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What filters to you use in evaluating potential business ideas for yourself?

I'm evaluating a number of ideas (some my own and some from others) as I think about a next company to start. I'm wondering what filters people on here have used when thinking about starting a new business. For example, must it have the potential to be a billion-dollar business? Must it need to potential to go global?

A serial founder I recently spoke with shared one filter he uses that I think is fantastic: would I enjoy dealing with the customers this business would bring every day? Would love to hear other filters you've all used!

10 Replies

Paul Bostwick
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Paul Bostwick Entrepreneur
Researcher and Self-Employed Product Designer
Hey Ray, Good job adding that new one you just learned it is such a good practice to make sure you are giving when you are asking. I would, give the challenge of finding others to jump on board an "idea not their own" give preference to ideas that somebody else is keen on, in a domain with many customers. That way you have a jazzed person (or persons) working with you even as the idea evolves, in an area surrounded by customers.
Patrick Cohen
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Patrick Cohen Entrepreneur
Strategy & Business Development Manager - Racing, AVL
Hi Ray, I recommend a book called "The new business road test" by John Mullins. It introduces a "seven domains" framework which you can apply to any new business idea. The domains of the framework extend to micro and macro market and industry analysis as well as to the talents and interests of the founding team. It should help you organize your thoughts and feelings and evaluate the various ideas you are contemplating. In case you don't want to buy the book right away, I know for a fact that there are some pdf versions floating around on the web... Hope that helps, Patrick
Thomas Jay
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Thomas Jay Entrepreneur
iOS / Server Architect / IoT / BLE / iBeacon / Apple Pay
Its simple, PASSION. If its not something that excites you then how can you have the passion needed to make it happen.

You will need to sell others on this, get them excited and have them follow you, as the leader you need to be high when others are low, every day passion for the idea is key for me.

I hear about tons of ideas every month, few are interesting to me, even less excite me, of those most have no business case.

Always do a reality check with someone else, if you can sell someone on the idea as well then maybe it makes sense.
Paul Travis
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Paul Travis Entrepreneur
Multifaceted Online Executor: Product Marketing to Program Mgmt. to Business Development
Only you know ifbillion-dollar or globalare the right filters for you, given where you are in life, Ray.

One of mine is to pay the I.R.S. a million dollars, but I think that'll come from what Thomas says (something I'm passionate about). Hope to circle back on this thread in a few years with a success report :)
Rob Gropper
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Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
1. is it something i can be passionate about? for me this often translates to "can this idea (executed well) make a positive impact on the world?" i.e. socially and/or environmentally responsible?
2. logical business model; i.e. is there a clear path to monetization / profit?: This is closely coupled to "can i sell it?" which is closely coupled to "is there existing demand?".
2.5. who's the buyer? I much prefer selling to larger business customers. Consumer models are less interesting.

These two filter out 9+ out 10 for me. #1 is easy and pretty binary - it's either interesting or it's not. Although the project i'm currently working on didn't really excite me at first glance, watching others get so excited about it really made an impact on me and i'm hooked! If the idea survives these two i bake it for a while, do some market research and competitive analysis to get a feel for market size and competition and potential demand. I then go talk to a few people i trust to give me straight feedback. If the idea still floats i start pitching to people whom i think are prospective customers. if they get truly excited about the idea (i.e. they are making suggestions and asking questions and are clearly interested) then i start to iterate on the above process. Part of the iteration process for me is to boil up a list of reasons why the idea won't fly.

I'm a recovering engineer and a sales guy. I love technology and solving interesting problems with technology and i hear tech startup ideas all the time. if it is not clear that demand exists then it's just not interesting. Creating demand is very hard and takes a lot of time, money and effort. If i can't quickly see a clear path to sales (that satisfy demand) then it's just not interesting.

The potential for a $ billion market cap isn't an early filter for me, but it becomes a filter if it is clear i will need significant outside investment capital to get to initial traction. These days the ideas/models that i can get to traction (paying customers) without significant outside capital are the ones that win. Raising money takes time and i'd rather spend my time getting customers than raising money. Global potential isn't a filter at all. I suppose if i was really passionate about the idea and the business model required significant capital and the US market just wasn't big enough then i suppose global would be important, but if the US market isn't big enough it likely doesn't pass filter #2 anyway.
Amu Fowler
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Amu Fowler Entrepreneur
Founding Director at Startups Ignite
This is an very interesting topic for me as one of the ideas I am "filtering" through is actually related to ideas & it's viability.

In general I have many many ideas so my primary filters for an idea are:
  1. Does it involve my passions? (Tech & Entrepreneurs)
  2. Will the world be better for it (I live in the world)
  3. Can I see a clear path for monetization (this one is usually trickiest)
  4. Is it a unique idea (Most ideas are implemented one way or another..)
  5. Are my resources and network adequate? (I am working on this one too ha!)
Scott McIntyre
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Scott McIntyre Entrepreneur • Advisor
Director@University of Toledo; Chief Architect@Commonwealth; President@CfPA.org; Chair@Phabriq Development
Only work with people you love. Life is to short to dread every day seeing the people that occupy most of your waking life.

Oh, and this one, "
"What you are afraid to do is a clear indicator of the next thing you need to do."
An Unknown Author
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0
X
Entrepreneur

You are spot on to select an idea where you will enjoy the time you will pour into it. The people we spend time with are key to our enjoyment of that time, and it is a great insight to feature the customers as well as cofounders prominently in that equation.

That's how I decided to work on my current idea, Carbyr (http://carbyr.com). I really enjoy cars and car people, so... doing early market research & bizdev at Monterey car week last summer was not exactly a tough slog :).

Best of luck in your decision process. And if car people are your people too, feel free to drop me a line :).

-- Glenn

Jeremy Foster
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Jeremy Foster Entrepreneur
Director Marketing at Ericsson

Who's going to buy from us?

Why are they going to buy from us?

Generic I know, but as we try and solve a customers problem in return for money we need to know that the problem we're solving is definable by the customer and valued by the customer at a pointhigher than what we're going to charge them to solve it.

Of course life gets more complicated after that, but as a starting point and a somewhat regular check in, I thnk these are helpful to keep us grounded.

Good luck! Jeremy

Deborah Tutnauer, MEd, MSW
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Business & Entrepreneurs Solutions. I help people increase their income and happiness. Authentic Foundation & Framework.
Great exploration Ray.

As I prepare to be the Kick-Off speaker at a University of Entrepreneurship 3 day event in March, I have been pondering and writing about this exact topic. It's funny to say, but sometimes (maybe often) entrepreneurship and business creation is not about developing the next billion dollar company, or even about money as the first and foremost reason for moving forward.

It appears just from looking at your question and profile, that you have been financially successful and are now exploring ideas from other perspectives. I love the list that Amu laid out above. I often have this conversation with people ready to leave corporate America and step out into their Entrepreneurial Journey.

Three crucial questions to ask yourself:
What do I love?
What do I value?
What am I good at?

I don't think being a billion dollar company or having global reach are necessary filters unless those things are high goals for you personally.

When you take time to understand the why behind your work, it will become easy to figure out the filters that are appropriate for your own values and decisions.
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