Once you have a startup idea, it’s quite a temptation to jump right into building it up. Nevertheless, if you want to be sure you’re on the right track such practice should be avoided. We advise you to evaluate any startup idea with these 3 steps: to identify Problem, Solution, and Reason.

Why Do You Need to Evaluate a Startup Idea?

Kevin Hale, a partner at Y Combinator and host of Startup School, in one of his recent lectures claimed: “The startup is a company that grows very quickly, in other cases, it will be just an average small business company”. In his perspective there suppose to be a hypothesis about why a company could grow quickly. So, your job is to construct your pitch deck to the investor so they understand how and why exactly it can grow. While Mr. Hale focused on the issue of evaluating startups from the perspective of how usually investors do, our team focused on the simple fundamentals of how entrepreneurs can evaluate their business ideas.

Check out "Pitch Deck Templates Inspired By Real-Life Startups and Businesses" that will help you to create a stunning pitch decks.

Building a new product from scratch requires a lot of effort. In fact, sometimes it might be difficult to define whether your idea is realizable, due to you either could have too many ideas or no specific one at all. Precisely, the idea stage frames the potential of the startup, so later you won’t ask why your new business isn’t growing and how you can improve it. Therefore, a startup concept is essential for the future of your business. It has to be simple, clear and legible.

Since your aim is to build a profitable and successful product you should realize the importance of evaluating your idea. The right way will be to do some research and analysis to dig into the potential of your business concept. Surely, you can hire a team of specialists to evaluate our business idea for you. Or perhaps, you’d like to frame the lean canvas for evaluating your business ideas. Nevertheless, we suggest paying attention to 3 steps that will help you to evaluate your startup idea and to be 100% sure about it. So, let’s start!



Any business idea is about solving a specific problem. Therefore, framing a problem is a starting point for any startup. Take in mind that the success of the final product depends on how well it helps end users resolve their problems. You have to clearly understand what kind of problem you want to solve with your business. Be clear and specific in your thoughts in that regard. Ask yourself:

  • What is the relevant challenge of your niche market?

  • What are the crucial issues faced by the customers?

  • What is the setting for this startup that allows it to be able to grow quickly?

Answering these questions will give both you and the dev team a clear vision of what problems should be solved with the help of your product. Additionally, besides having a structured business plan the team of developers would be able to suggest the best technologies according to the targeted problem. Consequently, it will help to deliver a product on time and on budget.

A little hint for you on what “a good problem” should be like:

  • Popular: means a wide majority of people are facing this problem on a daily basis or relatively often;

  • Growing: if the problem grows, the market opportunity is growing as well. Additionally, the rate that more and more people are going to have this problem will be increasing, too;

  • Urgent: problems that need to be solved quite quickly;

  • Frequent:means problems that people are going to encounter over and over again.

In order to figure out the relevant problem, you should focus on customer segmentation and market analysis (especially competitive analysis) first. Researching on both categories will illustrate the full scope of a market situation as well as prospects of new product development.

Customer segmentation. As we mentioned before, your startup needs to solve customers’ problems. So, to have a clear understanding of different challenges that people face, you have to come up with a target audience - your end-users. Ask yourself:

  • For whom you’re building this product?

  • Who is your target audience?

  • Why will this audience want this product?

The answers help you to provide solutions to your targeted customers’ problems. You shouldn’t be limited to only gathered answers at this stage. In addition, think through a detailed portrait of your users: gender, age, social status, occupation, income, hobbies, etc.. This practice is great for a more accurate evaluation of your startup idea.

Competitor analysis. Needless to say that before you frame your business concept it is essential to revise the main competitors on the market. Neglecting this step will lead to launching the product/service that already existing on the market, probably with similar features and potential. Subsequently, it might lead to the failure of your startup.

To avoid any negative outcomes try to find answers to the following questions:

  • Who are the main competitors on the market?

  • What kind of killer features do they have?

  • What are their weaknesses as well as their strengths?



Until this point, you focused on the relevant problem to solve and now it’s time to think about how exactly your startup is going to resolve your customers’ problems. Your vision of the solution is an important one since it will contribute to the overall project estimation when it comes to the development process. In this block the predominant questions are:

  • What are your solutions to your customers’ problems?

  • What is your unique approach towards the problem?

It is crucial to take in mind that solutions come after framing the problem. It is a huge mistake to start working on a startup project only because there are new technologies or trends has come on the scene. Such practice is ineffective since you won’t know what kind of problems can you solve now.

The right approach is to find out what challenges experience the target audience and then use whatever is necessary to solve those problems. As a result, there are more likely your startup will grow. Look at the reason why you’re trying to do startup. Is it because you only care about new technologies or trends or you’re want to pursue a more significant purpose - like come up with a unique decision for the existing problem.

Read our article "Top 5 Startup Challenges and How to Deal With Them"



Finally, the reason is a cherry on top of the whole process of the startup idea evaluation. This is an explanation of why your solution will work. It is a reason why customers will choose your product/service over anyone else. Think about the following:

  • What is your startup advantages?

  • Why are your product is going to win versus everyone else?

  • Why is your startup to be the fastest one to grow and expand?

You need to have a clear view of how your startup will create and deliver business value to customers. Being an expert in a certain sphere is one option. The other one is to produce a truly great product. One way or another, the reason is what should distinguish you from the others and what should attract more users to try and buy your product.

Note that without preliminary research on the market situation and competitor analysis it would be impossible to shape your own competitive advantage, something that will stand your brand out from the wide majority and help to deliver a top-notch product.

Read our article "Startup Development Phases and Its Peculiarities"

How We Evaluate our Client’s Startup Idea

Our team asked clients about the building blocks of the small business idea during our common kick-off meeting. We ask our client to fill the brief form that includes ten building blocks, each of which contains one or more questions. These blocks are logically structured, and have the form of the startup idea checklist, helping the dev team to understand the business idea better.

Now it’s time to meet the team responsible for developing your application. Of course, the exact size of the team will be determined by the scope and complexity of the project. Our team includes a business analyst, project manager, UX designer, frontend, and backend developer.


Starting a new business is always exciting, especially when you have hundreds of brilliant ideas. However, are you 100% sure that your startup idea is the right one? Before jumping into the development process and coding your new product, you have to evaluate your startup idea first.

There are 3 main steps in the process of idea evaluation. Problem - the success of the final product depends on how well it helps end-users resolve their problems. You have to clearly understand what kind of problem you want to solve with your business. Solution - how your startup is going to resolve the problem. It is crucial to find out what challenges experience the target audience and then use whatever is necessary to solve those problems. Reason - this is an explanation of why your solution will work. It is a reason why customers will choose your product/service over anyone else. Note that evaluating your startup idea is a crucial step in your new business development.

We hope that the article will be helpful to you. In case you still have any questions or suggestions feel free to contact us and we gladly assist you in any inquiries.