Evaluate business ideas in software development

Question

What are certain signs to pursue or discard a business idea?

Answer 1

In my experience, it's not so much the idea as the people. If the people are ignoring and trivializing large parts of the game, then they are a bad bet. A common example is anyone who says "I just need a programmer."

If the people are in touch with their target market, understand their competition, and understand what resources they have and need, then they may be a good bet.

Answer 2

Pursue if you know and trust them or respect their track record.

Discard a business idea if it doesn't interest you.

Answer 3

You have to WANT to work on the idea, and the scope of the project needs to be clear to everyone involved. If you can't figure out how long it should take, and what additional resources you may need, you are probably in over your head. However, the more projects you work on, the better you will become at figuring this stuff out.

Make sure the requirements are well worded. If they are hard to understand, chances are high that the person who wrote them doesn't really understand the requirements either.

Answer 4

A good first reading on this subject is Steve Yegge's rant.

Another good plan is the '5x' rule: you must be at least five times better than existing competition to win.

Finally, never do business with: 1. Folks that strike you as stupid, even if they had a good idea. 2. People who volunteer that they are politically conservative, unless that's a key factor for the target market. 3. People who volunteer their religion.

Answer 5

It really depends on what your goals are. If you are looking for something fun and exciting, you'll need to pick something that interests you regardless if you think it has a huge chance of being wildly successful.

If you're in it for the money then you'll need to pick a job where the business prospect sound and back by people who know how to run a business. This will most certainly be the less fun of the two and is really the harder of the two paths. You'll need to check into the backgrounds of people who run it and get a feel for if they can really pull off what they want to do. I disagree with Glomek on the idea that disregarding a company that says, "I just need a programmer." He's right the job will most likely suck, but it could mean the company is trying to be lean which is possibly a setup to be aquired and is where the real money is. The day of the startup IPO is most likely over because of Sarbanes Oxley, which means that most startups are looking to be aquired and is a totally different mindset....high profits and low overhead for a short term gain.

All business ventures are risky. You never really know if one is going to succeed or fail. I would say if it doesn't interest you, don't take it. Money is nice, but at what cost. Working your tail off for 5 years is a long time, and you'll miss things as life passes you by.

Answer 6

Number 1 - Understand the business! I can't reiterate this point enough. Seems simple but often overlooked. Stay within your "wheelhouse".

Number 2 - Recognize that the idea will likely change/morph over time into something someone wants and will pay for. Don't marry the idea... it will likely get a haircut and gain a few lbs.

Number 3 - The People vs. Market Forces Debate. Question is to go with good people or what seems to be a good market. Much has been written on this topic, Paul Graham writes about it here (scroll down to the Picking Winners section). For me, it's go with the people you like and think are relatively bright.

Number 3.5 - If you have an idea with real life companies willing to pilot your idea then that's a good sign too!