Summarizing insights from this Y Combinator video, these are 10 key questions to ask when evaluating startup ideas.
1. Founder-Market Fit
Do you have the expertise, passion, and deep understanding of the market to effectively address the problem? A strong founder-market fit means you're not only knowledgeable about the industry but also genuinely passionate about solving the specific problem.
2. Market Size
How large is the market? Consider whether the market is currently sizable or if it's a niche market with rapid growth potential. A larger market offers more opportunities for growth, but a niche market can also be lucrative if it’s expanding quickly.
3. Problem Acuteness
How pressing is the problem you're aiming to solve? Assess whether it's a significant issue that people genuinely care about. Solving a major pain point can drive demand and ensure customer loyalty.
4. Competition
Is there existing competition in the market? While competition can validate market demand, it’s important to evaluate whether you can offer a unique value proposition that sets you apart from entrenched competitors.
5. Personal or Known Interest
Do you or someone close to you have a personal connection to the problem or solution? This personal interest can fuel your passion and commitment, driving you to overcome challenges and stay focused on your goals.
6. Timeliness
Is the need for your solution emerging due to recent technological advancements, regulatory changes, or evolving societal needs? Timing can significantly impact the success of your startup, making it crucial to launch when the market conditions are favorable.
7. Existence of Proxies
Are there existing large companies or solutions that indirectly relate to your startup idea? Identifying proxies can provide valuable insights into market dynamics and potential pathways for growth.
8. Long-term Commitment
Are you prepared to dedicate years of your life to building and scaling this idea? The entrepreneurial journey requires persistence and long-term commitment. Ensure you’re ready to invest the necessary time and effort.
9. Scalability
Is your business model inherently scalable? For software-based solutions, scalability can be more straightforward. However, consider the challenges of scaling services or labor-intensive businesses and plan accordingly.
10. Idea Space Analysis
Is your idea situated within a promising idea space with a track record of successful ventures? Analyze different idea spaces and their historical success rates to gauge the potential of your startup. Being in a fertile idea space can increase your chances of success.