startup-evaluation

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

1. Start small, think big — Beachhead market first, then expand
2. Customer discovery > product development — Talk to customers before building
3. LTV/CAC is the key metric — Must be > 3 for sustainable business
4. Innovation-driven vs. small business — Different frameworks for different types
5. 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