by Professor Doug Villhard

My office hours fill up weeks in advance with students (who are not even in my classes) waiting to ask me one question: “Doug, will my startup idea work?”

My short answer is, “Who cares what I think? What do your target customers think?”  

And most often the student’s answer is, “Well, I haven’t shown it to anyone else yet. Please, just tell me if it will work.”

But, I just won’t do it.

And one time I mentioned at a dinner party that I teach entrepreneurship and someone said, “Oh, so you’re in the business of telling people their babies are ugly.”

I don’t do that either.

Only the potential customers for a startup idea can answer the question of whether the startup will work or not. I’m telling you (including all those with future office hours scheduled with me), “My opinion really doesn’t matter.”

But still, the office hours get booked.  

However, what I will do is refer you to what is affectionately known as “Doug’s Litmus Test.” It’s a self-test that you can administer against your own idea. It was inspired in large part by Bart Hamilton—my professor when I was at WashU.

It goes like this:

Doug’s Litmus Test: An Outrageously Successful Startup Idea Needs 5 Things:

  1. To solve a significant problem (for a large number of customers)
  2. In a market that is growing
  3. By a founder with “personal familiarity” (to the market and the problem)
  4. With a unique, hard-to-replicate, ever-evolving, and scalable solution
  5. And a recurring revenue model that is recession and pandemic proof

“Finally,” my students will say to me. “That’s what I needed.” And they run off to take the test. But in very short order they will book a follow-up meeting with me.  

And that always goes the same way.

They come in, dejected. “My idea fails your test. So I guess I should bag it?”

I say, “Before you do, apply my test against any famous and outrageously successful company. Try McDonald’s, Starbucks, Netflix, Facebook, etc.”

And when you do that, the truth is…they all fail my test. Only the biggest ones get very, very close. But they all fail some aspect of it.

McDonald’s doesn’t have a pure recurring revenue stream. Starbucks isn’t the only company that makes coffee. Netflix isn’t the only streaming service. Facebook’s main revenue model is nonrecurring advertising, often tied to small businesses that are not recession-proof.

My Litmus Test isn’t something you “pass.” It’s something you aspire to. Frankly, only a monopoly, like an electric company, could actually pass it.

Instead, for each of my five points, ask yourself simply how you can improve in those areas. And then, once you have better ideas for each point, the final step…is still not to ask me if it will work!

Because I’ll just give my original answer back to you.

“Go ask your target customers what they think, and in volume.”  

I can teach you what an outrageously successful company must have. But only your potential customers can really tell you if you really have it or not.

And I’ll tell you one more secret.

Do you know how I can tell if you’ve really spoken to customers before you next come to see me?  

Your idea will change.  

And if you’re not quite sure which customer to talk to first, well, what the heck.  Come see me.  You never know.  Maybe I’ll be your first customer.

Doug Villhard is WashU Olin’s Academic Director and Professor of Practice for Entrepreneurship. He’s also the Co-Founder of SportsHuddle (now called MaxPreps and owned by CBS), Co-Founder of Second Street (now owned by Upland Software), Co-Founder of Father McGivney Catholic High School in Glen Carbon, Il, and an investor in numerous WashU alumni and student startups.