How do you evaluate business ideas? Is it an analytical, repeatable process and how much of it is based on your own personal feel or intuition?
I encountered this question as a request on my Quora inbox and I decided to share it here primarily because many people are struggling to get business off the ground due to “paralysis of analysis”.
Here is a short excerpt:
Listen to intuition first. Majority of the time, I will pursue an idea that I perceive to be viable then I invite the facts, logic and basic business indicators to guide me into finally deciding whether or not to take a leap and invest.
It is at the point of logical evaluation that I employ an analytical, repeatable process of checking on two major areas:
a) Potential demand of investment vs rate of return
b) Business fit to the overall objectives of my business ventures
In a nutshell, as an entrepreneur, the process of evaluating an idea for business is almost like the way a surfer evaluates which wave to ride – surfboard in place, leg rope fastened, eyes on the ocean and focus on the goal. When that wave comes, he/ she will know, “this is the one to take”