When I started my startup, I was sure it would work—until reality hit. Biggest lesson? Assumptions don’t pay bills. We chased users, assuming revenue would follow. But I saw other startups fail that way. So, we tested early with a small paid feature—and people paid. That’s when I realized: traction means customers, not just users. Another mistake I nearly made was clinging to the original plan. The best companies aren’t those with perfect ideas, but those that adapt. We tweaked pricing, changed marketing, and kept testing. What worked? Validating early, adapting fast, and prioritizing sustainable growth over vanity metrics. An untested model isn’t the problem—sticking to it blindly is.

When evaluating a startup with an untested business model, I first identify the core assumptions underlying their approach. I look closely at the team’s ability to test these assumptions, learn from feedback, and pivot if things don’t go as planned. Market validation is key, I check for early signs of real customer interest or traction, and I assess whether the business can generate healthy unit economics as it scales. Ultimately, I prioritize founders who are adaptable, resourceful, and open to change, since flexibility and resilience are especially important when the path forward isn’t clearly proven.

Market Risk Size & Growth: Is the TAM (Total Addressable Market) large and growing? Customer Pain Point: Is the problem real, painful, and frequent enough for customers to pay for a solution? Adoption Uncertainty: Will customers change behavior to adopt this new solution? Business Model Viability Unit Economics: Are early signals of revenue vs. cost per customer promising? Scalability: Can margins improve with scale, or do costs scale linearly? Revenue Clarity: Is the monetization model clear (subscription, transaction, freemium → paid)?

It is about the team. Always. And the earlier the stage, the more that matters. I used to think that figuring out the product-market fit sooner was the key factor. Now, I believe in taking a leap of faith in a startup when you come across extraordinary founders, even when they don't have a track record. That is also true for companies working on something I had thought deeply about or wish I had done. VC investment at the pre-seed and seed stages is more art than science, so you must trust your convictions.

Startups with untested business models aren't risky because they're new. They're risky when founders don't know what has to go right. Start by identifying the one assumption the business depends on. Then ask: if that assumption turns out to be wrong, can the team adapt quickly? The real risk is not uncertainty. It's a team that can't learn fast enough.