Ask HN: When generating ideas – what are the key tests you apply first? | Hacker News Reader

Ask HN: When generating ideas – what are the key tests you apply first?

13 pointsteapot0112 comments

I have a google doc which I keep all the hundreds of truly random ideas I get for startups etc. I'm trying to develop a quick method with as few points as possible to flesh out the idea and test for viability ie:

1. Revenue Model - how will it generate income 2. User base - who will use it, and Why? 3. Growth - how quickly will this grow? 4. Implementation - What do I need to do to implement this idea?

I'm looking for a discussion around what I should add (or remove) from the list.

View on HN

- What's the one thing that needs to happen for this project to succeed? If there is one key thing, that's good. If there are five or six key things, then you have a domino rally business, and that's bad: http://redeye.firstround.com/2006/09/domino_rally_bu.html

- What's the engine of growth? The best businesses basically start with the engine of growth and then work backwards to find a product. If the product doesn't have a built-in mechanism of virality, then you should be asking yourself how easy it will be to get leads, since that's the most important determinant of CAC. Again start by finding a great source of valuable leads, and then build the product to match.

- What are the assumptions, risks, and unknowns? Specifically in the areas of user engagement, growth, design, technology, and monetization. If this list is less than, say, three pages, then you're probably not engaging with the idea at a deep enough level yet to be capable of successfully executing.

- Is this a good idea for you? In the above section I'm assuming there isn't any significant founding team risk because you're doing a startup that's well-suited to your skillset; if not, it's not a good idea for you. Remember, everyone is capable of running a successful business, even if it's only a hotdog stand; the trick is finding an idea that's just at the edge of your current skillset.

- What are the key metrics I need to hit for a seed round, series A, series B, etc? And similarly, what are the key assumptions, risks, and unknowns that I need to figure out before each of those rounds?

- What skills would I need to acquire to successfully run this business? E.g. if it's a web startup you need to know how to code, if it's a biotech startup then you need to know biotech, etc. In order for the business to be viable you need to have the skills to do the hard part yourself, for whatever that means for the given idea. You can hire more people to help you do the hard part faster, but you can't hire them for something that you don't already (mostly) know how to do yourself.

This is a solid list.

Would you add or change anything if the goal wasn't necessarily an exit strategy but a lifestyle business?

(8 years as a developer if that affects your response)

I don't know enough about lifestyle businesses to give a good answer to that. But one difference is that you're not being judged by others based on your growth rate, which means you can afford to start the business while there are still certain skills you need to acquire. Whereas with a high growth business, you really don't want to go full time until you have the ability to hit your metrics like clockwork.

There's only one questions that matters:

Can I sell it?

Sort your list by how quickly you can honestly answer that question. By honestly I mean multiple people actually paying you, or at least attempting to do so. Ideally you can do this without even making a product. Throw up a landing page w/ a price and a buy button. When they click buy, you've got intent to purchase, and you can redirect to a signup for the beta. Even better is if you have a product where you can actually take their money and just do the work manually behind the scenes. If it takes off, then start coding/automating yourself out of the loop. If not, then kill it.

It's amazing how many "good" ideas just can't make any money. A lot of them you can't even give away for free :( That's your number one risk by far.

Would you argue that Google was never a start-up?

1a. How much work will the income require from me? 1b. Can the income scale easily in the distant future without rising expenditure? 5. Is it ethical? Will I get in trouble or hurt my chances of being employed? 6. Does it truly matter? Am I making the world a better place? 4a. Does this require a minimal amount of money? 4b. Can I do this without employees or renting a storefront? 7. How easy is this for someone else to copy? 7a. What is my long-term competitive advantage? 4c. How much of my time is this going to require? 8. Can I see myself doing this long-term? 4d. How much frustration am I willing to put myself through to get this thing going? 9. Would I have to physically experiment on myself?

I like to ask myself whether I would personally use this service/product if someone else released it? I started asking this after coming up with a number of ideas I thought were great only to eventually find a company already doing it and then realizing I didn't even want to be a customer. Now I only entertain ideas that I am positive I would pay to use if they existed. That way I can at least guarantee that I'm working on something I see the value in.

I have a similar list and try to pick from the top whenever I have time to devote to a new project.

I prioritize the list based solely on one factor: "How excited am I about this idea?". At the end of the day, if I'm not excited about it, I'll only finish part of it; I'll write a few lines of code then get bored and move on. If I'm really excited about it, I'll see it all the way through to the MVP phase.

Don't worry about anything besides;

1. What problem you are solving

2. How well are you solving that problem

3. How many people have the same problem

4. If 2 is "Excellent" and 3 is either a lot of people, or a few very rich, build that business.

My last suggestion, is select problems that you want to fix for yourself. Rather than a list of business ideas, I keep a list of problems I want to solve.

I agree with you about keeping a list of problems, and to most extents each idea has its root in a problem which I've encourtered somewhere.

That said if I'm solving a problem that a lot of people have but it's extremely complex to solve then to my mind it's not as good as an easier to implement idea with a smaller user base.

I think a lot of it is about what is your goal? build something cool, build a lifestyle business, build a growth non-tech business, start a fund-able business, etc? Do you have other people that might be interested in working with you on the idea?

Obviously there is a lot of specificity depending on your goal but what I'm looking for here is an early stage test. Is it worth developing this idea further or not? And more than that provide a prompt list to flesh out the idea.

This is largely aimed at tech businesses but to paraphrase I'd like to make it as general as possible but not more.

Reply on news.ycombinator.com