December 29, 2019
If ideas were literally a dime a dozen, most of us would have a decent chunk of change (assuming quality was unimportant). But how do you decide what to pursue, and what to backburner? I’ve done this calculus a bunch of times over my working life and have had the good fortune of having a few of my ideas bear out; at least enough to avoid getting a “real” job. Here’s the set of criteria I’ve had success with, roughly in order of importance:
This is very common wisdom at this point, but I find it substantive for two reasons:
You are user #1, and empathizing with the user is key to building a successful product. So building something you’ll use first and foremost is important. Plus, having full confidence that you’ll enjoy using the thing you’re building, even if others don’t, is a great sign you’re on to something.
Solving your own problem provides motivation and conviction to keep going when other markers aren’t there. Often the most difficult part in building out an idea is in knowing when to quit or double down. If you’re very early, this may simply be left up to your instincts. And it’s hard to trust instincts if you’re trying to guess what others will think of what you’re building.
Also implicit here is that a suitable solution doesn’t already exist. If it did, the itch would’ve been scratched already (provided you’ve done your research).
Life is short. No one wants to spend time on projects that aren’t going anywhere. Preserving time and capital are the two most important things you can do get the number of at bats you need to find something that works. So the costs of testing a hypothesis needs to be weighed against one’s conviction about the idea and the size of the opportunity.
While this is a personal decision, there are certain principles that should apply nearly all the time, in my opinion. For example, if you believe you need to spend meaningful marketing dollars to get initial adoption, the idea is likely not worth pursuing (or it’s being thought about incorrectly).
This isn’t a necessity, but it’s worked time and again for me. And it flows from the first criterion in this list. Deep frustration with a problem likely implies a familiarity with the topic at hand and, for me, a big chunk of familiarity comes from finding a community around the topic.
Polling a community to validate the problem before you start building, to test and provide feedback on your MVP, and then to act as early adopters is truly invaluable to a fledgling side project or company. And it’s as simple as finding a Facebook Group or Reddit subreddit filled with your target users/customers.
Don’t get me wrong, taking alternate paths to market can work well if they’re clear (for example, if a project is clearly an SEO play or arbitraging existing systems). That’s completely valid. But nothing beats a community, of which you’re a part, that is super-psyched you’re building the thing you’re building.
I started my first company at 15 when I had approximately zero dollars to my name, and, for better or worse, the bootstrapper’s mentality has more or less stuck with me. I don’t want to spend a bunch of money validating an idea, because typically that means it’s not a particularly good idea, and “build first, monetize later” is dangerous for a sole founder with limited time and budget.
Again, there are obvious exceptions to this rule (all the social media IPOs over the last decade proved it), but for the average builder looking to find a fun and profitable project or create long-term valuable company, it’s just so much easier if you know how you’re going to make money before you start.
There is a very real “trap” that exists that doesn’t get talked about enough. Let’s call it “the middling success trap”, just because it’s so catchy. What if your project becomes profitable, but requires your full time and attention without strong ROI? Are you willing to sacrifice opportunity cost out of passion for the idea? If not, are you willing to shut down a project that’s making money? As time goes on, the choice becomes increasingly difficult.
This question exists only for those looking to raise venture capital and, in general, it’ll get answered for you. VCs deal in asymmetrical outcomes. It’s generally in their best interest for you to build a billion dollar company or to lose their money trying, due to opportunity cost.
VCs with sizable funds won’t invest unless they believe you have the ability to return their fund several times over, but you need to make sure you believe, too. Otherwise even if they bite–or perhaps especially if they bite–you’re setting yourself up for a very bad time.