How do you know if a startup has the potential of becoming $1B+ company?
The most important factor is the market size. i.e. Travel Industry
Other things you might also want to look at is the entry barrier and scalability.
You don’t.
Don’t be naive.
Understandably, most entrepreneurs do not have any idea about the potential of their startups. That is the job of an experienced business analyst and investor. However, as an entrepreneur part of your initial responsibility is to develop a simple business plan which should include your Market Analysis. If you do not have an idea of your market size from the onset then you have no business starting a startup.
Without writing a thesis, how big your market is & how much you can effectively squeeze out of it are two different things.
Also, he asked about potential. Simply put, every startup has the potential, but not every startup can turn that potential into reality, regardless of what your market analysis tells you.
I think you’re being the naive one.
Young man, God does not play dice with the universe.
There are fundamental, deterministic and measurable variables that govern the potential of a new startup. Market need, market size, scalability, competitors entry barriers, govt policies amongst many others. A good predictive model can be developed to assess the viability of a new market even without execution. This is why we have sound business analysts.
The founders of Youtube created a startup to share videos, Google saw a potential for a great company. That’s is foresight. If you started a business that wirelessly charges a mobile device or developed an extremely cheap, scalable solar power. You have a potential Unicorn. You don’t necessarily need to have a business making money. Working towards perfecting your business model itself is money. Investors, finance the potential of a business, not reality.
Based on your response, it appears you have limited understanding about business, for this reason, I think having further conversation on this topic will be pointless. I’m out!
And you forgot the factor on which all these depend on: the ability of the founders. A thousand business analysts cannot cure bad or clueless leadership or execution.
And the various Google ventures that have crashed & burned nko? Why didn’t Google’s sighting of their potential turn them into unicorns?
Investors finance the potential of a business IF they’re convinced it can become reality.
