How to Evaluate Your Startup Idea

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Before your idea can grow into a startup, it has to pass a few sniff tests. Is there a demand for what you’re creating? What resources will you need to make your idea come to life? Boundless co-founder and CTO Aaron White will be on hand to give you all the info you need to make your idea ready for the rigors of startup life.

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How to Evaluate Your Startup Idea

  1. 1. Evaluating Your Idea you do vet them don’t you??
  2. 2. Demand First ExperienceConstruction Value Capture Distribution Positioning
  3. 3. Demand First ExperienceConstruction Risks Value Capture Distribution Positioning
  4. 4. Common MistakesI’ve made all of these once, twice, three, four times...
  5. 5. Mistake #1People want it
  6. 6. Mistake #2Lots of people want it
  7. 7. Mistake #3It’s easy to explain
  8. 8. Mistake #4I built it, they will come
  9. 9. Mistake #5It’s obvious how to use it
  10. 10. Mistake #6They’ll remember to use it
  11. 11. Oh god, I’m doomed. well, not quite..
  12. 12. As with most things,start w/ a framework! Just so happens I’ve got a few for you!
  13. 13. #1 Business Hypothesis Specify your dream
  14. 14. Day Month Year No.Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model? How costly are they? What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments Our Distribution Channels? Customer Relationships? want to be reached? Revenue Streams? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines?What are the most important costs inherent in our business model? For what value are our customers really willing to pay?Which Key Resources are most expensive? For what do they currently pay?Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
  15. 15. #2 Enumerate RisksWhat should you be worried about... in order!
  16. 16. Validation Board Project Name: Team Leader Name: Solas Bar 232 E. 9th Street Track Pivots Start 1st Pivot 2nd Pivot 3rd Pivot 4th Pivot Tip: For two-sided markets, Customer always validate the riskier side first Hypothesis Remember: Problem Limit one sticky-note per box Write in ALL CAPS Hypothesis Do not write more than 5 words on any sticky-note Solution Tip: Do NOT define a solution until you’ve validated the problem Hypothesis Design Experiment Track Pivots Riskiest Results Invalidated If Invalidated, pivot at least one Core Hypothesis Validated If Validated, brainstorm and test the next Riskiet Assumption Tip: Clear all post-its from this area after each experiment is completed Assumption 1 2 1 2 Only put the Riskiest Assumption from an GET experiment in these boxes Which Core Assumption has the Record data & OUT highest level of uncertainty? learnings separately Method 3 4 3 4 Core Assumptions Any assumption that, if invalidated, will break the business OF THE What is the lowest cost way to test the Riskiest Assumption? Choose: Exploration, BLDG Pitch, or Concierge Minimum 5 6 5 6 Success Criterion What is the weakest outcome we will accept as validation?www.ValidationBoard.com © 2012 Lean Startup Machine. You are free to use it and earn money with it as an entrepreneur, consultant, or executive, as long as you are not a software company (the latter need to license it from us). This work is licensed under a Creative Commons Attribution 3.0 Unported License.
  17. 17. Typically, worry and build outside-inWhere will What ad will What valuepeople find pique their do I need to me? interest? sell them on? Can they get Do I maintain Have I earned that value fast a good their dollar? as possible? relationship?
  18. 18. ResourcesBusiness Canvas Plan: www.businessmodelgeneration.com Lean Validation Board: www.validationboard.com Reading List Lean Startups by Eric Ries 4 Steps to the Epiphany by Steve Blank

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