Naval Ravikant is one of the most unique thinkers of the modern era, and he’s laid out a solid checklist for starting a company.
The AngelList founder and venture capitalist has started seven companies throughout his career, and despite his remarkable track record, he admits he “fails every time” against his own rigorous standards. What makes his perspective particularly compelling is his acknowledgment that “there are no formulas” for entrepreneurial success—yet he’s distilled his experience into a practical framework that transcends geographic boundaries. His approach emphasizes doing what you love, even when critics say it will never work, while providing concrete guidance for those brave enough to venture into the startup world.
Ravikant’s methodology is refreshingly honest about the realities of entrepreneurship while offering actionable insights. “So I just want to lay out kind of my formula for starting a company,” he explains. “And I started seven companies now, and I always kind of run through this checklist and I fail every time. And the most important thing is there are no formulas, right? At the end of the day, you have to do what you love, and you have to do it even though people tell you it’ll never work.”
1. Pick a Great Co-Founder
The foundation of Ravikant’s approach centers on partnership. “The most important thing is: Pick a great co-founder. You can do a company on your own. It’s, but it’s like you can in theory raise a child on your own, but you probably shouldn’t.”
He emphasizes three critical qualities: “A co-founder is someone who’s going to have very high intelligence, very high energy, and very high integrity. The intelligence is a given. These people should be very smart. Hopefully they make you feel dumb, or they’re not smart enough.”
The energy component is equally crucial: “They should be extremely hardworking. A founder is someone who never has to be motivated. You should not have to be telling them to do their job.” But perhaps most importantly, “the integrity piece is important because if you get the other two and you don’t get the third, then you’ve got a smart, hardworking crook who’s gonna cheat you. And that’s the worst kind of person to be paired up with.”
2. Choose a Very Large Market
Market size trumps clever ideas in Ravikant’s framework. “You need to pick a very large market,” he states, emphasizing the importance of growth potential. “Pick something that’s very large so you can grow into it.”
This principle challenges the common startup obsession with revolutionary concepts. Instead, Ravikant advocates for focusing on market opportunity and personal expertise over breakthrough innovation.
3. Focus on Space, Not Ideas
Perhaps the most counterintuitive element of Ravikant’s checklist is his dismissal of ideas as a starting point. “Notice I don’t talk about the idea. I think ideas are almost irrelevant. There are lots and lots of smart people who sit around and have ideas. All day long ideas are worthless. I can give you a thousand good ideas after this meeting come up and ask me.”
Instead, he advocates for a different approach: “The more important thing is that you pick a large space that you are knowledgeable and passionate about, and then you will figure out what the right thing to do within that space is.”
4. Build Before You Fundraise
Ravikant strongly advises against the “great idea, give me money” approach. “Do not go around telling people, I have a great idea. Now give me money that never works.”
His alternative pitch structure is more substantial: “Rather, you should say, this is a space where there’s a huge market. I’m really knowledgeable, passionate about it. Here are the kinds of things that I could do. Here’s the great person that I have doing it with me, and here’s the minimum viable product that we have built that will show that we can test in the marketplace.”
5. Achieve Product-Market Fit Before Scaling
The final step involves validation and timing. “So basically you do want to build something. Thanks to all the leverage that I talked about, you can actually build and deploy something before you go and raise money, especially if you have good coders on your team.”
He references Marc Andreessen’s concept of product-market fit: “You can iterate it to the point where you get what Andreessen calls product market fit, where your product matches up to what the market needs, and then you go and you raise money from people you trust and you use that money to scale.”
The Broader Implications
Ravikant’s checklist reflects a fundamental shift in how successful entrepreneurs approach company building in the modern era. His emphasis on building before fundraising aligns with current trends toward capital efficiency and sustainable growth, contrasting sharply with the “growth at all costs” mentality that dominated the previous decade. The focus on co-founder quality over solo heroics acknowledges the increasing complexity of modern businesses, while his dismissal of idea-centricity reflects a mature understanding that execution and market dynamics matter more than conceptual brilliance.
This framework is particularly relevant in today’s economic climate, where investors are increasingly scrutinizing unit economics and sustainable business models. Companies like Stripe, Airbnb, and Zoom exemplify this approach—they identified large markets, built strong founding teams, developed minimal viable products, achieved clear product-market fit, and only then scaled aggressively with external capital. Ravikant’s methodology provides a timeless blueprint for navigating the entrepreneurial journey, regardless of market conditions or geographic location.