If you have any ounce of entrepreneurship in your body, it's likely that startup ideas run through your mind on a daily basis. The hardest part about all those ideas? Picking the one that has legs.
Typically, I'm in the camp of ideas being shit, and execution taking precedence. That in mind, there's a lot of value to be had by absorbing the ideation and evaluation process of others. In between learning about "The most disgusting things Paula Dean has ever put in her mouth," I stumbled across this email thread between the Picnik founders at the inception of their company, which later was acquired by Google for $50mm.
It's a fascinating look into the early stages, and a great benchmark for the things that should be considered when evaluating an idea for a startup from a high level. The note touches on the following core pieces, distilled for consumption below.
Vision - Own the Internet Photo Editing Market
Problem - There is no ability to manipulate photos once they are online. People have to download them, bring them into a photo editor (which they must buy/maintain/upgrade), and somehow upload them again. That sucks.
Solution - A wholly-online photo editor, provided in (at least) two forms. Standalone, as an online application we provide direct to end-users. And integrated, as a seamless part of any site whose users benefit from being able to manipulate images.
Competition - Established companies with photo editing products. Established companies have to overcome two major hurdles to address this market (in addition to realizing it is a market!). First they must write an online photo editing application. There will be no quick ports of existing applications; most code will have to be from scratch. Second, they must implement their code to work as a seamlessly integrated service in a 3rd party site. Not only is this more work, but it is a new mindset for the established players.
Trend - Our timing is right. We're at the intersection of demand (mass use of online photos) and capability (Flash 8 supports the first level of functionality we need). Flash 8.5/9 will take us to the next level. New sites and services that make use of photos are popping up all over the place. Photos are becoming an internet data type as common as text.
Aside from potential revenue models (which were touched on briefly), it's a fairly comprehensive and quick checklist to use when you're running through ideas of your own. If they compellingly pass this litmus test, then you can move to something more comprehensive like a canvas or even throwing up a landing page and putting those assumptions to test through customer development. Or, working through the economics of your idea through different financial projections - I've got a model for just that.
The important part is having a method for killing an idea before it becomes too much of a time suck. There's nothing worse than spending months and months on an idea that there isn't a need for.
Speaking of which, I'm thinking about starting up a Bacon Cheeseburger Meatloaf shop.