How do I know if my idea is going to be interesting to an investor?

Many founders often question if their startup idea will intrigue investors.

Typically, startup ideas consist of three elements: the problem, the solution, and the insight.

A frequent issue is that founders begin with a solution, trying to fit a problem into it, sometimes lacking a clear insight.

It's more effective to start with identifying a problem. Understanding the problem helps in recognizing the potential customer and the market size.

An essential aspect is calculating the idea's viability as a billion-dollar business. This involves figuring out the necessary number of customers and the price point.

For instance, if aiming for a billion-dollar valuation at 10x revenue, and the product's lifetime value is $100, the goal becomes acquiring 1 million customers.

Beliefs play a crucial role here concerning the product's price acceptability and the existence of a million potential customers.

Four types of beliefs are considered: beliefs about the founders, the market, the product, and the acquisition strategy.

These beliefs vary depending on the nature of the startup.

For consumer startups, the focus might be on whether the founders can convince customers to pay a high price, whether the market supports such products, and whether the perceived value justifies the cost.

When assessing startup ideas, it's vital to start with a well-defined problem and evaluate the feasibility of reaching a billion-dollar valuation.

This involves analyzing beliefs about the team, market, product, and acquisition strategy.

Convincing evidence in these areas can make an idea attractive to investors.

For more on this topic, check out this YouTube post by Kevin Hale

Video Credits: Y Combinator