Use cases
Evaluate the idea as a contestant
A business idea is a bundle of claims about customers, prices, and costs, wrapped in a story that makes them feel true together. Evaluating it means separating those claims, weighing the evidence behind each, and comparing the idea with its realistic alternatives, including keeping your current job a while longer.
Four questions for any idea
Who has the problem badly enough to pay, and what do they do about it today? What evidence shows they will pay you, at your price? What does each sale earn after the cost of delivering it and the cost of winning the customer? And what does trying the idea cost you, in money, time, and the income you give up?
The last question is the one founders most often skip. An idea that earns less than the job it replaces may still be worth pursuing, but that should be a conscious choice rather than a surprise in month four.
A ladder of evidence
Evidence of demand comes in rungs. Compliments sit at the bottom, followed by sign-ups and waitlists, then signed letters of intent, then deposits and pre-orders, and at the top, customers who paid and came back. Each rung is harder to fake than the one below, and costs the customer more to give.
Most ideas are judged on the bottom two rungs. A small test that gathers evidence from the upper rungs, such as a paid pilot or a deposit, is usually worth more than months of further planning.
A worked example
A would-be founder plans a mobile dog-grooming van costing $85,000 fitted out. Five appointments a day at $95, over 22 working days, would bring in $10,450 a month. After paying a groomer 40 percent, supplies and fuel of $1,300, a van loan of $1,600, and insurance of $350, the van contributes about $3,020 a month, less than the $5,200 the founder earns now.
If the founder grooms in person, contribution rises to about $7,200, but the business then depends on one pair of hands. The demand evidence is forty names on a neighborhood waitlist and no deposits, which sits on the second rung. Renting a van for three months of weekend work, and taking $25 deposits for first appointments, would show whether customers pay and rebook before the $85,000 commitment.
How the room evaluates an idea
Starting now, reshaping the idea, waiting, and stopping each get their own Champion. The Challenger presses on the evidence of payment, and Inspector marks a waitlist as interest and a deposit as stronger support. The Strategist looks for a smaller or cheaper version that tests the same claim, and Gray Wolf hunts the costs the plan leaves out.
Grandfather weighs what is hard to undo, such as leaving a job or signing a loan, and asks for the cheapest way back. The Verdict states which path leads and the result that would change it, such as a rebooking rate over a set period. The Human Decision on whether to start remains entirely yours.
Questions
- Should I quit my job to test the idea?
- Only once the evidence has climbed past interest to payment, or when the test genuinely cannot be run part time. Many ideas can be tested on evenings and weekends first.
- How much evidence is enough to start?
- Enough that the claim your idea depends on most has been tested with real money. For most ideas, a handful of paying customers who return says more than any forecast.
- What if friends and family love the idea?
- Their enthusiasm is sincere and pleasant, but it sits on the bottom rung of evidence. Ask them for introductions to people who have the problem and would pay to solve it.
Further reading
Bring Argumont a Decision worth challenging.
Start with a paid 60 day pilot on your own real Decisions.