Startup Viability Score (Interactive Calculator)
I am a subscriber of Jason Cohen's fantastic blog A Smart Bear (and you should be, too!).
If you didn't know, Jason bootstrapped multiple companies (most recently WP Engine, which after bootstrapping raised venture capital and became a huge success). Based on his vast experience as founder and investor, he has a plethora of valuable insights to share. Fortunatately for us, this is exactly what he does in his blogposts, podcasts, and talks (recommended: YouTube: Designing the Ideal Bootstrapped Business)
In his latest blog post Excuse me, is there a problem? (a long-read and 100% worth your time), Jason explains why many startups fail, despite
- correctly identifying a problem, and even
- actually solving that problem with their product.
In a nutshell, there are many more factors that determine your chances of success as a company. Further down in his post, Jason describes a system that combines these factors into a "score". While the value should obviously be taken with a grain of salt ("there's an exception to every rule"), it is interesting to play around with assumptions and the positioning of your (potential) startup.
To make playing around with different ideas and scenarios even easier, I put together an interactive version of this scoring system:
Startup Viability Score Calculator
In each row, choose the factor that fits to your business idea. All selected values are multiplied and then divided by exactly 625,000. A score of 1 is the threshold for an indie startup, 2 or more for a scale-up. Refer to Jason's blogpost to learn why all of that makes sense.| Plausible Number of potential customers (consumers or businesses) who actually have the problem | |
| Self-Aware Willing to solve the problem | |
| Lucrative Annual allocated budget (net-revenue) | |
| Liquid Frequency of purchase decision | |
| Eager (identity) Attitude towards your company | |
| Eager (comparative) Competitive differentiation | |
| Enduring Will they still be here a year from now? |
Doesn't seem like a viable business model
As mentioned above, keep in mind that the resulting score is only a quick way to get a feeling for your market and positioning. There's an exception to every rule.
By the way: There is also a simple open-source version as a Svelte REPL here.
Thanks for reading!
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