Do you have an unfair advantage to compete in that space?
Figure out what your unfair advantage could be.
This simple framework will help you understand if you are well positioned to solve a particular problem. After a prioritisation exercise and clear articulation of your problem statement you should think about your ability to compete in that space over anyone else. Why would you be able to win? It is clear that the problem space you are focusing on will attract a lot of competitors - what is your unfair advantage to win?
Who could use this
This tool can be very useful for different entities in different points of time:
- An investor that is trying to understand a startup
- An entrepreneur thinking about his options
- A corporate whenever a team and deciding on how to tackle a particular problem
This framework will enable you to assess your ability to win and / or to set up a strategy that will enable you to increase your probabilities to succeed in a given problem space.
To assess your ability to compete and your unfair advantage you have to think through the following different components of the team that you are assembling:
- Team expertise
- Market growth
- CAC (cost of acquisition)
When you are thinking about your team experience and expertise is there something that gives them an unfair advantage to compete? Do they possess knowledge on that specific problem space that enables them to be far better than any competitor?
If the problem that you are chasing is in a market that is stagnating and not growing at all it will be harder to create have unfair advantage given that will be a slow problem space
While thinking about your product, especially if you already have one, you would have to compare it with the existing market solutions. How does your product compare? Is it 10x better than competitors in that space? If so, you do have an unfair advantage to compete in this space.
Customer acquisition is very important for any business, especially when you are starting out. Having a cost of acquisition close to zero is considered to have a big advantage. If, on the other hand you are dependent on marketing dollars to grow your customer base, despite the fact you have a good CAC / LTV indicator, you don’t have an unfair advantage.
Here you will find a slide example. Soon we will implement a feature for anyone to download all the tools that we are building.
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