Before you start a business - make sure you evaluate your startup business idea thoroughly. Most founders fall in love with their idea, before closely studying it and seeing whether it is actually worth building.
Sure, it could solve a problem and it could definitely be something people may want, but the question is - Is it worth starting a business?
If you want to avoid wasting your time on something that won’t scale, you need to evaluate your startup idea like an investor before you start building and spending hours on it.
Here’s the no-BS guide to evaluating a startup business idea with real value— practical steps.
1: Start with the Problem
How are people solving this problem today? Not just looking at your competitors' solutions, but what are they using in terms of systems? Is this problem big enough and urgent enough to solve?
Identify who needs this and how badly they need a solution. Conduct quick surveys or interviews with potential customers to validate how important the problem is.
Do an analysis of what's the real cost (in terms of time, money, and pain) of the current solution and then plan your solution.
And lastly, are customers willing to pay for your solution?
2: Is there a big enough market?
Check if people are searching for this problem online. Do some research. Use Google Trends, Reddit, Quora, or industry reports to check the amount of people looking for a solution.
Check the TAM (Total addressable market) - Look at the industry size reports on sites like Statista, Crunchbase, and PitchBook.
Then check the SAM (Serviceable Addressable Market) – The portion of TAM your business could actually serve.
SOM (Serviceable Obtainable Market) – The market share you can realistically capture in the next few years.
See if there are already players in the market. Are VC’s looking at this space?
3: Business Model: Can You Make Money?
Ideas are great, but at the end of the day, can you make money? Write down how you’ll make money – is it via subscriptions, is it a one time buy, recurring revenue or commission based?
Calculate how much you’d need to charge per customer to be profitable. Do you need to sell mass amounts of your product to make money? Do you need to charge a premium? Or do you simply need 10 large customers?
Ask yourself all the tough questions. Put yourself in the customer's shoes and see if you would pay for it. Will your pricing align with how your customer buys similar solutions?
4: The Competitive Landscape
Every startup has competitors, and if you feel like nobody is competing with you, that's often a red flag. If there is no competition, there is probably no market.
This is where you really analyze things - Why are current solutions not good enough? Is it the price point? What unique insights do you have? What have they missed?
Do you have unfair access to customers? Do you have a patent?
If others are already doing this, study their weaknesses and make sure you have a great defense to support yourself.
5: Execution - can you do it?
If you check all the boxes - great idea, upcoming market, competitive advantage, but your execution skills are lacking, then nothing really matters.
Can you build this with your current skills and your network?
Do you know how you are going to get your first 100 or 1000 users?
Do you have the team, the resources, and a 6-month plan to build and launch?
6: The Scale - Will This Grow Big Enough?
Most investors want to invest in companies that can really scale and have big potential. If your idea can’t scale, it’s probably better to start by bootstrapping.
Think about your solution, does your solution get better or worse with scale?
Can it actually scale profitably? Is there an exit strategy – Will you sell the business? Look for acquisitions or keep it long term or are you looking at an IPO?
The Final Test
Most founders waste years on startup ideas that were pretty much a no beginner from the start. The difference between a hobby and a real business is validation and clear execution.
To sum it up :
👉 Be ruthlessly honest about your idea
👉 Run the numbers before you start.
👉 Validate the market before you build.
Founders who validate first win. The rest just end up wasting time.
Focus on solving real problems, having a solid revenue model, and ensuring you’re prepared to execute. Clarity and action are what set successful startups apart.
The best founders are those who are constantly re-evaluating their ideas, letting them evolve as they learn more about their market and what their customers want. They're not attached to their initial vision – they iterate, make it better and try to solve the problem in the most effective way possible.
Now go evaluate your business!
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