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How to Evaluate a Startup

Updated: Dec 16, 2022

Startup hypothesis: I have a tentative solution to a problem that can be tested.

Phase 1: Make sure your problem has at least one or multiple factors:

  1. Is it urgent? One that needs to be solved quickly.

  2. Is it expensive to solve? If you're able to sort of solve it, then you can charge a lot of money potentially?

  3. Is it mandatory? People have this problem, and they have to solve it.

  4. Is it frequent? Is it a problem that people are going to encounter over, over, and over again, and often in a frequent time interval?

Phase 2: Make sure you have these factors:

  1. Motivation: I have this problem and I need to solve it.

  2. Trigger: Other people have this problem and they need to solve it too.

  3. Ability: You have the ability to solve the problem.

Phase 3: The ideal problem:

  1. The problem is being experienced by 1M+ people

  2. It is growing at 20%/yr

  3. The problem needs to be addressed right now

  4. Big market

  5. Law change

The most important thing is not to look for a solution. Fall in love with the problem.

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