How to Assess Your Startup Idea

You’ve come up with a startup idea and learned how to write your buyer persons . The next important question is how to assess your startup idea.

Would it bring you the expected results and profits? So how do you test that? Assessing your startup idea is a 2-step process: evaluate your competition and evaluate your market. 

Let’s go through these steps:

Step 1: Evaluate Your Competition

Evaluate the competition

Many entrepreneurs don’t want to Google their competition to avoid being discouraged. But then you can benefit by doing that. So, whenever you have an idea, look it up online and check it for the market competition. There are several cases:

CASE 1: You don’t seem to have any direct competition.

This may be due to two reasons:

  1. There is no market, and you better let go of your idea as nobody is going to demand your offerings. 
  2. You’re onto something extremely innovative. But you will need a lot of resources and time to create a completely new market all by yourself. 

CASE 2: You have some competition.

Two outcomes are here as well:

  1. Startups are starting to explore this field, which means that it’s a great time to launch yourself into it. 
  2. There are already one or more unicorns that received some significant funding and have a great advantage over the others. In this case, you better let it go if you can’t match their resources. Alternatively, you can address other market niches that these startups haven’t reached yet. 

CASE 3: You Google your idea and find a lot of other competitors working in that same space.

In this case, you have two options as well:

  1. You realize that you will need a lot of resources to get a small market share. As a result, you might even consider letting go of your idea.
  2. You have an innovative idea that helps you to stand out and disrupt this overcrowded market. This is actually very common today and can be extremely rewarding. 

So, do your Google research to evaluate your competitive landscape and to see in which situation you are among those that we just talked about.

Step 2: Evaluate Your Market

Evaluate the market

We’ll learn how to estimate your market in the industry you want to operate in this part. 

  1. The first case is when you’re in a new market with a known product. Then it’s easiest to estimate the market.
  2. Another case is when you are in a new market . You innovate somehow on your product, but the market is a bit more difficult to estimate. 
  3. Finally, one situation is where you have a completely innovative product for which there is no known market yet . In this case, it’s extremely difficult to estimate the market. 

What if my product is so innovative that it doesn’t have a known market that I can evaluate? Well, this is the most uncertain case. Generally, what’s important here is to use as many different proxies as possible. Gather and analyze data from other countries or from substitute products. 

This will help you fully evaluate your idea and decide if you continue working on it, if you change it, or if you are looking for another one. And you can use market studies, country reports, competitors, data substitution products, and various proxies for this.

Remember that the goal is not to get it precisely because there is no way you can do it but to evaluate the potential for your idea. This is also directly related to your ambition. The bigger it is, the bigger market you will need to fulfill it.  Now it’s your turn. First, gather some information about your competitors and your market and iterate on your product according to it.