Week 8 Day 1 — The Opportunity Gate
NST Entrepreneurship · Founder Lab
Week 8 — Day 1
WEEK 8 · DAY 1
THE
OPPORTUNITY
GATE
Is This Worth Solving?
YOU HAVE AN IDEA.
NOW PROVE IT DESERVES THE NEXT ₹1
AND THE NEXT 100 HOURS.
OPPORTUNITY INVESTMENT COMMITTEE
WEEK 8 · DAY 1
THE
OPPORTUNITY
GATE
Is This Worth Solving?
YOU HAVE AN IDEA.
NOW PROVE IT DESERVES THE NEXT ₹1
AND THE NEXT 100 HOURS.
OPPORTUNITY INVESTMENT COMMITTEE
EVERY YES HAS A COST.
= Cash Cost
+ Value of Best Alternative Forgone
EXAMPLE
200 founder-hours spent building the wrong product.
WHAT WAS THE BIGGEST COST?
NOT AWS.
THE 200 HOURS.
TIME IS CAPITAL.
WEEK 7 RANKED BETS.
WEEK 8 QUESTIONS THE BET ITSELF.
DECISION TOOLS
Decision Matrix
ICE = I × C × E
RICE = (R × I × C) / E
WINNING AMONG
THREE WEAK OPTIONS
DOES NOT MAKE
THE WINNER GOOD.
RANKING ≠ VIABILITY.
EXPECTED VALUE: FOUNDERS BET UNDER UNCERTAINTY
30% → ₹10Cr | 70% → ₹0
0.30 × ₹10Cr + 0.70 × ₹0
= ₹3Cr
EV DOES NOT MEAN YOU WILL RECEIVE ₹3Cr.
A · 30% × ₹10L − ₹50k = ₹2.5L
B · 80% × ₹2L − ₹50k = ₹1.1L
Higher confidence: B
Higher expected net value: A
HIGH CONFIDENCE ≠ HIGH-VALUE OPPORTUNITY.
SOMETIMES THE PRODUCT YOU NEED IS INFORMATION.
Potential build commitment
₹5,00,000
WTP belief
40%
Concierge experiment
₹10,000
EXPECTED VALUE OF SAMPLE INFORMATION
₹10,000 OF INFORMATION CAN PREVENT ₹5,00,000 OF STUPIDITY.
PROTOTYPE ROI MAY BE INFORMATION, NOT REVENUE.
EVIDENCE SHOULD MOVE PROBABILITY.
BEFORE
P(real problem) = 40%
Then 12 / 15 qualified customers independently describe the same painful workaround.
100
“Cool idea.”
5
₹499 PAID
INFORMATION VALUE ≠ SAMPLE SIZE ALONE
EVIDENCE THAT DOESN'T CHANGE YOUR BELIEF IS DECORATION.
A PERCENTAGE WITHOUT ITS DENOMINATOR IS DANGEROUS.
“70% CONVERTED!”
7 / 10 hostel friends · SELECTION BIAS
Sample A
2 / 3 = 66.7%
Sample B
200 / 300 = 66.7%
Same percentage. Very different confidence. Sampling uncertainty ∝ 1 / √n
WHO WAS SAMPLED? · HOW SELECTED? · WHAT IS n?
STARTUPS ARE SYSTEMS,
NOT AVERAGES.
Illustrative decision modelPain .9 · Reach .8 · WTP .7 · Retention .8
0.9 × 0.8 × 0.7 × 0.8
= 0.4032
WTP: 0.7 → 0.2
0.9 × 0.8 × 0.2 × 0.8
= 0.1152
Not 9 → 9.5. Attack the bottleneck.
SOME VARIABLES MULTIPLY. THEY DON'T AVERAGE.
WHY VENTURE CAPITAL LOVES OUTLIERS.
Illustrative portfolio₹100Cr FUND
20 investments × ₹5Cr
= ₹155Cr
₹100Cr / ₹155Cr = 64.5%
ONE COMPANY CREATED ~65% OF GROSS PROCEEDS.
CAN THIS SURVIVE? → IF THIS WORKS, CAN IT BECOME UNUSUALLY LARGE?
GREAT BUSINESS ≠ VC BUSINESS.
COMPANY A
₹8Cr annual revenue
₹2Cr profit
20% growth
Founder owns 90%
COMPANY B
₹1Cr revenue
−₹3Cr burn
150% growth
Large market · Strong retention
WHICH IS BETTER?
WRONG QUESTION. BETTER FOR WHOM? UNDER WHAT OBJECTIVE?
₹2Cr for 10% · illustrative 10× target → ₹20Cr proceeds → ₹20Cr / 10% = ₹200Cr company value
A GREAT OWNER-OPERATED BUSINESS IS NOT INFERIOR. DIFFERENT GAMES.
YOUR MARKET PUTS A CEILING ON THE STORY.
Realistic SAM / year
₹80Cr
Heroic capture
25%
Revenue / year
₹20Cr
CAN THIS SUPPORT EVERY POSSIBLE RETURN STORY?
No. Markets can expand. Pricing can change. Adjacencies can emerge.
YOUR RETURN STORY MUST BE MATHEMATICALLY COHERENT.
BIG TAM SLIDE ≠ BIG BUSINESS.
THE OPPORTUNITY GATE
1.
WHAT DO WE KNOW?
2.
WHAT DO WE THINK?
3.
WHAT MUST BE TRUE?
4.
WHAT COULD KILL THIS?
5.
WHAT IS THE CHEAPEST TEST?
GO · REFINE · PIVOT
GO / REFINE / PIVOT IS CAPITAL ALLOCATION.
GO
Core thesis survives.
Increase commitment cautiously.
REFINE
Problem survives.
Modify weak variable.
PIVOT
Critical assumption contradicted.
Alter thesis.
EVIDENCE EARNS RESOURCES.
PROTOTYPE = INSTRUMENT, NOT TROPHY.
BEFORE YOU BUILD: WHAT UNCERTAINTY WILL THIS REDUCE?
PROTOTYPING ≠ VALIDATION.
YOUR WEEK 8 INVESTMENT MEMO
1. GO / REFINE / PIVOT
2. ONE ICP
3. THREE DECISION-CRITICAL NUMBERS
4. MOST DANGEROUS ASSUMPTION
5. NEXT EXPERIMENT
6. SUCCESS THRESHOLD
7. KILL THRESHOLD
THIS PREPARES YOU FOR THE MENTOR SESSION.
NOW YOU'RE THE ANALYST.
50 MINUTES. ONE COMPANY.
INCOMPLETE INFORMATION. NO PERFECT ANSWER.
READ → EXTRACT → CALCULATE → ATTACK → DECIDE → DEFEND
MEDROUTE
AI-enabled diagnostic sample logistics
for independent pathology labs
“Labs lose customers because home sample collection is unreliable. MedRoute will become the operating layer for diagnostic logistics.”
Founders ask for ₹50L to expand from Pune.
INVEST OR TEST?
EXHIBIT A: CUSTOMER EVIDENCE
18 lab owners interviewed
14 missed/delayed collections weekly
9 coordinate riders on WhatsApp
6 previously paid third-party riders
11 “I'd try a reliable platform.”
12 invited → 8 agreed → 6 activated → 4 active W2 → 3 active W4
2 asked for expanded service hours.
Acceptance
8/12 = 66.7%
Activation / invited
6/12 = 50%
W4 retention / activated
3/6 = 50%
Invited → W4
3/12 = 25%
WHICH DENOMINATOR TELLS WHICH STORY?
“50% RETENTION!” n = 6
CAN A NUMBER BE MATHEMATICALLY CORRECT AND STRATEGICALLY WEAK? YES.
EXHIBIT B: WHO IS THE ICP?
| SEGMENT | REACHABLE | ORDERS/DAY | PAIN | PILOT INTEREST | FEE/ORDER |
|---|---|---|---|---|---|
| Small Independent | 900 | 4 | High | 55% | ₹25 |
| Mid-size Independent | 300 | 18 | High | 70% | ₹22 |
| Large Chains | 80 | 120 | Medium | 25% | ₹15 |
Small · 900×4×₹25
₹90,000/day
Mid · 300×18×₹22
₹1,18,800/day
Chains · 80×120×₹15
₹1,44,000/day
× 55% proxy
₹49,500
× 70% proxy
₹83,160
× 25% proxy
₹36,000
DID THE BIGGEST SEGMENT WIN? NO. PILOT INTEREST ≠ PROVEN CONVERSION.
EXHIBIT C: UNIT ECONOMICS
Orders / day
18
Revenue / order
₹22
Rider allocation
−₹13
API + support
−₹2
Contribution Margin = ₹7 / ₹22 = 31.8%
18 × 26 operating days × ₹7 = ₹3,276 / lab / month
NOW CAC HAS CONTEXT.
EXHIBIT D: CAC — AND THE HIDDEN COST
₹24,000 acquisition cost · 40 contacts → 16 meetings → 8 pilots → 4 paying customers
Cost / contact
₹600
Cost / meeting
₹1,500
Cost / pilot
₹3,000
CAC
₹6,000
Payback = ₹6,000 / ₹3,276 = 1.83 months
80 × ₹500 = ₹40,000
Adjusted acquisition cost
₹64,000
Adjusted CAC · ₹64k/4
₹16,000
Adjusted payback
4.88 months
THE BUSINESS DIDN'T CHANGE. THE ACCOUNTING BOUNDARY DID.
EXHIBIT E: THE MARKET
Target labs
8,000
Collections/day
18
Days/month
26
Months/year
12
Fee/order
₹22
= ₹98.8416Cr ≈ ₹98.84Cr / year
TAM? SAM? MODELLED REVENUE POOL?
THE LABEL DEPENDS ON SCOPE AND ASSUMPTIONS.
THE LABEL DOES NOT RESCUE WEAK INPUTS.
EXHIBIT F: THE RETURN STORY
OPERATING ASSUMPTIONS
₹98.84Cr × 10% capture
= ₹9.884Cr revenue
₹9.884Cr × illustrative 5×
= ₹49.42Cr enterprise value
INVESTMENT ASSUMPTIONS
₹50L at ₹5Cr post-money
10% ownership · ignoring dilution
₹49.42Cr × 10%
= ₹4.942Cr proceeds
LOOKS INTERESTING. NOW ATTACK IT.
5× is an illustrative case assumption — not a universal valuation benchmark.
SENSITIVITY ATTACK
Revenue · ₹98.84Cr×3%
₹2.9652Cr
Value · ×3
₹8.8956Cr
Investor proceeds · 10%
₹0.88956Cr
9.88× → 1.78×
SAME STARTUP. TWO ASSUMPTIONS MOVED.
FRAGILE TO THESE ASSUMPTIONS.
WHAT SHOULD YOU TEST FIRST?
Decision heuristicRANK THE TOP THREE.
MOCK MIDTERM SIMULATION
FICTIONAL PRACTICE CASE · USING ONLY MEDROUTE EVIDENCE
Advise GO, REFINE, or PIVOT. Show your work.
- A. Identify the strongest initial ICP; justify quantitatively and behaviourally.
- B. Calculate and interpret activation/retention, contribution, CAC/payback, and bottom-up market evidence.
- C. Identify TWO numbers stronger-looking than their evidence supports.
- D. Identify the SINGLE assumption most able to reverse your decision.
- E. Design ONE ≤₹25,000 information-maximising experiment with numerical success and failure thresholds.
- F. Give a final GO / REFINE / PIVOT decision in ≤100 words.
Individual case
10:00
HOW AN ANALYST STARTS
DO NOT START WITH THE CONCLUSION.
GIVEN
₹22 price
DERIVED
31.8% contribution margin
ASSUMED
10% market capture
UNKNOWN
Long-term retention
NEVER LET AN ASSUMPTION DISGUISE ITSELF AS A FACT.
BUILD THE EQUATION CHAIN
Customer → Orders → Revenue → Contribution → CAC → Payback → Retention → LTV
ICP → Reachable Accounts → Revenue Pool → Capture → Outcome
EVERY NUMBER MUST HAVE A PARENT.
WHICH INPUT, IF WRONG, CAN CHANGE THE DECISION?
THE DECISION-CRITICAL ASSUMPTION.
PRECISION ≠ TRUTH
CAC = ₹6,000
Looks precise.
Founder labour was omitted.
MARKET = ₹98.84Cr
Depends on:
8,000 × 18 × 26 × 12 × ₹22
If one input is weak, the decimal places do not save you.
MATHEMATICAL PRECISION ≠ EVIDENTIARY PRECISION.
THE ANALYST'S VERDICT
YOUR DECISION FIRST. DEFEND IT.
ONE DEFENSIBLE EXAMPLE:
REFINE / CONDITIONAL GO
INTO A NARROW MID-SIZE-LAB PILOT
• strongest volume × pilot-interest combination
• real behaviour exists
• contribution appears positive
• Week-4 retention is only 3/6
• adjusted CAC worsens with founder labour
• national capture assumptions remain fragile
ANOTHER VERDICT CAN SCORE HIGHER IF BETTER DEFENDED.
BUY INFORMATION BEFORE YOU BUY GROWTH.
Case-specific thresholdsEXPERIMENT
Budget ≤ ₹25,000
20 qualified mid-size labs
4 weeks
Measure activation · weekly repeat · orders/lab · contribution/order · operational failure rate · willingness to pay
GO SIGNAL
≥12 activate · ≥8 active Week 4 · ≥12 orders/week/active lab · ≥₹6 contribution/order
FAIL / RETHINK
<6 active Week 4 OR contribution ≤₹0 after realistic operating cost
NOT INDUSTRY BENCHMARKS.
DEFINE FAILURE BEFORE YOU FALL IN LOVE.
WHAT THE MIDTERM ACTUALLY TESTS
NOT: CAN YOU CALCULATE CAC?
BUT: CAN YOU NOTICE WHEN CAC IS LYING?
NOT: CAN YOU CALCULATE TAM?
BUT: CAN YOU ATTACK THE ASSUMPTIONS INSIDE IT?
NOT: CAN YOU CALCULATE RETENTION?
BUT: CAN YOU DISTINGUISH 3/6 FROM 300/600?
NOT: CAN YOU USE ICE / RICE?
BUT: CAN YOU RECOGNISE WHEN THE DECISION IS FRAGILE?
NOT: CAN YOU BUILD AN APP?
BUT: CAN YOU IDENTIFY WHAT DESERVES TO BE BUILT?
ASSUMPTION → EVIDENCE → PROBABILITY → ECONOMICS → DECISION
TOMORROW: YOUR COMPANY ENTERS THE ROOM.
FOR THE MENTOR SESSION · BRING ONE PAGE
1. GO / REFINE / PIVOT
2. YOUR ICP
3. THREE DECISION-CRITICAL NUMBERS
4. MOST DANGEROUS ASSUMPTION
5. NEXT ₹0–₹25K EXPERIMENT
6. SUCCESS THRESHOLD
7. KILL THRESHOLD
DON'T ASK: “DO YOU LIKE MY IDEA?”
ASK: “WHICH ASSUMPTION WOULD YOU ATTACK FIRST?”
CAPITAL FOLLOWS EVIDENCE. YOUR TIME IS CAPITAL.
DON'T BUILD FASTER. LEARN CHEAPER.