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4 Ways to Vet Your Idea

Transcribed article based on the video above.

I consider myself an idea guy and I love hearing other people’s ideas. But often what differentiates an idea guy from a successful entrepreneur, is their ability to vet an idea. I have a checklist of four items I go through with every idea or anyone who wants my opinion on one of their ideas.

1. The most important is are you passionate about the idea? The reason why it is important is that a business is a roller coaster ride, on the dips it’s not fun and you are going to want to jump ship if you are not passionate about the idea or the space and you will jump ship too early and you won’t be successful.

2. Am I fulfilling a need? Am I solving a problem that someone wants me to solve? Not every idea requires solving a problem but I’ve found if you focus on an idea that solves problems, you’re much better off and it’s much easier to execute the idea.

3. Is there an opportunity? Are there people that actually want me to solve this problem? How many of them are there? Am I building a lifestyle business, or a business that needs 20 million in venture financing and I am really going to shoot for the moon? Now, you can chose either but it’s extremely important to be honest with yourself upfront before executing on the idea.

4. What are my chances of success? Am I building a company that needs a sales team? And do I have a background in sales? If I don’t I shouldn’t be executing on that idea. Am I entering a space that has twenty competitors? You can do it but you’re not going to be successful if you’re the twenty first, you’re better off with two or three competitors. In that same vein, you are better off not trying to create a space. Don’t be the first to do something. While there is a lot of reward to doing this, there is also a lot of risk.

We all have ideas and it’s great we have them, I encourage you execute on them but go through this checklist if you want to be successful. You’ll save yourself a lot of time and frustration, focus on the right ideas, and this will help you be successful.

Amir Mir is the CEO of LunchMoney. You can read more of his posts here on Docstoc or follow him on Twitter.