The Insightful Optimist - Nº7



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April 1 · Issue #7 · View online
The Insightful Optimist
Evaluating your startup ideas
Let’s face it, everyone has ideas. And most think that their idea is the one. And while that may be true in some cases, I think it is best to first evaluate your startup idea before jumping into it and wasting time and money. So, how do you evaluate a startup idea?
First of all I want to make a quick distinction: there are startup ideas and business ideas. In the most simplest way:
A startup idea = quick and exponential growth
A business idea = usually starts off as a small business that grows slowly over time into a bigger company
I am only covering startup ideas here.
So a really good place to start is asking this question: how can I predict if an investor will like my idea and put money in it? This is not to say you need an investor, I was always a proponent of have a customer before you build anything. However, even if you don’t need the money and will be bootstrapping, that’s still a good way of looking at it as an investor would be looking wether you have a good business and monetisation model and customers ready to pay for your product.
So the formula is quite simple, investors essentially look at 3 things:
What’s the Problem –> What’s your Solution –> What’s your Insight
The Problem has to ideally have at least one or more of these characteristics: popular, growing, urgent, expensive to solve, mandatory, frequent. In my opinion, the most important one is frequency, purely because if the problem is frequent, you get more chances to convert your customers as they are more like to try again until the problem is solved.
Solution is pretty self-explanatory, how does your product or service solve that problem. However, there is an important thing I want to point out: don’t start with a solution. Some founders tend to start something because they want to use the technology, something new, trendy and shiny. React Native or Blockchain could be good examples of that. They first want to use this technology no matter what, and then try and find a problem to solve. Not saying this is not going to work, it could, and it has, but it’s not the most efficient way of doing it in my book.
Insight: WHY is it going to work? Why are you going to grow the fastest? What is your unfair advantage?
Examples of what unfair advantage could be:
  • Founders - are you a super expert in the problem you’re solving? (spoiler alert: most 99% of them aren’t)
  • Market - is it rapidly growing on its own? Is it following a trend? (e.g. there are a lot of crap crypto/blockchain projects that are growing rapidly at the moment solely based on this. However, this is the weakest advantage of all)
  • Product - this is pretty straight forward. Is your product 10x better than the competition? Not 2x. Not 5x. That would be meh, that’s not quick growth, that’s not what an investor would get excited about. 10x is where it’s at.
  • Customer acquisition - being able to grow your userbase without paying for it. If you attract your users/customers mostly through paid advertising etc. and that’s the only way you get proper traction, then usually when the big players see that, they will get you out of business quickly by replicating your idea/product. Your focus has to be on creating network effects and organic word of mouth. So, ask yourself do I have an unfair advantage that is free?
  • Monopoly - do you get stronger as you grow? Can you become the go-to place for that one thing by naturally growing and building your audience and offering? This is usually your marketplaces like Amazon, AirBNB.
And that’s pretty much it. If you’re super honest with yourself and fit the above criteria, then you’ve got a much bigger chance of succeeding than most because unfortunately, not many founders go through this.
Luckily you read this newsletter though, huh 😉
Never stop learning
Having a fresh new baby growing up quickly in front of my eyes definitely brings a new perspective to life. One of the things that really got highlighted seeing him learning something new on a daily basis and what I’ve realised that we somehow have this notion that we ‘grow up’ and then we’ve learned what’s needed to be learned because we can function well enough in society. So we stop.
We move from being learners to being knowers. - Matthew D. Lieberman Ph.D.
We learn to talk a language and stop. We learn to walk and stop. We learn to write and we stop. Get it?
So what I’ve decided to do is as my baby is learning, I will be learning alongside with him…in a way. Here’s how that looks:
  • Baby is learning to walk –> I am learning to stand on my arms
  • Baby is learning to talk –> I am learning to speak German, Russian and Spanish
  • Baby is learning to eat on his own –> I am learning to eat with my left hand (non-dominant)
  • Baby gets fascinated by the smallest things –> I am learning to do the same and bring more appreciation to the smallest things in life that I have grown accustomed to being around (e.g. having a car, a home, a laptop, a phone, high-quality food, etc.)
Learning the head-stand
Learning the head-stand
It’s been actually quite challenging, but at the same time exhilirating to experience new feelings, emotions and brain connections and also realising how much more basic things there are to learn!
So reply to this email, what basic thing would you want or are already learning?!
Player fans vs Team fans
So I might sound like an old man here, but I was always a proponent of being a ‘Team fan’. This creates an attachment to the city, the culture, the common togetherness supporting a team. I love it.
Slovenian fanbase
Slovenian fanbase
However, nowadays the new generation of young fans grew up following personal brands and learned basketball from 5-10min highlights, so naturally they will become a ‘LeBron fan’ or a ‘Kyrie fan’. They will cheer on any team that their favourite player is on and will have 5 different team’s jerseys in their locker as the players change teams like socks in todays NBA.
What happens is that there’s no more pride in saying ‘Celtics fans are the best’ or ‘Lakers fans are the loudest’ etc. The passion kind of goes away.
Thing is: players come and go, that’s just how it is, but sticking with the team as they go through ups and downs, make mistakes and game-changing moves, win titles and have rough years, it’s like a relationship and the longer you’re committed and involved, the more love is built.
Having said that, the most important thing is simply having fans and them enjoying the sport regardless of what kind of fan you are. This segment was inspired by seeing NBA games without fans this season and at the end of the day, fans make half of the sport if not more. Basketball is perfomance, entertainment, an act, and without passionate viewers who appreciate the craft, it loses it’s beauty. And I will say it, basketball overall, not just NBA, in my opinion, has one of the best fanbases in the world!
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