Analyzing a Business Idea, A Developer’s Perspective

As a tech guy, you will undoubtedly be pitched partnership opportunities in today’s startup crazed world. In agreeing to be the tech half of the venture, you will essentially be delegating the ‘business’ aspect to your partner which hopefully has domain knowledge in the problem you guys are trying to solve.

But how does one tell the difference between a genuine opportunity or a castle in the sky. This list of questions serve as my litmus test and roughly sums up my thought process, in no specific meaningful order:

People

  • What’s the nature of the relationship between the existing partners
    • Are there more than one business partners? What is the nature of their relationship?
  • Cultural fit for all partners
    • Do you like them? Do they like you? Don’t work with assholes.
  • How vested are the partners
    • Is he going to quit his full time job? He had better if you are.
  • Experience of the partners in the domain
    • Do they possess niche domain expertise that other people don’t have?
  • How trustworthy are the partners
  • Who will be doing what
  • Do they look like they are passionate in the problem they are trying to solve
    • Are they doing this for money?

Product (non tech)

  • What’s the unfair advantage
  • What is the product
  • What’s the problem being solved
  • How is the current problem being solved
  • What options are there at the moment
    • What’s the price of the product relative to the amount that’s being spent already
    • How much are they spending to solve the current problem

Execution

  • What will you be doing that is better or different from everyone else that is going to make the customers happy

Market

  • Competing products
  • Who would be the biggest competitor
    • Another startup or Google

Customers

  • Who are the buyers
    • List all the people involve in making the purchase decision
  • How many buyers are there (How big is the market)
  • How likely are they to adopt the product
  • Who are the early adopters
  • What’s the cost of adoption

Risks

  • How defensible is the product
    • What’s stopping new entrants from entering and wow to prevent them
  • What’s the main risk facing the business
    • If the business were to fail, what is the main reason, conversely, if the business were to succeed, what is the main reason
  • What’s the time to market
    • How fast can you get the product out there in front of customers

Revenue

  • How do you make money

Marketing

  • How will the product be market
    • What are the top 3 channels
  • How much spending is required
  • Who is going to manage the marketing
  • What’s the initial marketing plan
  • What’s the scalable marketing plan

Sales

  • What’s the sales cycle like
    • Is it going to take 1 year to sell the product or 1 week
  • Who is going to manage the sales process
  • What’s the initial sales plan
  • What’s the scalable sales plan

Costs

  • What are the main costs involved in the product

Product (tech)

  • How many hours does the MVP require
  • What are the complexities involved to get to MVP
  • Future complexities
  • What technical ability is needed to execute on the product
  • Is there synergy with existing code base of past/current projects

External

  • Is the product recession proof
  • Exit options
  • What other opportunities will you be passing up to undertake this venture

Growth

  • Is there potential to grow other products in adjacent spaces
    • How big are these spaces
  • Is there scope for personal growth
    • Will you be learning something cool along the way

Interest

  • Is the problem you’re solving meaningful

Compensation

  • What are the terms being offered
  • What’s the funding arrangement
  • Who’s paying for what

Milestones

  • Are there any important deadlines
  • What do you want to achieved in 3, 6, 12 months time
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