It is common for many aspiring entrepreneurs to be excited with a number of ideas or concepts, and they may genuinely believe in the potential for each one of these ideas to be successful.
However, eventually you will have to make a choice and decide to focus on only one of these ideas to build your startup around. Here are a few thoughts on how to make this rather tough decision. Of course, your decision will be a combination of various factors, and often will require revisiting the parameters that you used for your decision-making.
1) Personal passion is critical
Every startup will go through challenging times. If the startup is not in an area of your personal passion, you are less likely to fight your way through these tough times and are more likely to give up.
On the other hand, if the venture is in your area of personal passion and interest, even if the commercial success seems a distant away than you had originally planned, you probably would be driven enough to keep going.
However, the commercial potential of an idea can sometimes mislead you into believing that you are deeply interested in that domain. It is important therefore to evaluate what you are really, really, deeply and passionately interested in. Here’s how you can possible identify the areas of your interest. Leave the ideas aside, and think of what you would want to do in life if you had enough money and not have to work for a living. That will give you clues on what excites you the most an what your real areas of passion are.
2) Evaluate the business case for each idea
Unless you are considering doing a social impact venture, the point of doing a startup is to generate wealth. Thus, it is critical to evaluate the business case around each of your ideas and then take a view on what is likely to generate maximum wealth.
Consider factors like market potential, possibility of scale, what is required to scale – e.g. does the venture require proportionate scaling of resources & capital to scale or would it be possible to scale exponentially, what areas are most likely to receive VC investments, what domains are likely to see higher valuations, etc. i.e. consider all the factors and evaluate how much you would be worth n 10 years if each of these ideas were to succeed as you plan. You are most likely to get a different figure for each one of your ideas, based on the business case for these concepts.
3) Evaluate the external environment for each idea
Things like ‘how important is the problem or how real is the opportunity’ that this concept is addressing, which of these ideas have less competition, which of these concepts address an immediate need and which of these concepts will require hard-selling of the value proposition to potential customers/consumers.
Also, evaluate which of these ideas can be implemented from where you live and which of these concepts may require you to relocate. Then decide on the basis of your personal circumstances and preferences.
Also, while many of these ideas may have a large market in the country where you live, the KEY markets for some of these concept may NOT be the country of your residence. Evaluate if some concepts will require you at some stage to relocate. And then decide on the basis of your personal circumstances and preferences.
4) Which of these ideas have an opportunity for you to be a dominant player
What skill sets & competencies and other resources do you have that will give you a higher chance of success in the venture?
While the potential may exist in all categories, some sectors may not be ‘startup friendly’. Evaluate if the some of these concepts are likely to see competition from existing large brands. E.g. “Can Google do this?”.
5) Evaluate if you ‘like doing’ what the venture will require you to do
Example: You may be passionate about healthcare. However, creating and managing a chain of clinics requires you to be keen on & good in on-ground & distributed environment operations management, which is different from the operations management required for an ideas about an online medical records platform.
6) Evaluate the risks
While you play for the upside of a venture, also evaluate what the downside is. Some concepts, if they fail, will mean closure of the business. While some concepts, even if they do not become run away successes, may be sustainable as a smaller venture than you originally planned. Evaluate your risk appetite and evaluate which concepts are more aligned to your personal situation.
Finally, after you evaluate all these aspects, you probably should let your intuition lead the decision for which idea to go with.
I will be keen to know more parameters that people may have used to evaluate ideas. Will update this post as I get more responses.