9 Rules For Choosing a Business
By Anna Johnson on March 25th, 2009I recently came across some interesting ‘rules’ for choosing a business. They’re the 9 business selection criteria used by serial entrepreneur and co-CEO of OLX, Inc. Fabrice Grinda.
OLX, Inc. is a free classified site. Fabrice previously founded Zingy, Inc. a major provider of ringtones, games and applications for mobile phones (no longer in operation), and Aucland, one of Europe’s top auction sites.
Fabrice says he uses these 9 rules to help him decide which businesses to create, invest, buy or join because he lacks creativity to come up with brilliant new ideas.
Although Fabrice says he isn’t creative, I reckon his list of criteria is instructive for anyone wishing to choose a business, creative or not.
Here’s a summary of what Fabrice looks for in a business (he explains his rules in more detail here):
- A $1 billion (or more) addressable market.
- A valid, easy to understand business model.
- The business does not require more than $2 million in seed funding, or $15 million in first round venture capital.
- The potential to be one of the top players i.e. in the region or niche the business is targeting.
- A scalable idea.
- Little or no risk of suppliers and/or customers compressing margins or doing business directly together.
- A rapidly growing market.
- An idea Fabrice can (or can learn) to execute on.
- An idea Fabrice likes and wants to do.
So there you have Fabrice’s 9 rules for choosing a business… what are yours?
Source: Fabrice Grinda, “9 Business Selection Criteria,” Fabrice Grinda: Musings of an Entrepreneur
