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Startup ideas · Lesson 3 of 6

How to Compare Business Ideas: Problems, Not Excitement

Choose the next problem to investigate using evidence, access and existing alternatives.

20 min · Free · no sign-up

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What you will learn

Use criteria to expose assumptions

Compare problem frequency, consequence, access to customers and evidence of current spending or effort. A score is a prompt for discussion, not a prediction of business success. A high score with no real evidence is still a guess.

Include what customers already do

Alternatives include spreadsheets, agencies, internal tools, a competitor and doing nothing. Ask why switching would be worthwhile once migration, trust, learning and money are included.

Investigate the weakest important claim

If the problem seems painful but you cannot reach buyers, test access first. If buyers are easy to reach but do not spend time or money on the problem, investigate urgency. Choose the cheapest next piece of evidence.

An example

Idea A has a large estimated market but no customer access. Idea B serves one type of bookkeeper you can interview this week. B may be the better learning experiment even if A sounds more impressive.

The trap to avoid

A weighted score cannot replace customer evidence. Do not quietly give your favourite idea generous ratings.

Try it: the exercise

Answer these three prompts. In the Equip learning desk your answers are saved in your browser, with a checklist to review them.

  1. Two candidate problemsDescribe each using a customer and a recent problem.
  2. Evidence and alternativesFor each, list one supporting observation and the strongest current alternative.
  3. What will you investigate next?Choose one uncertainty and explain why resolving it matters.

A good answer has

  • At least two genuine alternatives compared
  • Scores explained with evidence or marked as guesses
  • A specific next investigation
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Check yourself

An opportunity scores 19/20 using only your own guesses. What is the best interpretation?
  1. It is almost certainly profitable.
  2. It is a hypothesis worth investigating, not a validated opportunity.
  3. It is better than any lower-scoring observed problem.

Answer: B. The score organizes assumptions. Its precision does not make the underlying evidence stronger.

What belongs in your competitor analysis?
  1. Only startups with the same feature list.
  2. Only publicly traded companies.
  3. Spreadsheets, services, internal tools and doing nothing.

Answer: C. The customer compares your offering with all ways of handling the job, including tolerating the problem.

From the course library

  • Startup School ↗

    Y Combinator · 7 weeks · 1–2 hr/week

    A practical starting point for evaluating ideas, planning an MVP, finding users and building a company.

  • New Enterprises ↗

    MIT OpenCourseWare · Self-paced · semester materials

    A deeper framework for identifying and sizing market opportunities, developing a business model, and planning a technology venture.