The four topics founders often overlook
Founders need to dig deeper into these crucial areas before taking the plunge.
It's easy for even the most diligent founders to miss hidden pitfalls. These are the four often-overlooked diligence areas founders miss that could make the difference between fleeting hype and enduring success.
Past & present competition: Know the whole playing field and why others faltered or thrived. Most of this knowledge can only be found in the brains of people who have built in your space before. Find them and talk to them.
(True) TAM: While it's tempting to show huge numbers (e.g. B2B payments: $2T!), it's not about total category spend, but how much revenue your business can actually capture. TAM = total number of potential customers x average revenue per customer.
Buyer dynamics: Identifying a problem isn't enough, you need to know how important that problem actually is. Find out who holds the purse strings, what drives their purchasing decisions, and how high on their priority list fixing this problem actually is.
Financial outlook: Long-term gross margins & operating margins matter. These metrics define your sustainability & true value. Understand what margins look like in your sector, how they’ll evolve over time, and plan accordingly.
Committing years to starting a business is a serious decision. Don't just check the box on these topics, but dive deep to ensure your business is viable and worth your time.