How to Evaluate Startup Ideas - Kevin Hale

Source : Kevin Hale - How to Evaluate Startup Ideas, 2019.07.26, https://www.youtube.com/watch?v=Uhw1C6yFoJI

Finding a Good Problem

Criteria	Description	Ideal Set
Popular	Lots of ppl affected	Over 1 million users
Growing	More ppl will have that problem in near future	Market growing 20% per year
Urgent	Need to be solved quickly	Need to solve right now
Expensive	Costly to solve right now	Costs billions to solve right now
Mandatory	Problem that NEEDS to be solved	New laws or policies made
Frequent	Ppl suffer from problem frequently	Ppl face the problem multiple times a day

• If your company is not growing or the investors are not interested, it is because there are things missing out of these

• Behaviour = Motivation to solve a problem + your Ability to make a solution + Trigger to use your solution

• People do not regularly acknowledge the problem, so you need to remind them the problem over and over again

Creating a Good Solution

• Do not start with the solution
  • If you start with the solution, you need to appeal to the consumers that they have a problem.
  • If you start with the problem which the consumers already have acknowledged at least once, it is then easier to capture their attention.

Insight (Compared with YC and Woofoo)

• Why is it your solution that will grow?
• You MUST HAVE an unfair advantage compared to other competitors related to growth, such as;
  • Founder : top 10% expert that can solve the problem

    ex. biotech expert with some sort of an award, but not many ppl actually qualify

  • Market : fast growing market
    • But needs sth more than just this.
    • If the market is stagnant or shrinking, no investment.
  • Product : ten times better than that of competitors
    • Ppl should be crazy about it.
  • Acquisition : Acquisition path should cost $0

    ex. Word of Mouth

    • The value of paid marketing diminishes as market matures.
    • It is great when you do not have money so that you can think of how to promote without creating any financial cost.
  • Monopoly : stronger as time goes and market grows

    ex.
    marketplace : winner takes all
    network effect : as market grows, more users acquired