Litmus Test Questions for thinking of Startup ideas
This is a list of litmus test questions I formed from my time at Antler (UK9). They're not exhaustive but they can massively help when thinking of ideas.
On Problem Area
In one short sentence what is the problem you are trying to solve?
Who is the ideal customer profile (ICP) for this problem?
Do you have access or the ability to set up a 15-30 mins call with 30 ICPs in the next 5 working days?
How are these 30 people currently solving the problem?
What other frustrations do these people have around this area? (E.g. If you're working on a knowledge management software, ask your ICPs “What are your top 3 frustrations with your knowledge bases?”)
If the answers to the previous question are people problems, change it to frustrations around tools or software
If someone is distracted by their phone, what in your problem statement would grab their attention immediately? (E.g. In the movie "Man on Fire", the opening scene starts with "a person is kidnapped every sixty seconds in Latin America, and only 70% are likely to survive."
On Solution
Is your solution at least 10 times better than the current way your ICPs are solving it? In time, money saved or other.
In one short sentence, what is your solution to the problem identified?
Why is now the right time to solve this problem? Technological shift, regulatory shift, behavioural shift? Careful not to confuse trends with shifts.
Why are you the best person to solve this? Or your team?
What is the impact of your product? If it does not exist, what would happen?
On Market
Is your user the same as your customer?
If they are different, do you have access to the people that would actually pay? (Can you name 10 potential customers?)
How big is the market? TAM, SAM, SOM
How will you make money?
What is your path to £50m ARR in 5 years?
What is the industry average CAC for your area
On Competition
Who are your competitors?
How are you different from them?
Why won't they copy you?
How will you build a moat?
On Execution
How fast can you build a design mock-up of the solution?
How fast can you build a Proof of concept of the solution?
What are the gaps in your team? And how are you going to fill it? (E.g. tech, sales, lawyer, physician)
How quickly can you get a waitlist of users or Letter of Intents?
Which networks or communities do you have immediate access to?
On Customers
How will you get your first 100 customers?
Why or how would your first 10 customers tell other potential customers?
Which of your customers would accept a clunky product?
On Yourself
The questions in this section are still evolving and are not finalised.
What's the hardest thing you've done voluntarily?
I qualified it with "voluntarily" because whilst doing something hard voluntarily, you can always give up. And choosing not to give up is what would get you far.
Are you willing to catch the last train home on half of the days in a month?
What would stop you from working an 18 hour day, 2 days a week? Startups are hard
Why do you want to start a startup? Can your “why” sustain you for 5 years?
Does anything in your history point to why you are fit to do a startup?
