It’s been a good week for interesting blog posts and Evhead has a great piece on evaluating a business you’re thinking of starting or investing in. They look at these criteria:
- Tractability: How hard will it be to build and bring to market
- Obviousness: Will people ‘get it’ easily?
- Deepness: How much value will you deliver?
- Wideness: How many people will ultimately use it?
- Discoverability: How will people hear about it?
- Monetizability: How will you make money?
and finally,
- Personally Compelling: Do you really want to do it? (whatever you do, don’t skip this one!)
I ran a business plan contest for several years and read hundreds of executive summary plans in the process. Very few (less than 5%) answered even one of these questions. I doubt a single plan would positively address all of them. That’s OK because business planning is the process of learning what business you’re in and whether you want to be in it. We started out thinking we were affiliate marketers and found out that we were domain investors/developers. We changed our focus because domaining was more interesting and broader in potential, a more strategic business.