas than you have time to implement, and consequently, the need to discard most of them. But there are certain defining characteristics of ideas which can determine their success at a given stage in the business lifecycle. It turns out that many of these characteristics are possible to define in a fairly simple checklist. Before you chase an idea, try running it through this checklist and see if it matches what you’re looking for at your current stage of business and financial/risk situation. For instance, if you’re working on your first venture (and not teaming up with a more experienced entrepreneur, which you should do if you can), you might want to avoid scenarios which require large outside capital investments, as the terms offered are generally not as favorable to first-time entrepreneurs.
1. Does the startup serve an immediate need?
1a. To whom?
1b. What need?
1c. If existing solutions meet the need, how can you better meet the need?
2. Can the startup scale to address a broader need in the future?
3. Are the user and the customer the same person? i.e. Does the person paying also receive the benefit?
4. Does more than one “type” of customer need to join simultaneously?
5. Where does the money come from?
6. Can it be bootstrapped? Are initial expenses necessary to acquire revenue?
7. Can you start it off yourself? If not, where will you find the necessary co-founders?
While this is not the end-all-and-be-all of a startup’s viability, it’s a useful tool to narrow down the possibilities before making the mistake of embarking on one that isn’t suitable.