A Paradigm Partner’s Research Checklist for Early-Stage Projects

A Paradigm partner: How should you research early-stage projects? Founders At an early stage, the constant in the equation is usually the team. Ask founders about their strengths, weaknesses, and so on. Then ask yourself: would I work with this person? If so, that is a bullish signal. Size the opportunity Consider the market’s size today and theorize about how large it could become. Think ambitiously in making your projections. Use the product If a product exists, use it. Everyone knows this, but the step is often skipped. Experience it firsthand and understand its value proposition and offering. Founders also benefit from investors who understand and use their products. Talk to users Ask users: how did you hear about the product? What did you use before? How does it compare with alternatives? What do you think of the return on investment and value? What would make you leave? Data analysis Analyze key metrics such as growth and drop-off rates. Compare monthly or quarterly growth with competitors. Why now? Many ideas have been tried before; think of how many kinds of products we have already seen. Timing is critical. Work out why earlier attempts failed, and consider what is different now. Competition in the space Identify the biggest competitors and what makes this project different. Consider the moat they are building today and how it can expand. If they are not the market leader, write a report explaining why they will become one, or why this is not a winner-take-all market. Return calculations Sixth sense Sometimes you can skip steps 1->10, because a decision may need to be made faster than you expect. Be flexible with the analysis and prioritize. Above all, do not underestimate your intuition. Caseykcaruso, Paradigm partner