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A business idea should only proceed to further analysis once it has been qualitatively determined to offer value to a specific target audience. This next phase involves evaluating the most critical components that influence a business's likelihood of success. It is also important to recognize that many companies misjudge their ideas by applying irrelevant or flawed criteria during this assessment stage.

Proper evaluation depends on deep industry knowledge and the use of well-formulated theories, often expressed as qualitative questions that help determine the viability of an idea. While no process guarantees success, there is no merit in avoiding the attempt. The true potential of an idea can only be revealed through action—embracing the risk of failure is a necessary step toward discovery and growth.

We assume that the idea has scored above 50%, indicating that it is sufficiently qualified for further testing as a potential business. However, this scoring should not be seen as absolute or rigid. It is important to recognize that not all qualification questions carry equal weight—some factors are inherently more critical than others. The value of an idea often lies in the relative importance of certain criteria over others. Therefore, acknowledging the hierarchy and varying significance of the underlying theories used in the qualification process is essential.

Traditionally, businesses have relied on PESTLE analysis—a highly useful framework for evaluating external factors that affect business operations. While PESTLE remains relevant and valuable to this day, it is inherently not sequential and, at times, overly theoretical or “posh” in its application. In this context, however, we seek more dynamic tools—ones capable of withstanding the test of time and adapting to the evolving sequence of events that reveal the true potential of an idea. The tool we use here is SFCS - Survival, Functionality, Connectivity and Sentiment. SFCS is adapted to serve the purpose of positively analyzing businesses using relevant criteria.

Although elements of the PESTLE framework remain applicable, the model does not always offer the logical or intuitive flow required for effective human understanding of a business’s most critical components. Consequently, some PESTLE factors may be better examined through alternative frameworks or dimensions—ones that are more aligned with the dynamic nature of idea development and the evolving landscape of business growth. The section below demonstrates the adapted SFCS framework in action for further idea analysis.

Survivability of the Business in an Environment

The next component involves determining whether there is real potential for opportunity within an idea. The first step in this process is assessing whether the business can survive in a physical sense. The physical environment must be defined in terms of where over 70% of the target audience is located. By this stage, the preliminary qualification process should have already identified the target audience through various lenses—such as demographics, psychographics, behaviors, needs, and motivations.

Using a survival framework, one must assess whether the country or region presents high risks in terms of weather, war, natural disasters, or geographic instability. As the popular saying goes, you can’t build something on nothing—if a location is highly vulnerable to these four survival risks, then a business, no matter how promising the idea, is likely doomed from the start. It would be, in effect, dead on arrival.

For example, if your business idea involves launching an insurance company in Northern California, you would need to seriously consider the recurring wildfire disasters that have plagued the region. This doesn't necessarily mean the idea is unviable, but it does require a strategic reevaluation. Personally, I would advise against launching such a high-risk venture, especially when countless other business opportunities exist. Considering that over 90% of startups fail, it would be wise to avoid stacking the odds further against yourself.

Functionality of the Stable Environment

Now we are at Stage 2—confirming whether the idea holds real business opportunity. This stage should only be considered once the idea has successfully passed the initial qualification phase. If you've made it this far, it's fair to smile—you're likely working with a promising idea.

At this point, the focus shifts to evaluating the functionality of the environment, particularly at the country level. There are specific metrics you need to examine to determine whether the environment is conducive to business. Key indicators include:

• An unemployment rate below 10–20%

• A cost of living index lower than the average salary

• Credit availability and access to finance

• A poverty rate within manageable limits

• Credit coverage of at least 50%

• Exchange rate depreciation relative to the U.S. dollar not exceeding 100%

• A cost of living index lower than GDP per capita

• Strong purchasing power parity

• A sizeable or growing population

As a rule of thumb, I recommend that at least 60% of these indicators should be favorable. Keep in mind that each factor may carry different weights, depending on the nature of the business and its objectives.

Some risks identified at this stage can be mitigated—as long as they are acknowledged early and comprehensive plans are put in place. Particularly if there's strong potential for high returns, these risks may be acceptable. As a precautionary measure, a small portion of your portfolio should be allocated to such ventures. In summary, these businesses are viable, but only with robust risk mitigation strategies.

Connectivity of Business Components

The third element of the SFCS is Connectivity. A critical analysis of connectivity can provide deeper insights into the environment where the majority of the business—over 70%—will take place. Connectivity is vital because nothing functions in isolation; everything operates as part of a system. The first task is to identify the right components, with particular attention to the high-level factors that enable connectivity.

This typically starts with examining the underlying infrastructure. However, analyzing infrastructure is not the end of understanding connectivity—it is merely the beginning. While deeper, more complex interconnections will eventually need to be explored, they are not the focus at this stage.

For now, the foundational analysis of the idea should consider the core connections that will support it: road kilometres, availability of electricity, annual flight frequency, internet speed, railway coverage, accident rates, average hours spent in road traffic, access to smartphones, internet availability, electricity access, transportation safety reports and more.

Connectivity will reveal the strengths or weaknesses of a business idea. It’s better to understand the reality early, as eventualities can then be anticipated and planned for. At this stage, informed decisions can be made to either pursue or abandon the idea. While some infrastructure gaps can be privately addressed, the associated costs must be factored into the long-term viability of the business. Certain connectivity challenges may not be entirely eliminated but can be managed—consider countries where transporting goods requires bribes, even on poorly maintained, traffic-clogged roads. The result is often a weak supply chain, among other issues, which ultimately affects value for all stakeholders.

If the risk level associated with connectivity is low or moderate—such that risk and constraint management strategies can be effectively implemented—then the business environment is unlikely to be adversely affected. In this case, the idea can be considered to have successfully passed the second hurdle of evaluation. At this point, it becomes appropriate to begin testing and assessing whether there is existing demand for the business the idea represents