business-idea-evaluation

name	business-idea-evaluation
description	Evaluates business ideas using Lean Canvas, unit economics, moat analysis, and structured risk assessment to produce a Go/No-Go recommendation. Trigger phrases: "evaluate this business idea", "is this idea viable", "should I build this", "business model analysis", "startup idea feedback", "lean canvas for". Do NOT use for existing business operations, financial accounting, marketing execution, or competitive intelligence on established companies — prefer `competitor-teardown` or `market-research` for those.
license	Apache-2.0
compatibility	{"clients":["openai-codex","gemini-cli","opencode","github-copilot"]}
metadata	{"owner":"codex","domain":"business-idea-evaluation","maturity":"draft","risk":"low","tags":["lean-canvas","unit-economics","startup","business-model","moat","risk-assessment"]}

Purpose

Systematically evaluate a business idea's viability using the Lean Canvas framework, unit economics estimation, competitive moat analysis, and multi-dimensional risk scoring to produce an evidence-based Go/No-Go recommendation with clear next steps.

When to use this skill

• User presents a business idea and wants structured feedback on viability
• User asks whether they should build or invest in a product/service concept
• User needs a Lean Canvas, business model analysis, or unit economics estimate
• User wants to compare two or more business ideas against each other
• A project is at the "should we build this?" stage and needs a decision framework

Do not use this skill when

• The business already exists and the question is about optimizing operations or growth — that is execution, not evaluation
• The user needs competitive intelligence on specific companies — prefer competitor-teardown
• The request is about market sizing or industry trend analysis without a specific idea — prefer market-research
• The user needs financial modeling, bookkeeping, or tax analysis — prefer financial-tracker-ops
• The user wants to write a full business plan document (this skill produces an evaluation, not a plan)

Operating procedure

Phase 1 — Idea intake and clarification

1. Extract or ask for the core elements of the idea:
   • What is the product/service? One-sentence description.
   • Who is the customer? Specific segment, not "everyone".
   • What problem does it solve? Existing alternatives the customer currently uses.
   • How does it make money? Revenue model (subscription, transaction, advertising, licensing, etc.).
   • What stage is this at? Napkin idea, validated problem, prototype, or early revenue.
2. If the user cannot articulate the customer or problem, flag this as a critical gap before proceeding.

Phase 2 — Lean Canvas construction

3. Build a complete Lean Canvas (Ash Maurya's adaptation of Business Model Canvas):

   Block	Question to answer
   Problem	Top 3 problems for the target customer. List existing alternatives.
   Customer Segments	Who specifically has this problem? Early adopters vs mainstream.
   Unique Value Proposition	Single clear sentence: why is this different AND worth paying for?
   Solution	Top 3 features that address the top 3 problems.
   Channels	How will you reach customers? (Content, paid ads, partnerships, sales, virality)
   Revenue Streams	Pricing model, price point, who pays.
   Cost Structure	Fixed costs, variable costs, key cost drivers.
   Key Metrics	The 3-5 numbers that determine if this business is healthy.
   Unfair Advantage	What cannot be easily copied or bought? (Be honest — most ideas have none yet.)

4. Flag any canvas block where the answer is vague, assumed, or "TBD" — these are validation priorities.

Phase 3 — Unit economics estimation

5. Estimate the following metrics (use ranges if exact numbers are unavailable):
   • Customer Acquisition Cost (CAC): Estimated marketing + sales cost to acquire one paying customer. Break down by channel if possible.
   • Lifetime Value (LTV): Average revenue per customer × gross margin × average customer lifespan. For subscription: (ARPU × gross margin) / monthly churn rate.
   • LTV:CAC ratio: Target is ≥3:1 for a sustainable business. Flag if <2:1.
   • Payback period: Months to recover CAC from a single customer. Target <12 months for bootstrapped, <18 months for funded.
   • Gross margin: Revenue minus direct costs of delivering the product/service. Software should target >70%; services typically 40-60%.
6. State all assumptions explicitly. Mark each estimate with a confidence level: High (based on data or close comparables), Medium (reasonable inference), or Low (educated guess).

Phase 4 — Moat analysis

7. Assess each potential moat type and rate as None / Weak / Moderate / Strong:
   • Network effects: Does the product become more valuable as more people use it? (Direct: social networks. Indirect: marketplaces.)
   • Switching costs: How painful is it for a customer to leave? (Data lock-in, workflow integration, retraining cost.)
   • Scale economies: Does unit cost decrease meaningfully with volume? (Server costs, content amortization, supplier leverage.)
   • Brand: Is there a trust or recognition advantage that takes years to build? (Typically irrelevant for new ideas.)
   • Regulatory/legal barriers: Licenses, patents, regulatory approvals that block competitors. (Don't confuse regulation with moat — regulation can also block you.)
   • Proprietary technology/data: Unique algorithms, datasets, or IP that competitors cannot replicate easily.
8. If no moat exists today, assess whether one can be built over time and what it would take.

Phase 5 — Risk matrix

9. Score each risk dimension 1-5 (1 = low risk, 5 = critical risk):

   Risk type	What it means	Key questions
   Market risk	Will anyone pay for this?	Is the problem validated? Is willingness to pay confirmed?
   Execution risk	Can the team build and deliver it?	Does the team have the skills? What are the hard technical challenges?
   Technology risk	Can it be built at all?	Are there unsolved technical problems? Dependency on immature tech?
   Regulatory risk	Could regulations block or constrain this?	Industry-specific compliance, data privacy, licensing requirements?
   Competitive risk	Can incumbents or well-funded startups crush this?	How fast can a competitor replicate this? Are there funded players?
   Financial risk	Can this be funded to sustainability?	Runway requirements, capital intensity, path to profitability?

10. For any dimension scored ≥4, write a specific mitigation strategy or acknowledge it as an unresolved blocker.

Phase 6 — Comparable analysis

11. Identify 3-5 comparable companies or products:
    • Direct comparables: Companies that tried to solve the same problem for the same customer.
    • Adjacent comparables: Companies in adjacent markets or solving analogous problems for different customers.
    • Cautionary comparables: Companies that tried something similar and failed — analyze why.
12. For each comparable, note: outcome (success/failure/pivot/acquired), business model, funding raised, key differentiator from the idea being evaluated.

Phase 7 — Go/No-Go scoring

13. Score the idea across 8 weighted dimensions:

    Dimension	Weight	Score (1-5)
    Problem severity & frequency	20%
    Market size & accessibility	15%
    Unit economics viability	20%
    Moat potential	10%
    Execution feasibility	15%
    Competitive landscape	10%
    Risk profile	5%
    Founder-market fit	5%

14. Compute weighted score. Interpretation:

    • 4.0-5.0: Strong Go — pursue aggressively, focus on execution.
    • 3.0-3.9: Conditional Go — viable but has specific risks to mitigate first.
    • 2.0-2.9: Weak — significant concerns. Recommend pivoting or shelving unless specific conditions change.
    • 1.0-1.9: No-Go — fundamental viability problems.

15. A single dimension scored at 1 is an automatic flag regardless of composite score.

Decision rules

• Problem before solution: If the user leads with a solution and cannot articulate the problem, force problem articulation first. Solution-first ideas fail at higher rates.
• No assumed virality: If the growth model depends on virality, require evidence (comparable viral coefficients, inherent shareability mechanics). "People will share it because it's cool" is not a growth strategy.
• Customer validation beats logic: A logically sound idea with zero customer evidence scores lower than a messy idea with paying customers or strong intent signals.
• Honest moat assessment: Most early-stage ideas have no moat. Saying "no moat yet, but here's how to build one" is more useful than inventing a moat that doesn't exist.
• Revenue model required: If the user says "we'll figure out monetization later," flag this as a critical gap. Evaluate based on the most likely revenue model, but note the uncertainty.
• Beware of TAM fantasies: "If we capture just 1% of a $50B market" is not a market sizing strategy. Demand bottom-up sizing: specific customers × realistic price × achievable penetration.

Output requirements

Deliver all of the following as separate, clearly labeled sections:

1. Idea Summary — Restated idea in one paragraph, confirming understanding.
2. Lean Canvas — Complete 9-block canvas with flagged gaps.
3. Unit Economics Estimate — CAC, LTV, LTV:CAC, payback period, gross margin with assumptions and confidence levels.
4. Moat Assessment — Rating for each moat type with justification.
5. Risk Matrix — Scored risk table with mitigation strategies for high-risk dimensions.
6. Comparable Analysis — 3-5 comparables with outcomes and lessons.
7. Go/No-Go Score — Weighted score table, composite score, interpretation, and automatic flags.
8. Next Steps — 3-5 specific, actionable next steps ranked by impact and urgency. If Go: what to validate first. If No-Go: what would need to change.

Anti-patterns

• Solution-first thinking: Building a product then searching for a problem. The evaluation must start with the problem and customer, not the technology or feature set.
• Ignoring unit economics: "We'll make it up in volume" is a red flag, not a strategy. If the unit economics don't work at small scale, they rarely work at large scale either.
• Assuming virality: Baking viral growth into the base case without evidence. Viral coefficients >1.0 are extraordinarily rare. Treat virality as upside, not baseline.
• No customer validation: An idea that has never been discussed with a real potential customer is an untested hypothesis, not a business. Score it accordingly.
• TAM-down market sizing: Starting with a massive market and assuming a tiny slice. Bottom-up sizing (specific reachable customers × realistic conversion) is the only credible approach.
• Ignoring competitor dynamics: "No one is doing this" usually means either the market doesn't exist or you haven't looked hard enough. Investigate existing alternatives thoroughly.
• Conflating idea quality with execution ability: A great idea executed poorly fails. Assess the team's ability to execute, not just the idea's theoretical merit.
• Single-scenario planning: Presenting only the optimistic case. Always include a realistic case and a pessimistic case for key metrics.

Related skills

• competitor-teardown — Deep-dive competitive analysis for companies identified in the comparable analysis
• market-research — Broader market sizing and trend analysis to contextualize the opportunity
• domain-scouting — If the idea passes evaluation, find a name and domain for it
• financial-tracker-ops — Ongoing financial tracking once the idea moves to execution

Failure handling

• If the user provides only a one-line idea with no context, ask clarifying questions (customer, problem, revenue model) before attempting evaluation. Garbage in, garbage out.
• If unit economics cannot be estimated even roughly (no pricing model, no comparable data), mark the Unit Economics section as "Not estimable — insufficient data" and explain what information is needed.
• If the idea is in a regulated industry the agent has no knowledge of, flag regulatory risk as "Unassessed — specialist input required" rather than guessing.
• If the user asks to evaluate more than 3 ideas at once, recommend evaluating them sequentially with full rigor rather than doing shallow passes on all of them.