Not a bad heuristic tool and set of questions. I think the 3rd step Economic questions are the most difficult for new founders and where people get tripped up:
Are your costs viable?...What is the effort for a user to switch to the product?...Is it easy for a competitor to copy the startup’s ideas?...How might user adoption grow?...etc.
Potential founders see some startups bootstrapping costs very early and see other startups unprofitably burning dosh for years and years even past their IPO (eg hello Twitter, with Snapchat about to join them).
Competitor risk analysis can be paralyzing for a new founder who reads the news. Google, Facebook and Amazon et al. can essentially build anything they want. While copycat startups can pop up overnight. Sure the big guys might buy you, but they might also build themselves or acquire one of these competitor startups that started after you. 1st means nothing anymore. Even the example doesn't really overcome Google as a competitor. Competitor risk can be very subjective and VC forecasts are not much better than founders here - this is the easiest area to disagree on and get pushback on.
Honestly these 1-page biz planning tools are fine for college kids learning about startups. Or for VCs keeping their public profile active. But before VCs give a founder real money I think most VCs do a set of "common sense tests". This is what this is, a version of a common sense test for a founder. If you're overly optimistic as a founder while not having thought out potential future scenarios Plan A thru Plan C that would fail a common sense test.
Seems like the stronger your idea, your I.P. or your team's technical skills, the less common sense needed, you are worth mentoring even though you don't get it yet. Still do a common sense check regularly...
Are your costs viable?...What is the effort for a user to switch to the product?...Is it easy for a competitor to copy the startup’s ideas?...How might user adoption grow?...etc.
Potential founders see some startups bootstrapping costs very early and see other startups unprofitably burning dosh for years and years even past their IPO (eg hello Twitter, with Snapchat about to join them).
Competitor risk analysis can be paralyzing for a new founder who reads the news. Google, Facebook and Amazon et al. can essentially build anything they want. While copycat startups can pop up overnight. Sure the big guys might buy you, but they might also build themselves or acquire one of these competitor startups that started after you. 1st means nothing anymore. Even the example doesn't really overcome Google as a competitor. Competitor risk can be very subjective and VC forecasts are not much better than founders here - this is the easiest area to disagree on and get pushback on.
Honestly these 1-page biz planning tools are fine for college kids learning about startups. Or for VCs keeping their public profile active. But before VCs give a founder real money I think most VCs do a set of "common sense tests". This is what this is, a version of a common sense test for a founder. If you're overly optimistic as a founder while not having thought out potential future scenarios Plan A thru Plan C that would fail a common sense test.
Seems like the stronger your idea, your I.P. or your team's technical skills, the less common sense needed, you are worth mentoring even though you don't get it yet. Still do a common sense check regularly...