Five Ways to Evaluate New Ideas

March 6, 2012

1:41 pm

It took six years for the novelty of building stuff to wear off. I’ve worked on huge failing corporate projects, cool weekend hacks, and successful startups. At a certain point, you’ve proven to yourself that you can build it. Now, what you’re building matters. So how do you become selective about the products you work on? Here are my top five ways to evaluate your ideas.

1. Real Problems

I have some friends from the management consulting world. You’ve probably sat next to one on a plane. They have IBM ThinkPads and crunch Excel workbooks for a project that is invariably behind and over budget. They travel a lot. They’re paid well. And, it seems that all of them want to start something. Bright-eyed and bushy-tailed, they ogle Facebook, Twitter, FourSquare, Pinterest, Path – whatever’s hot and on the first page of TechCrunch. They’ll attend a StartupWeekend wearing the obligatory “idea guy”-colored T-shirt and pitch their idea: “I want to build a disruptive, mobile, social goal setting app.” Puke.

Wake up and smell the dehydrated single-serving crap you call coffee! If you’re serious about building something, tackle a real fucking problem. Delve into your vast reservoir of corporate experience and drum up every complaint, grievance, and suggestion you can remember. Bribe HR for access to the comment box if you have to! Those are problems people deal with every day. They pay money for solutions. Real problems are well-defined; they are a constraint you need to build a good solution.

2. Elegance

“Good design is as little design as possible.”  – Dieter RamsBraun

Real problems often have complex solutions, but complexity isn’t something to be afraid of. Almost any time I’ve tried to explain how the web works, I’m stunned that it works at all. Sometimes to get this to go over there in that much time involves some wizardry. Don’t sweat it.

But at 30,000 feet, an idea should be elegant. Twilio: wrap up all the madness involved in sending texts and making calls behind a developer-friendly API. Heroku: make deploying a standard Rails app as simple as checking in your code. Uber: hail and pay for a black-car service from your phone. In mechanics, it’s possible to determine the motion of two bodies but the three-body problem cannot be solved. Reduce the number of variables and keep your product ridiculously simple and straightforward upfront

3. Dough From Day One

 “You have customers, they pay you money… you get profit!” – David Heinemeier Hanson, 37Signals, at Startup School in 2008.

If you haven’t thought about how your product will make money, your days are numbered. If “targeted advertising” or “freemium” are your biggest potential revenue streams, go back to the drawing board. It’s not that it can’t be done, but to succeed you need massive adoption and engagement. Easier said than done. The glitz and glamor of bootstrapping wears off fast. When it does, have real money coming in the door.

What about raising capital? Without a jaw-dropping team or massive traction, you’re too early for most investors you’d actually want to take money from. Accelerators don’t present much more favorably odds either. Over 1,500 folks applied to the last round of TechStars in New York. They accepted 15. We haven’t even factored in YCombinator or all the other teams that didn’t apply. Even though a ton of capital is being dumped into startups, you and your idea are up against a shit load of competition. If you have to draw a line that goes up and to the right, make it revenue.

4. Scratch Your Own Itch

Leverage yourself by solving a problem you have. When you really understand a domain you can spend more time building and less time gathering requirements. “When it’s all in [your] brain, it’s a perfect feedback loop,” says Jason Seats, co-founder of SliceHost. If you don’t use your own product, you’re completely reliant on feedback. “You have to construct artificial ways to get information.” You’re likely flying blind or moving too slowly.

5. Unfair Advantage

The expression “life isn’t fair,” isn’t totally accurate. Life is only unfair if you’ve got the short end of the stick. When I was at DreamIt Ventures in 2010, Josh Kopleman of First Round Capital gave us some tips on being better entrepreneurs. This was one of them: If you’re working on a big opportunity, so are others. Why you and not them? It may be someone you know, a patent you filed, or an exclusive contract you signed. You may simply have a killer team that can get shit done. Know your unfair advantages and take full advantage of them.

That’s it! These are the five rules I screen all new ideas with:

  • Pick real fucking problems
  • Find an elegant solution
  • Make dough from day one
  • Scratch your own itch
  • Take advantage of being advantaged

As my good friend Michael Dwan, co-founder of SnapJoy, once told me, “Ideas are like the bus… you miss one, there’s another right behind it.” Don’t take it personally if your idea doesn’t make the cut. You’ll make it to your destination faster by being selective about how you get there.

Editor’s Note: Guest author Avand Amiri is the co-founder of Sqoot, a daily deal API that helps publishers monetize. He’s lesser known for half a dozen fledging startups, including and Zippr. Avand’s a Ruby junkie, hopeless romantic, four-time TechStars rejectee, and recovering corporateer.

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