How to Evaluate Start-Up Ideas by Kevin Hale

How to Evaluate Start-Up Ideas by Kevin Hale


How to Evaluate Start-Up Ideas by Kevin Hale

This article aims to collect the information in Y combinator for our entrepreneurs and give it as raw information. The first of these articles, which we named as startup 101, is “how to evaluate startups ideas”.

Let’s begin ?

How is an idea generated? Will the investor like my idea? Will I be able to grow when I can start this start-up? Are you focused on solving the problem? Let’s say you have a very large design space?

All material package and preparation are reserved in the description. According to Y Combinator, a business is a company that was established to grow very quickly (Start-up = Growth). The investor can increase your nurturing, increase your earning, and today it should be able to stay in the very dreamy, lucrative long-term continuously (growth in the longest run) and its users should be able to solve its problem immediately. If your startup does not promise rapid growth, it will remain an ordinary company. So how can we achieve this “very fast” growth?

We are an acceptable as an enterprise. This idea consists of 3 areas: Problem, Solution and Insight:



The problem, we can say, is the heart of a start-up, if it doesn’t work, you die. We can mention 6 characters to describe the problem, these are:

Popularity: Too many people having the same problem (Number of users)

Growth: The problem is that the market is growing, so we create a growing company even if we are on average. (Increasing the potential)

Urgency: It should be the problem that people want to solve immediately. (Immediate, Instant, Instant)

Pricing: Potentially high yield, much cheaper than competitors. (Competition)

Obligation: The solution of the problem is mandatory. (It works)

Frequency: Encountering the problem frequently (more than once)

The problem need not have all of these properties, but must be identifiable with at least one. The frequency clause is the most important of these.

The following equation has been put forward to guide the behavior of your customers to prefer you. We should give them a source of motivation (problem solving), achieve this effectively and remind them frequently (mail, message, notification).

Behavior = Motivation + Skill + Trigger


The basic definition of the solution is what experiments to do that will confirm the hypothesis and ensure rapid growth. It is the process that should not be started to come up with ideas. SISP = Solution In Search of a Problem. The approach where we can take a very good or new technology and use it in which problem is wrong. Instead of offering a solution out of the blue, it is desirable to produce a solution to an existing problem.



Insight is the explanation of how the proposed hypothesis will be successful with the method to be used. It needs to show what kind of superiority you will have over the opponents. This allows the investor to find you valuable. Insights are possible by recognizing your unfair advantages. To list these advantages:

Founder(s): Having founders who are super expert on something. Many people think that their position (product manager at google) will make an impact, but there are too many product managers at google. Instead, being an expert with a PhD in a subject and holding a patent provides a real advantage. (to be one of 10 people who can do the job)

Market: If the market you are in is growing by about 20%, you can automatically catch this growth. However, if you aim to grow in a shrinking market, it will be more difficult to convince the investor.

Product: Having a product that is 10x better  creates a real advantage. This could be 10 times faster or 10 times cheaper.

Acquisition: Having resources to earn without cost is a very good advantage. The best example of this is to be able to spread word of mouth (word of mouth) instead of advertising. It is necessary to think about the question of how I can grow without spending. (best goes to 0)

Monopoly: Having clear advantages that will enable you to stand up to your competitors. Being the owner of the market in the marketplace enterprise or strengthening and growing its place with the network effect are the advantages that can be examples. (1 or 0)

There are generally 2 beliefs about a company.

Threshold: The initiative must actually be able to do what it promises, if it can’t it means nothing.

Miracle: From an investor’s point of view, believing that your high-expectant idea can be realized even though you don’t have many indicators is equivalent to playing the lottery from an investor’s point of view.

In sum up, we can think of the venture idea as a hypothesis that explains why it must grow “too fast.” The next lesson will be about testing our hunch and talking to users about ways we can turn this hypothesis into evidence.

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