💸🔥 How we avoid wasting time on unprofitable projects

There are endless ideas one can implement, but time is limited. So we have to pick wisely.

After I switched from my agency business (with 30 employees) to my SaaS business (with 0 employees) I nearly make the same profit ($ 32K monthly) but without all the stress, headache, responsibilities, organizational tasks, and constant effort.

Choosing the right business model and project idea is the most important step with the greatest impact on your career as a founder. And because my co-founders and I discuss new business ideas regularly, I realized, that we need a systematic approach to drop unsuitable ideas quickly.

So, based on my past experience, I’ve set up 7 criteria, which every idea needs to pass. I will not continue any project that fails one of those points. This way we go through a more structured process and don’t get caught in the initial euphoria of a new possible project. Evaluating an idea without getting caught up with details is not easy. That’s why I came up with those 7 rules which always keep us on track.

Disclaimer: Business ideas contradicting the following rules can certainly be successful as ideas like Airbnb made it to the top of the game. But these ideas would be dropped according to my criteria. Our aim is not to find revolutionary business models and grow a unicorn but to bootstrap passive income-generating solutions.

📈 Has product-market-fit been proven by something similar?

Having a brand new idea or business model can be great and probably has the chance to become a billion-dollar project. But let’s be honest... the chances are very, very low. If nobody on earth could prove product-market-fit with a similar idea yet, I would not try it. I am not saying, that you should just copy an existing product. But you could take an existing product, tweak it, improve it and apply it to a new niche. You could for example copy a SaaS which has been developed for enterprise customers and optimize it for smaller teams or a different (geographical) market.

💼 Is it B2B?

This is a really simple one. Being successful with a digital B2C product is more difficult and most likely requires bigger amounts of investment in marketing until it starts generating revenue. Another alternative would be C2C, but here you got the same problem. Marketplaces often require big investments to kick off, because both parties need to become active on the platform at the same time, fast. Otherwise, the other party will jump off quickly.

Another major reason why I chose only B2B ideas: Companies got a lot more money and are ready to invest it. That's how companies grow their business. None-business clients are very picky, are paying less, and often demand more support, which means more headaches for you.

⌛ Can the MVP be developed within ≤ 3 Months (MAX)?

Every project has the risk of failing. Most of your projects will fail. That's the harsh truth. Keeping that in mind, you should favor ideas that can be validated quickly. 3 Months is the time that I am willing to pay to validate a promising idea. This way I can potentially launch 4 projects a year and increase the chance of succeeding with at least one of them.

🧑‍💼 Can it be managed without employees?

To scale a business it is often necessary to hire employees at some point. But I prefer ideas that do not require employees, at least not in the early stages. After running a software agency with more than 30 employees I have decided to ditch business models, which require having employees in the early stage. Having the right skills to manage a team efficiently is something, that not many of us have. Hiring employees means having a lot more responsibilities, organizational workload, and emotional connections, which can be a burden. As a single founder or a small team of co-founders, you have less time spent on meetings, discussions, and explanations. Onboarding employees bring on overhead that costs valuable time and money that is rare in the early stages of a startup.

📞 Can it work without doing active sales?

I personally don’t enjoy doing manual / active sales. Pitching a product to a business by cold calling or emailing without automating the full process does not feel right to me. Especially if you don’t have any employees. Some product ideas require you to do this and can not survive by just doing marketing. So I decided to ditch these kinds of product ideas for myself. I would probably think this over if I would have a co-founder who is highly skilled in doing this kind of sale.

But as long as that is not the case, I would rather prefer having a product idea, which can be marketed through SEO, social media, and paid ads.

❤️ Can I identify myself with the product?

The chances are pretty high that you will have some sleepless nights working on your product while being completely desperate and pessimistic. To survive these phases of your project you need to have a connection to the product. You should be proud of the idea when telling someone about it. If it is purely about the money you will give up during your low. Being motivated usually boosts my productivity to > 10X. And that matters a lot. Seeing continuous progress with your business reduces the risk of giving up at some point, as you might feel stuck and get pessimistic otherwise.

🔥 Can it be built with Firebase?

It is no secret that I love Firebase. We’ve just achieved $384K ARR with our SaaS Aplano and it is completely built on Firebase. You can check out my last article about our journey here.

By using Firebase, I am able to build and validate products insanely fast, without the hassle of managing a dedicated Backend. After coding many apps with- and without Firebase, I realized, that the advantages overweigh heavily. The combination of Firebase Realtime Database and Firebase Cloud Functions makes it possible to implement a huge range of different applications in a short time. In case an idea requires an SQL database and therefore can not be realized with Firebase, I just drop it.

I hope these points will be valuable to you and help you invest your time in the right projects. As I said, these rules don’t apply to everyone. Make sure to take your own preferences and goals into account.

If you want my advice or opinion about your product idea, just drop me a comment and I will give you my honest feedback!

And don’t forget to follow me on Twitter 😎

@gregorian000