Help evaluating a startup idea


Last week I had an idea for a new startup to help businesses with their recruitment process. So far my research into the idea has gone a little like this:

  1. Thought about idea, did not know whether similar services already existed.
  2. Discovered that there are many websites offering such a service (some seemingly doing pretty well in terms of the number of employees, etc) but often they seemed overly complicated/expensive and had poorly designed websites.

At this point I was very positive as:

  • It seemed that demand for the idea was validated by the existence of companies already offering it.
  • I felt that my offering would be different as it would be simpler (perhaps better suited to smaller businesses and generally have a wider appeal), cheaper and better designed (in terms of being more of a "Web 2.0" site).

However my research then continued and I discovered that there are already some websites very similar to the type of solution I had in mind. One in particular is, on the face of it, pretty much exactly the kind of site I would like to build.

What I'm now trying to decide is whether at this point I should move onto the next idea or instead progress this one, with the following in mind.

  1. I could undercut the existing solutions and also have an idea for a slightly different pricing model which I think (would need to confirm with research) might appeal to potential customers.
  2. Whilst the site I mentioned above does seem very good, perhaps with further research I can reveal things about it that customers don't like, then ensure I do these things better in my site.
  3. All existing solutions seem very much targeted at the US. Whilst I would look to serve this market also, I'm based in the UK and am wondering whether I can tap into this market
    more so than my competitors.
  4. Even if the site I mentioned above did not exist, there is no reason why it (and others like it), could not spring up after my site went live anyway.

Any thoughts greatly appreciated :)


asked Feb 23 '10 at 08:47
William Lannen
195 points

4 Answers


There is no right or wrong answers to your questions.

If it is a big market and no dominant market leader (> 80% market share), you often can carve out reasonable niche by position yourself differently. Example: FogBugz.

To decide whether you should move onto the next idea or not, it comes back to you on what kind of businesses you want to build. Personally, been through the process, here's a list of questions I asked myself now every time I am evaluating new idea.

  1. What size of the business do I want to build? -- why work on small market if my goal is to build $100m business
  2. Do I want to be the king of [idea]? -- see if I am passionate about the idea
  3. What are the requirements to build the version 1.0? -- release early!
  4. What is the viral aspect of the idea? -- because I learn that user acquisition is not cheap.
  5. What is the one thing that I understand that my competitors don't? -- product positioning

It surprises me how much ideas I threw away after I run through that questions.

Hope that helps.

answered Feb 23 '10 at 09:59
Hendro Wijaya
1,408 points


Great questions to be asking! First, I'll deal with the last point made, because it's the most straightforward. When starting a company, any company, it's safe to assume that competition will exist sooner or later. So you need to figure out what would set you apart.

What you should try to figure out is what would set you apart, and what you personally could bring to the table that would not be easy to replicate. For example, if you needed to build some complex software to make your idea work, and that would not be exposed to the client, then you could have a distinct advantage over your competition (potentially).

Trying to buy your way into the market by undercutting CAN work, but it may not be a good long term solution. You still have to be competitive, and provide a better service, or product, or feature set than your competition. I would not recommend this route, unless you're trying to buy a competitor's entire business.

answered Feb 23 '10 at 23:56
4,692 points


Base your decision on how well you know this customer base and the problem you're trying to solve, because it is going to change and you better be ready. You can only copy the competition for so long.

Cutting cost may not prove to be profitable. You don't want to find that you're not making any money and then have to raise rates too soon. Your competition may have deeper pockets than you.

Keep us posted.

answered Feb 24 '10 at 04:02
Jeff O
6,169 points


Great set of the right questions to be asking William.

  1. Competing on price on the net is a losing game. Completing on cultural/legal/social differences that improve your market fit and connection to your customers is not. The UK is certainly a large enough market to work with if you can devise a "more Brit" approach than what we take over on this side of the Atlantic. But if has to go further than just spelling differences.
  2. The competitor who has a product/service like what you are thinking about - what did they get right? Wrong? Is there a smaller set of people who would have loved that product more if it fit them better? Nothing wrong with considering how existing competitors/future competitors will be approaching the same problem as you are, so long as that's not the only way you shape your startup.
  3. Given you idea seems to have a fairly low barrier to entry, how can you execute it in a way that's harder to copy. For example, most programmers can write a color wheel program, but took an entirely different approach that you either hate or love... and buy.
answered Feb 24 '10 at 04:08
Bob Walsh
2,620 points
  • Thanks for your comments, Bob. I recently bought your 'Web Startup...' book and am finding it very useful, so I really appreciate your input :) – William Lannen 14 years ago

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