Startup 101: Is Your Business Idea Worth Pursuing?

We’ve all had that moment: an idea pops into your head, and you think, This is it. I’m going to make millions! Maybe it’s a product you desperately need, a gap in the market you’ve noticed, or something you’re sure would be perfect for your town. As people, we’re naturally creative and great at identifying problems. But how do you know if your idea can stand the test of reality and become a sustainable business?

Here’s the thing: having an idea is the easy part. Figuring out if it’s a good idea takes work—but not the kind of work that requires quitting your job or taking out a loan. The first steps are all about low-risk research.

Step 1: Start at Your Desk

The internet is your best friend in the early stages. Check if your idea already exists. Are there similar businesses out there? If so, how are they doing? Is the market saturated, or is there room for a fresh approach? If your idea has already been tried and works, ask yourself: Can I do this better, cheaper, or in a unique way?

Next, run some basic cost and revenue projections. Even if you’re not a numbers person, sketch out how much it might cost to start and what kind of sales you’d need to make it worthwhile. If the math doesn’t add up, it’s better to find out now than after you’ve sunk time and money into it. Bonus points for estimating realistic projections. Everyone thinks their idea addresses a $1B market, but it rarely, rarely does.

Step 2: Ask the Right Questions

One of the most important questions to ask yourself is: Why hasn’t anyone done this yet? The odds of being the first person ever to think of a particular idea are slim. If your idea doesn’t already exist, there’s often a reason. Maybe the startup costs are too high, the target audience isn’t there, or the logistics are more complicated than they appear. It’s crucial to dig into this question during your research.

Take Napa Valley, for example. Starting a sparkling wine business there might seem like a fantastic idea—there are so few producers in the region, and it feels like an obvious gap in the market. But deeper research reveals why it’s not more common. Sparkling wine production requires significant time, specialized equipment, and considerable upfront investment, all of which come with high risks—especially in a place as expensive as Napa. You’d need a high risk tolerance and substantial financial resources to make it work.

On the flip side, consider what I like to call the coffee shop problem. Imagine your town started with just one coffee shop. At first, it was doing okay, then it became wildly popular, to the point where there wasn’t enough space to accommodate everyone. Someone saw the demand and decided to open a second coffee shop, which also became jam-packed. Then, a bunch of new coffee shops popped up that were just okay, and after a few years, a lot of them closed.

The demand is there, sure—but is the market saturated? Will this trend hold, or is it temporary? If you’re entering an already crowded space, how will you set your business apart? Will you be a “me too” business, blending into the crowd, or can you offer something truly different that makes you the choice in a saturated market?

These are critical questions to answer. Ask yourself: What will make my business stand out? Whether it’s a unique product, exceptional service, or a creative twist on a classic idea, differentiation is key. Without it, even a seemingly successful industry could turn into a competitive minefield where only the standout players survive.

By tackling both sides of this argument—the “why hasn’t this been done?” and the “how will I stand out?”—you’ll position yourself to make more informed, strategic decisions about your business idea.

Bonus points for honestly answering these questions. Too often we think, "They could not make it work, but I will." I caution against thinking you are special or more capable than anyone that has come before you in business, because we all regress to the mean in the end. Take into account if you genuinely have differentiated knowledge, experience, or capabilities, which will allow you to make something work that other have not.

Step 3: Fail Fast

Once your idea passes the desk-research stage, it’s time to test it in the real world—quickly and cheaply. This is what people in the startup world mean by “failing fast.” Put something out there to see if it sticks.

Like LITERALLY start the smallest and fastest way possible. I have seen people launch brands without having any real products, get real paying customers, and only then do they make the products that were ordered. Seems a little backwards, but you want to ensure people are willing to put money down for your product before you invest a lot of time and energy creating it.

A more palatable example comes from the startup I worked at. The owner didn’t dive straight into opening a brick-and-mortar retail store after he completed his desk research. Instead, he started with pop-up shops. These pop-ups gave him a chance to see if people would show up and buy the product, while also learning what equipment, staffing, and systems were necessary (without ever signing a lease or making a major investment). The pop-ups sold out every time, proving there was robust and sustainable demand, which led to the eventual brick and mortar location.

Failing fast doesn’t mean setting yourself up to fail. It means testing your idea on a small scale to minimize risk. If it doesn’t work, you haven’t wasted too much time or money. If it does work, you’ve learned valuable lessons you can use to move forward.

Step 4: Test the Lifestyle

Starting a business isn’t just about the idea—it’s about the lifestyle. Being an entrepreneur is hard. It might mean trading down to a smaller apartment, missing holidays with your family, not having time to paint or play video games. Ask yourself: Am I willing to live this life?

For example, let’s say you have the idea to start a port-a-potty business in your area. On paper, it seems great—steady demand, decent profit margins, and a service that’s always needed. But then you realize the lifestyle that comes with it: dealing with sewage, managing logistics for heavy equipment, and handling the unique challenges of waste management every day. Are you prepared to make that your life?

For some people, the answer is yes—and that’s fantastic! If you’re all in, run with it. But if the thought of handling port-a-potties day in and day out makes you cringe, it might not be the right fit, no matter how good the numbers look.

The point is, you don’t want to invest time, energy, and resources into a business only to discover you can’t stand the lifestyle it demands. If possible, find ways to test the lifestyle first. Shadow someone in the industry, talk to business owners, or get a temporary job in the field. This will give you a clearer picture of what running that type of business really entails.

The last thing you want is to end up in a business that’s successful on paper but miserable in practice. Make sure it aligns with the life you want to lead.

Final Thoughts

Starting a business is exciting, but it’s also a big leap. It’s easy to get caught up in the thrill of inspiration and rush to dive in, but taking the time to thoroughly vet your idea and test it in the real world can save you from costly mistakes.

A great resource that helped shape my perspective on this is the book All In Startup by Diana Kander. She uses the concept of solving a “migraine problem” instead of just a “headache problem.” The idea is that a successful business addresses a significant, painful need—a problem so critical that people are eager to pay for a solution. While not every idea needs to tackle a migraine-level problem, this mindset encourages you to dig deeper and ensure your business idea meets a real demand and stands out in the market.

So, whether you’re at the research stage, prototyping, or testing the lifestyle, remember: take the time to ask the hard questions, validate your idea, and prepare yourself for the entrepreneurial journey. Building a business isn’t just about creating something—it’s about creating something meaningful, sustainable, and aligned with the life you want to lead.

Don’t be afraid to start small and adapt as you go. Success doesn’t happen overnight, but with careful planning and a willingness to learn, you’ll give yourself the best chance to create something truly lasting.