Truly Great Questions: Level 1
A friend recently asked how we size up opportunities so fast. My answer? After years of building, investing, and advising, we have honed our ‘Truly Great Questions’, a quick way to understand any business, deeply and strategically. We’ve split them into two levels: Level 1 is for clarity; Level 2 is for conviction. This post dives into Level 1; I’ll share Level 2 in another post soon.
The 5 Questions We Use to Understand a Business Fast
Regardless of whether you are founder funded or want to bring on investors, here are five questions every founder or CEO should be able to nail:
Who are you selling to?
What are they buying?
Why you?
How will you profitably and sustainably deliver on that promise?
How do you measure success?
Why These Questions Matter
They look simple on the surface, but if answered well, they address some of the most important issues for a business and forces you to focus on what actually drives success. Let’s unpack them:
1. Who are you selling to?
Your ICP (Ideal Customer Profile), and their motivations, pains and context.
2. What are they buying?
Why does it matter, and what outcome or benefit are they really paying for?
3. Why you?
What makes your offering unique? Highlight your USP (unique selling proposition) or differentiator for your ICP.
4. How will you profitably and sustainably deliver on that promise?
Consider your business model, costs, revenue streams, cash flow, and importantly, the ‘moat’ you’re building towards.
5. How do you measure success?
What are the key metrics that demonstrate improving performance, like unit economics, customer retention, or growth rates?
What’s Next?
Level 1 is the foundation, a quick way to understand any business, deeply and strategically. I’ll share a separate post with the Level 2 questions, how we (as long term investors) think about markets, moats, and long-term value.