What are the best practices to evaluate a new startup idea?
I find this post from Ev very useful but would love to get more perspective on how to identify product ideas which may have more chances of success.
It is less about the idea and more about the people behind the idea. Team is by far the most important factor in any investment decision we make. This is especially true at the early stages since we know that there will be many in changes in the path to building a great company. The constant in all of this change is great people with the conviction and determination to build something special.
Markets do matter as well. It’s not about a chart from a research report explaining that a certain market is large. More importantly, we look for the kernel of something interesting that could lead to more interesting opportunities down the road. Its a narrative rather than a bar chart that doesn’t necessarily have to be right but that describes a vision for taking advantage of a changing landscape.
Finally, in the early stages, its hugely important to iterate and really test the market in a capital efficient mode. It’s important for us to understand whether that mindset exists and whether an entrepreneur has demonstrated that approach to date. In this day and age, its not about raising a bunch of money to build a demo 6 months from now, as an example. Its about having a built a quick demo or prototype to start testing hypotheses from day one.
Markets do matter as well. It’s not about a chart from a research report explaining that a certain market is large. More importantly, we look for the kernel of something interesting that could lead to more interesting opportunities down the road. Its a narrative rather than a bar chart that doesn’t necessarily have to be right but that describes a vision for taking advantage of a changing landscape.
Finally, in the early stages, its hugely important to iterate and really test the market in a capital efficient mode. It’s important for us to understand whether that mindset exists and whether an entrepreneur has demonstrated that approach to date. In this day and age, its not about raising a bunch of money to build a demo 6 months from now, as an example. Its about having a built a quick demo or prototype to start testing hypotheses from day one.
1) People
2) People
3) People
4) Market - is it large and early? are there multiple drivers to market success and creation?
5) Something special (aka "the magic") - all startups have something special. often technology, deep domain experience, a killer angle on a new product. sometimes startups have all of this. how special is special?
2) People
3) People
4) Market - is it large and early? are there multiple drivers to market success and creation?
5) Something special (aka "the magic") - all startups have something special. often technology, deep domain experience, a killer angle on a new product. sometimes startups have all of this. how special is special?
