The #1 question I ask myself before starting any new side project idea or startup venture: “Is this increasing in relevance?“
This has some questions to consider within it:
- Is the market growing, or is it shrinking?
- Is this idea increasing in popularity and use, or shrinking in popularity and use?
- Is this idea part of a larger upward trend or growing sector?
- Is this idea likely to become the new default way things should be done in its particular space?
- Will this still be increasingly relevant in 5-10 years?
Examples of sectors that are increasing in relevance:
|Increasing in Relevance||Current or Declining|
|Cloud Computing/Serverless||Dedicated hardware/On-premise|
|Green Businesses||Ignoring environmental impacts|
|Natual/Healthy Ingredients||Manufactured/Processed Ingredients|
This question forces you to think and look long-term about the business idea you are thinking about investing the next few years of your life into. It could save a lot of future headache.
If you are shooting for a large success or high growth, make sure your business idea is increasingly relevant. Even if you are just shooting for a modest success, it helps to swim with the current instead of against it.
When is it okay to ignore this rule?
Sometimes it’s okay to ignore this rule – when you think the opportunity is large enough to justify the small or potentially shrinking market. For instance, physical retail might be declining over time, but there may be a unique opportunity to setup a seasonal popup shop or something like that to make some quick money if you enjoy that type of business.
This is a personal decision, because this means you will be chasing after a market that is not growing or has stagnated. Sometimes there is so much value still left on the table and such a large opportunity that you want to go for it anyways. That is fine, but it will mean an effective hard cap on your future earnings. You just have to be comfortable with making this trade-off, and know what you are getting into. If the opportunity still offers the possibility of a life-changing business with a good profit margin for at least the next 5-10 years, it may still be worth it.