How I Evaluate Business Ideas So I Can Make More and Work Less

What I’ve Learned After 7 Years as an Entrepreneur

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1. You Enjoy It

If I wanted simply to make money at the expense of enjoying how I made it, then I would have stayed in investment banking or management consulting for the rest of my life. When you enjoy something, you invest a more sustainable and higher level of energy and cognition into it, which ultimately increases your chances of a positive outcome.

2. You’re Good At it

Lots of entrepreneurs pursue ideas that they simply lack the requisite skill-set to make happen, and whilst they can learn as they go, by working on something that aligns with your existing skillset — coding, marketing, writing, sales — you are much more likely to succeed, and register early runs on the board — something that’s critical to sustaining motivation.

3. There’s an Engaged Niche Audience

If you’re building something for an audience that’s indifferent to what you’re doing — eg. there is flagging customer appetite — then you face an incredible uphill battle in trying to educate your audience of its merits. Far better to sell something that people are already interested in.

4. It Makes Enough Money / Serviceable Obtainable Market (SOM) is Sufficient

For me, it’s no longer about building a unicorn, or even about building a 9 or 8 figure company. Nowadays, it’s about building what is enough, and it turns out that a 7-figure business with a team of several engaged people is enough to satisfy my financial needs, freedom needs, and workplace enjoyment needs.

5. It Can be Highly Automated and Delegated

Translation: empowers me to work fewer than 20 hours a week, whilst still generating enough income.

6. Offers 50% Margins

By leveraging automation and outsourcing, you can create space for large margins. This can also be assisted by eliminating waste at your organization — eg. pointless meetings — and honing in on the 20 percent of everything that will give you 80 percent of the results (eg. best customers, best sales techniques, best marketing channels, best products, etc).

7. Large Lifetime Customer Value (LTV) / e.g. B2B customers

One of the most important ‘aha’ moments I’ve had on my entrepreneurial journey has been going from B2C (selling office space rental for about $100 a pop to individuals) to B2B (selling a startup accelerator to a large organization for $300,000).

8. Budget Exists

You want to sell things that either people and in particular, companies, have already set money aside for. If I’m selling employee wellness training to the Human Resources department at IBM, you can bet they will have a budget set aside for it that they need to spend.

9. Aligns With Your Existing Knowledge and Assets

Assets extend to social media followers, mailing list, web traffic, networks, skill-sets, domain expertise, technical and human resources, and so on.

10. You Believe In It

Marcus Aurelius once wrote that “nothing should be done without purpose”. When you truly believe in what you’re working on and feel that it is creating value for the world, it is much easier to keep getting up and going after it each morning without becoming pessimistic and throwing in the towel.

11. You Can Perform Targeted and Personalised Marketing at Scale

While this might be true for many target audiences nowadays, you want to be sure you can target specific audiences, otherwise, you will be at the mercy of expensive and ineffective above-the-line marketing efforts.

12. You Can Use Content to Build Your Funnel

This ties in with #9, #2, and #1 for me. As a writer, content is something I both enjoy doing and am somewhat good at.

13. It Can Be Tested, Built, and Modified Quickly

Having been in the game long enough, and worked with hundreds of entrepreneurs courtesy of our corporate startup accelerator programs, I’ve seen firsthand that a great idea and a great time usually isn’t enough. 95% of startups fail.

14. Your Share of the Market is Defensible

Whilst almost no opportunity can be defensible in perpetuity, and in today's market we always need to be ready to adapt, pursuing something that can generate an income for you for several years at least is a decent benchmark. Defensibility comes from a range of things, such as lock-in contracts, unique value proposition, switching costs, non-commodification, size of the competition, and so on.

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Founder: Collective Campus, Host: Future Squared, Author: Time Rich & Employee to Entrepreneur. Clubhouse: @steveglaveski Visit: #MELB

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