I was recently asked to join a committee ranking applicants coming in to the Startl + DreamIt accelerator on the education side. This was my first time doing something like this so I asked a few friends who have done this before for the best strategies in terms of evaluating startups. Here is how I looked at the companies:
There are three key aspects to evaluate a company, team, traction, and market. Each category gets up to 10 points.
In regards to team, you want one that either has startup experience (i.e. has previously worked for a different startup) or has determination and high potential. You also want a team that is well-rounded: designer, engineer, product, business (or founders having the qualities of multiple pieces).
In regards to traction, you want to know where the startup is in terms of their product. Is it in the ideation stage? Is it in market? Do they have users? Revenue? The farther along to traction the better the number.
In regards to market, you want to understand how big the market is that the team is going after. Is it a niche business or something that is venture back-able?
The goal of this exercise is to help understand where the company is and ultimately the end result is to only admit ranks of 25 or higher.
To me, the perfect startup idea has the following three characteristics:
1) There is a big vision about how to do something new or better.
2) There is something you can build today that realizes a piece of that grand vision. The solution has at least one foot in today, but also a half of a foot or a full foot in tomorrow (i.e. magic, think Shazam). This allows you to get some immediate traction.
3) The business is revenue-generating in some way so you don’t have to depend on others (others being investors).
What else would you add to this?
There are lots of pieces to the startup world that are affected by forcing something that doesn’t work. This could be a product that isn’t gaining enough traction, it could be a plan of business development action that isn’t working, or something else.
I’ve been there before. I’ve tried to force products and offerings that didn’t make sense. It never works. The best bet is to build or offer something you truly believe in. Something that you sincerely know will help your users or partners. If you do that, you will then have all the success in the world, because sincerity sells and people can see through the bullshit. If you don’t, you’ll just be spinning your wheels, wasting everyone’s time.
It seems like every day someone in the office is announcing that there’s an awesome group deal we should all jump in on. Sometimes the deals are awesome and for something I really want or need. Most days it’s for something cool but totally unnecessary.
Exhibit A: Two Snuggies and two book lights for $7.99 plus shipping (ended up a little under 15 bucks).
Snuggies are cool (I may regret saying this). They keep you warm on the couch and can be useful.
But do I really need one?
Four people in the office got in on the deal. I was seriously considering joining in. But I didn’t.
You know why?
Because guess what’s cheaper than getting in on a group deal?
Not doing it at all.