What are the principles you follow when you are starting a new project/venture?

Here are my criteria:

• Long-term passion for the idea (I can imagine working on it and enjoying it every day for the next 5-10 years)
• Having the ability to build most of the product myself (i.e. not dependent on outside developers)
• High margin, high cash flow business (this probably applies to most software businesses, except for ones dependent on hiring a sales force to grow)
• Proven market with existing customers and competitors (I'm very risk averse, and would not build anything if there was any doubt that the market existed).
• A business model that has reasonable recurring purchases (e.g. not a one-time purchase or a hit-driven business)
• A business model that has reasonable customer lifetime value (to me, that means $100 or more)
• A business model that is highly scaleable (e.g. not a consulting or service business)
• A business model that has reasonable defensibility against competitors over time (e.g. barrier to entry, customer stickiness, accumulated competitive advantage)
• A business model that isn't dependent solely on one distribution channel (i.e. only the Apple app store, or a YouTube channel business)
• A key insight that I believe competitors are missing will make my product at least 2-3x better than the competition in a meaningful way.
• A small niche market that believe I can dominate to produce at least a 6-figure revenue number by bootstrapping
• Paths and options to grow beyond the niche market (e.g. to new customer segments or adjacent markets) to get to a 7 or 8 figure revenue number

Whatever I am pursuing needs to align with my core values in order for me to be able to believe in the venture. After that I apply systems thinking and first principles.

If I don't have fun in the process it's not worth it. I always choose something that I'm passionate about.

Uclusion is what I would call Fat Startup. We quit our jobs and take large risks to solve a problem we believe in. If tech can make software like Facebook that ends up appealing to the worst in us then it can also make software that appeals to the best in us.

That said most of the software I see people build on IH is equally high risk. Either people are pursuing a new idea and I don't think any amount of "validation" is going to lower the risk or they are refining an old idea and competition will be fierce. We might all feel more comfortable telling ourselves we've somehow mitigated the risk and that's fine but the reality is the field is crowded and the risk of wasting effort high.