── ── Strategy

The Seven Questions Test

Most business failures are not bad luck — they are unexamined answers. In Zero to One (2014, ch. 13), Peter Thiel and Blake Masters argue that every business must answer seven questions: Engineering (breakthrough technology, not incremental improvement), Timing (why now), Monopoly (big share of a small market), People (the right team), Distribution (a way to deliver, not just create)…

How it works

Run the Seven-Question Gate (7 scored questions → one verdict artifact). One question at a time, in order. The unbreakable rule: a question without a defensible written answer scores 1. No proceeding on vibes.

1. State the venture in one sentence: what it sells, to whom. Gate: if this sentence can't be written, stop — there is nothing to test yet. 2. Q1 Engineering. Can you create breakthrough technology — an order-of-magnitude (≥10x) improvement on the best existing substitute on a dimension the customer cares about — instead of an incremental one? Write the answer with the comparison baseline and the measured or estimated multiple. Score 1–5. Gate: written, evidence-backed answer exists → else score 1 and move on. 3. Q2 Timing. Is now the right time to start this particular business? Write what changed recently (technology cost curve, regulation, platform shift, behavior) that makes the idea viable today when it wasn't three years ago — and why it isn't already too late. Score 1–5. Gate: same rule. 4. Q3 Monopoly. Are you starting with a big share of a small market? Name the small market, its size, and your plausible share of it — not the trillion-dollar TAM sliced to a "conservative 1%." Score 1–5. See monopoly-vs-competition. Gate: same rule. 5. Q4 People. Do you have the right team? Write why these specific people are suited to this specific problem — domain history, complementary skills, how the founders met and why they'd endure a decade together. Score 1–5. Gate: same rule. 6. Q5 Distribution. Do you have a way not just to create your product but to deliver it? Name the channel, the unit economics of acquiring one customer through it, and evidence the channel works at your price point. "It will spread by word of mouth" is not an answer. Score 1–5. See bullseye-traction-channels. Gate: same rule. 7. Q6 Durability. Will your market position be defensible 10 and 20 years from now? Write what stops a well-funded imitator, and what the position looks like after the current technology wave commoditizes. Score 1–5. See last-mover-advantage. Gate: same rule. 8. Q7 Secret. Have you identified a unique opportunity that others don't see? Write the specific true-but-unpopular belief the business is built on, and why the people who could act on it haven't. Score 1–5. See zero-to-one-secrets and contrarian-question. Gate: same rule. 9. Tally against Thiel's calibration. Count questions scoring ≥4. 7/7: monopoly-grade — proceed with conviction. 5–6/7: might work — proceed only with a named plan and date to fix each weak question. ≤4/7: do not proceed as designed; the failure ahead will be described as bad luck, but it is visible right now, in writing. Gate: the verdict must cite the per-question scores — no overall gut number. 10. Stop-rule: if scores are shifting because the venture definition keeps changing mid-test, stop, rewrite step 1, and rerun — a moving target passes no gate. If the honest tally is ≤4 and the user wants to proceed anyway, record which questions were skipped and why; the artifact is the future post-mortem, pre-written.

Founders should not be the only scorers of their own venture. Where possible, have someone with no stake score the written answers independently and reconcile the gaps — the size of the founder-vs-skeptic gap on each question is itself diagnostic.

When to use it

• ** deciding whether to start, fund, join, or seriously pivot a business
• a plan is compelling on one axis (usually the tech or the TAM slide) and vague on the rest
• preparing or evaluating a pitch and you want the holes found before an investor finds them
• a previous venture failed "because of bad luck" and you want to know which questions were actually skipped
• running an AI startup idea through a structured gate before building
• user says "seven questions," "Thiel test," "is this idea any good," "stress-test my startup."

Worked example

The Seven Questions Test

Most business failures are not bad luck — they are unexamined answers. In Zero to One (2014, ch. 13), Peter Thiel and Blake Masters argue that every business must answer seven questions: Engineering (breakthrough technology, not incremental improvement), Timing (why now), Monopoly (big share of a small market), People (the right team), Distribution (a way to deliver, not just create)…

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