10 Step Checklist To Rank Your Startup Ideas

A version of this article first appeared in Forbes.

Steven Johnson, author of How We Got To Now, analyzes technological breakthroughs, looking for patterns that allow entrepreneurs to identify “How We’ll Get To Tomorrow.” One of the key myths that he destroys is that of the lone inventor who experiences a Eureka moment.

Slow Hunches Lead To Breakthroughs

As Mr. Johnson points out, big ideas generally result from the collision of many small hunches. In isolation, a particular hunch may be worthless, but when combined with other ideas, at the right time, the result can be a game-changing innovation.

We all have hunches, but if we do not diligently document them, we risk losing them. Hunches cannot be combined if they are forgotten. In the 17th & 18th centuries, deep thinkers such as: Milton, Bacon, Locke, Franklin and Darwin jotted down their ideas in Commonplace Books that they maintained throughout their lives. Modern-day entrepreneurs use Evernote, Google Keep, etc. to capture and organize their hunches.

You’re As Smart As Your Network

Seth Epstein, former Founder and CEO of FUEL (acquired by Razorfish) and Emmy Award winner for his work on the X-Games, graciously spoke at UC Santa Barbara’s Innovator Stories Series. His talk was especially intriguing, as he attended UCSB, but dropped out to start a clothing design company.

During his talk, Seth described the practical, hands-on methodology that he uses on a day-to-day basis to identify and vet his entrepreneurial ideas.

Chaos By Design 

Seth is a design-oriented entrepreneur, with little desire to document details. Even though he is not process oriented, he has developed a simple, yet methodical approach to identifying, cataloging and vetting his entrepreneurial ideas.

Seth notes that, “Ideas are a lot like exercising. The more you play around with ideas and you write them down, the better. The quality of your ideas is actually going to improve.”

(Passion + Solvable Problem) * Sufficient Reward = Great Venture

Per Seth, emerging entrepreneurs should, “Find problems that need solving… that resonate (with you). Find problems in the area you are passionate about. Just do stuff that you love to do because the problems will come find you… if you are entrepreneurial.” 

This process also helps Seth avoid distracting himself from the core idea he is currently executing while still capturing the idea. According to Seth, “This is how I evaluate an idea. This is a lead up into an executive summary. When I get an idea, because I get so many ideas and I don’t want to act on them or distract myself, I have this form that I fill out. I sit down and I answer these questions. I literally just do it on my computer, really quick.”

Ten Step Idea Evaluation Worksheet 

Seth reduces the overhead associated with his idea creation process by quickly completing the following worksheet.

  1. The Idea – brief description
  2. Problem Solved – what is broken that the idea fixes?
  3. Who Has This Problem? – market size, characteristics, just me?
  4. How Resolved? – is the resolution economical, practical, technologically feasible?
  5. Business Model – how can I make money solving this problem for the identified audience? How much money can I make?
  6. Competition – which competitors will prove to be the most formidable? What potential competitors might arise – can they be converted to partners? NOTE: competitors validate your idea, if you lose heart after one Google search, you are not sufficiently passionate about the idea.
  7. Differentiationwhat color are my elephant’s sunglasses, how I will beat the competition? To what extent are the points of differentiation sustainable?
  8. Challenges – what potential pitfalls that could cause the idea to fail?
  9. Resources – what contacts, capital, facilities and other assets will be required to execute the idea?
  10. Fit – do I have the appropriate skills and passion to successfully execute this idea?

Modify this checklist to suit your personal style and the specific nature of your ideas. The key is to document and challenge the veracity of your ideas at the time they occur to you. The format you settle upon is of little consequence, as long as it allows you to quickly and contemporaneously capture the essence of your slow-mo epiphanies.

Documenting ideas in real time is an effective, disciplined approach to sorting great ideas from lame ones. The worksheets also serve as library which you can build upon and interchange ideas. In many cases, an aspect of a particular opportunity will have unforeseen applicability to a subsequent venture. You eliminate the risk of “misplacing” such insights when you take the time to document them at the time of their birth.

Seth’s process allows him to capture ideas, and only spend more time refining those that become an earbug, as described in Your Startup Idea Must Be All Consuming. As he notes in his talk, when an idea continues to recur to him over a period of time, then he knows it has validity and is something about which he is passionate. “The reason I do it, is because, if a few months later, the idea comes back to itch me, I’m like, ‘Maybe I should pay attention to that.’ It is a good way to storehouse ideas and also it is a good way to exercise your brain.”

Filling out an idea worksheet is like hitting the gym. Each workout may seem inconsequential and you may be tempted to skip it, “just this once.” However, the cumulative effect of formally identifying and vetting entrepreneurial ideas is akin to a consistent workout regime. The results will take longer than you would like, but eventually you will be packing on entrepreneurial muscle that will help you uncover and validate great ideas, one of which might prove to be the basis of your next venture.

You can follow John on Twitter: @johngreathouse

Image credit: Flickr VBC17

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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