DECIDING IF A NEW BUSINESS WILL WORK
“margin, feasibility, advantage, lifestyle, timing, opportunity cost. check all six.”
The Lesson
Six things to evaluate before starting a business. (1) Margin: if it's not 5-10x between cost and price, stop. Low margins mean too much competition. (2) Feasibility: can you get the resources, people, and timing? (3) Strategic advantage: what's special about YOU that gives you an edge? (4) Lifestyle: if it works, do you want this life? Don't trap yourself in profitable hell. (5) Timing: almost every failure and success comes down to timing. (6) Opportunity cost: what else could you do with that time? Look for businesses with low individual success probability but infinite growth potential if they work. I like to do many small bets with huge upside rather than one big bet.
Real-World Example
A founder evaluates a new SaaS idea. Margin: subscription model, 80% gross margin. Check. Feasible: can build MVP in 3 months. Check. Advantage: deep domain expertise competitors lack. Check. Lifestyle: can run it remotely. Check. Timing: market just waking up to the problem. Check. Opportunity cost: would delay other project by 6 months, but upside is higher. Check. All six pass. They proceed.
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