Three useful questions for assessing business ideas

One of the unusual things about Forward Partners is that we invest in business at the idea stage. Often that means we are backing a single entrepreneur with nothing more than a slide presentation. One of our slogans is “No product, no traction, no team. No problem.”

Consequently we often get asked “How do you assess ideas?”

These three questions which came from the Y C application form and were on Founders Notebook this morning are a great guide:

1. What’s new about what you’re making?
2. How do you know people need what you’re making?
3. What substitutes do people resort to because it doesn’t exist yet (or they don’t know about it)?

The other major thing we look at is the market – is the opportunity large enough to build a business worth £100m+ (taking into account market size and margin).

If the answers to these four points are strong, we feel the entrepreneur has the right stuff, and it’s’ a UK based ecommerce company then we are going to be very interested.