Startup Evaluation — 24-Step Framework
Evaluate startups systematically using MIT's Disciplined Entrepreneurship framework by Bill Aulet.
Usage Template
Prompt
Use startup-evaluation on this idea. Assess customer, market, beachhead, value proposition, business model, risks, and next validation step.
Use Case
- Evaluating a startup idea, company, or product direction before investing more time or money.
Expected Result
- The agent returns a structured assessment with assumptions, evidence, risks, and validation experiments.
Output Example
- A one-page startup memo with beachhead customer, painful use case, assumptions, risks, and cheapest test.
Verification Case
- The output distinguishes known facts from assumptions and names the next cheapest test.
Verified Effect
- Startup enthusiasm becomes an evidence map, risk register, and practical validation plan.
When to Use
- User wants to evaluate a startup idea
- User is conducting due diligence on a company
- User wants to analyze a business model
- User says "assess this startup" or "evaluate this business"
The 24-Step Framework
Phase 1: Market Identification (Steps 1-5)
| Step | Question | Key Metric |
|---|---|---|
| 1 | Market Segmentation — Who are the potential customers? | Customer segments identified |
| 2 | Beachhead Market — Which segment to start with? | Clear initial target |
| 3 | End-User Profile — Who exactly is the buyer? | Detailed persona |
| 4 | TAM Calculation — How big is the market? | Total Addressable Market |
| 5 | Customer Acquisition — How do they find you? | Acquisition channels |
Phase 2: Customer Understanding (Steps 6-10)
| Step | Question | Key Metric |
|---|---|---|
| 6 | Decision Making Unit — Who decides to buy? | DMU mapped |
| 7 | Acquisition Process — What's the buying journey? | Funnel stages |
| 8 | Customer LTV — What's a customer worth? | Lifetime Value |
| 9 | Competitive Landscape — Who else serves this market? | Competitive map |
| 10 | Product Solution — What do you offer? | Value proposition |
Phase 3: Product Development (Steps 11-15)
| Step | Question | Key Metric |
|---|---|---|
| 11 | Value Proposition — Why you? | Unique value |
| 12 | Quantified Value — How much better? | Metrics |
| 13 | Pricing Strategy — What to charge? | Price points |
| 14 | Sales Channel — How to deliver? | Channel strategy |
| 15 | Marketing Strategy — How to attract? | Marketing plan |
Phase 4: Business Model (Steps 16-20)
| Step | Question | Key Metric |
|---|---|---|
| 16 | Business Model — How to make money? | Revenue model |
| 17 | Customer CAC — What does it cost to acquire? | Acquisition cost |
| 18 | Sales Process — How to close deals? | Sales funnel |
| 19 | Market Size — More precise estimate? | Refined TAM |
| 20 | Financing Strategy — How to fund? | Capital needs |
Phase 5: Execution (Steps 21-24)
| Step | Question | Key Metric |
|---|---|---|
| 21 | Team Design — Who's needed? | Team gaps |
| 22 | Board Design — Governance structure? | Board composition |
| 23 | Milestones — Key checkpoints? | Milestone plan |
| 24 | Iteration — How to adapt? | Feedback loops |
Quick Evaluation Checklist
For rapid assessment, focus on these critical factors:
✅ Market (Steps 1-5)
- Clear market segment identified
- TAM > $1B (for VC-backed) or > $100M (for bootstrapped)
- Beachhead market clearly defined
- Customer acquisition channels exist
✅ Product-Market Fit (Steps 6-10)
- Clear buyer persona
- LTV/CAC > 3
- Competitive advantage identified
- Value proposition is compelling
✅ Business Model (Steps 16-20)
- Revenue model is clear
- Unit economics work
- Capital requirements are reasonable
✅ Execution (Steps 21-24)
- Team has relevant experience
- Milestones are achievable
- Feedback loops exist
Evaluation Scoring
| Score | Market | Product | Team | Verdict |
|---|---|---|---|---|
| A | Large, growing, clear entry | Strong PMF, defensible | Experienced, complementary | Strong invest |
| B | Good size, some competition | PMF emerging, needs iteration | Capable, some gaps | Conditional invest |
| C | Small or crowded | Weak PMF, undifferentiated | Inexperienced or incomplete | Pass or pivot needed |
| D | No clear market | No product-market fit | Wrong team | Clear pass |
Quality Gates
- Known facts are separated from assumptions.
- Beachhead customer and painful use case are explicit.
- Market, product, business model, and execution risks are scored.
- Competitive alternatives are named.
- Next cheapest validation test is concrete and measurable.
- Final verdict includes residual uncertainty.
Key Insights from Bill Aulet
- Start small, think big — Beachhead market first, then expand
- Customer discovery > product development — Talk to customers before building
- LTV/CAC is the key metric — Must be > 3 for sustainable business
- Innovation-driven vs. small business — Different frameworks for different types
- Discipline over inspiration — Follow the process, don't rely on genius
Connections
- [[wiki/concepts/产品市场契合]] — PMF is the core goal
- [[wiki/concepts/创新扩散]] — How new products get adopted
- [[wiki/concepts/飞轮效应]] — Business model growth logic
- [[wiki/concepts/精益思维]] — Rapid iteration methodology
- [[wiki/concepts/7种战略力量]] — Competitive advantage framework
- [[maps/VC与一级投资知识库]] — VC evaluation frameworks