There are a lot of business ideas out there. And even if you decide not to pursue any of your own ideas, even when interviewing your target group, they will tell you about different business cases.
You cannot trust in what people tell you. Therefore, before you commit to a specific idea, you need to validate the existing demand. We do this by getting small prepayments and signed Letter of Intents.
I've once heard that YCombinator accepts startups that were able to accumulate 5 Letter of Intents with prepayments. That's why I decided to set the bar to 5 LOIs for us as well.
If you managed to get the 5 Letter of Intents from your target group, that's great! But you still have to decide whether this idea is worth your time. How many companies did you contact until you were able to get the 5 LOIs? Was it 500, 5000 or 50.000? Compare that to the TAM (total addressable market) of your target group and you will get a feeling whether this endeavour is worth it.
