020: The biggest problem in startups remains unsolved

"I know a good startup idea when I see it" works for a lucky few; the rest of us need a toolkit

Startups with customers face different challenges than startups with no customers — but conventional startup strategies don’t make this distinction. There’s no Playbook A for startups with customers and Playbook B for startups with no customers. Even The Lean Startup, one of the canonical texts of conventional entrepreneurship, begins with the premise that the author’s startup had customers: “We really did have customers in those early days.” (Eric Ries on Page 4)

Conventional entrepreneurship strategy has a glaring gap. Today, there’s no single resource dedicated to quickly determining (in days!) whether a startup idea is an opportunity worth pursuing. There’s no straightforward way to distinguish between ideas where success is possible versus ideas where success is doubtful. So founders often waste a year or more pursuing a startup idea before giving up.

This is the most important problem in entrepreneurship because it’s the most common problem: more founders face this challenge than any other. This is also the most limiting: until a founder can identify a meaningful opportunity, all of their other work (building prototypes, recruiting team members, etc.) is likely wasted effort.

If evaluating startup ideas truly is the biggest problem in entrepreneurship, then why does this challenge even exist? Why hasn’t this been solved by now? After all, so many of the world’s greatest entrepreneurs have written extensively about their approaches to startups, such as Marc Andreessen’s blog and Ben Horowitz’s “The Hard Thing About Hard Things” and Peter Thiel’s “Zero-to-One”. Why can’t founders just use these playbooks?

I believe that, by definition, the most successful founders inherently have spent very little time working on bad ideas. In other words, if successful founders had been distracted for years working on bad ideas then they wouldn’t have had the time to be successful. They’re not well-versed in the challenge of wasting time on bad ideas.

Additionally, I believe that the most successful founders have an innate ability to evaluate a startup idea that most of us lack. When I’ve talked with some of these special founders they told me their evaluation method is: “I know it when I see it.” And this actually works for them! Unfortunately, this gut-feel approach doesn’t work for the rest of us, the majority of founders. To be clear, our limitation isn’t our lack of innate ability -- it’s our lack of toolkit. It’s like the difference between the lucky few who have 20/20 vision and the rest of us who wear glasses. It’s not that we can never see; we just need the right tool — and without it we stumble around and get hurt. Most of us lack “20/20 vision” for startups so applying “I know it when I see it” results in frustration and 1+ years of wasted effort.

I found a great parallel in YouTube cooking videos. For a while, I followed celebrity chefs who said to ‘get the pan hot’ and ‘season to taste’ -- instructions that work for them because they have an innate ability. For me, their recipes failed because I’m normal -- I don’t have innate cooking ability. Another instructor, Helen Rennie, articulates the challenge perfectly:

“They are trying to teach you to make pasta … by touch and feel. Think of these chefs as native speakers of pasta. Intuitive pasta making is not for people learning from books and screens. You need a lot of details and accurate measurements if you want to make quick progress.”

The gut-feel and innate ability of the most successful chefs has a direct parallel with the most successful entrepreneurs. When Paul Graham tried to articulate his innate ability to identify good startup ideas, he said:

“I seem to have some sort of internal compass that helps me out.”

Most founders lack that internal compass, that innate ability, that gut feel. Instead, we need details and measurements. And this is my goal with Nascent methodology™ -- a playbook for founders of startups with no customers to measure their idea in dollars and drive decisiveness in days. Essentially, Nascent allows you to take an idea for a startup and boil it down to a few core metrics like the ERNY value™ (Estimated Revenue Next Year) to get a sense of whether success is doubtful or possible. All without writing a single line of code, without building any product. I’ll be discussing the mind-shift and mechanics of Nascent over the coming weeks.

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As of 2026, I’m publishing a few ideas at a time from Nascent methodology in regular podcast episodes. This is the companion newsletter that summarizes the podcast. For a deeper dive, check out the podcast on Spotify / Apple Podcasts / YouTube.