The SaaS App Startup Journey
PHASE 1: IDEA
1.1 Initial Idea Evaluation
I can still remember as an unseasoned entrepreneur how I jealously guarded my ideas. I thought each idea was unique and valuable and was afraid to share my thoughts.
But now as an experienced entrepreneur and investor, it’s clear to me that ideas are cheap. I would go as far to say that every single experienced entrepreneur and investor would agree with me.
A quick search on the value of ideas will produce hundreds of quotes such as these from everyone that’s anyone:
“Good ideas are a dime a dozen. It’s what you do with them that counts.”
“An idea isn’t worth anything, it’s all about execution.”
Here’s a few of my favorite quotes from Thomas Edison:
“I have not failed. I’ve just found 10,000 ways that won’t work.”
“I have more respect for the person with a single idea who gets there than for the person with a thousand ideas who does nothing.”
“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.”
Action items for this step in your journey:
- Develop an evaluation framework to evaluate your idea. For example, a great idea:
- …solves a problem that you have a deep passion for solving and in a context in which you are absolutely a subject matter expert
- …serves a very large customer set that you deeply understand and have been serving for years with existing, high-quality relationships
- …is in a market and industry that you have been in for years and have deep industry contacts in order to forge alliances and channel partnerships
- …is one that you’ve spent countless hours thinking through, reframing, reshaping, tweaking, testing, and pivoting
- …is a uniquely-better value proposition that creates enormous value for customers
- …is an absolute customer “need” and not merely a customer “want”
- Rigorously and objectively evaluate your idea and it’s fit with you and it’s potential in the marketplace
- Continue to rework all dimensions of your idea and potential business model in preparation for soliciting feedback
Take the assessment below to see if your idea can be invested in.
Here are some frequently asked questions
- Overestimating the market opportunity: It is easy to overestimate the size of the market for a new product or service.
- Underestimating the competition: It is important to carefully consider the competition before valuing an idea.
- Overestimating the strength of the team: It is important to be realistic about the experience and skills of the entrepreneurs.
- Using overly optimistic financial projections: Financial projections should be based on realistic assumptions.
- Online valuation tools: Our Valuaion Analysis asks a series of questions about the idea and then provide an in-depth valuation based on your answers
- Startup incubators and accelerators: Startup incubators and accelerators often provide resources to help entrepreneurs value their ideas.
- Mentors and advisors: Mentors and advisors can provide valuable insights into the valuation process. We offer 1-on-1 coaching and assistance to help you with your startup. Contact us today to book a time a day with our team.
Know your audience: Research the VCs you are targeting and understand their investment focus and criteria.
Craft a compelling narrative: Tell a clear and concise story about your problem, solution, and market opportunity.
Highlight your traction: Showcase your customer validation, market traction, and team strength.
Articulate your business model: Explain how you plan to generate revenue and achieve profitability.
Present realistic projections: Provide realistic financial projections that are supported by your data.
Be prepared for questions: Practice your pitch and be ready to answer tough questions from VCs.