My WADM Matrix: How I Chose Between 3 Business Ideas (and Which One Won)

Business· 7 min read

My WADM Matrix: How I Chose Between 3 Business Ideas (and Which One Won)

Six months ago, I was in the position you're probably in right now: I had 3 promising business ideas, all with potential, but only had the energy and time to execute one well.

Most entrepreneurs in this situation do the same thing: they choose the one they "like" best or the one a friend recommends. I almost did the same. But then I remembered a framework I'd seen from Naval Ravikant and adapted it for this specific problem.

The result was the WADM matrix.

It's not complicated. In fact, it's almost absurdly simple. But that's exactly what makes it effective.

What is WADM?

WADM is an acronym representing the 4 factors that really matter when choosing between business ideas:

  • **W - Willingness**: How much do I really want to do this? Not "how good is the idea," but how much do I want to do it.
  • **A - Addressable Market**: How many people can I reach? What's the realistic TAM (Total Addressable Market)?
  • **D - Defensibility**: What protects me from competition? Is there a moat or is it easy to copy?
  • **M - Monetization**: How do I make money? Is it clear or vague?

Each factor is scored 1-10. Simple.

The 3 Ideas I Was Evaluating

To be honest, these are the ideas I was working with:

Idea 1: AI Content Analyzer (SaaS B2B)

A tool that analyzes content with Claude and gives SEO recommendations. Aimed at marketing agencies.

Idea 2: Spanish AI Newsletter

A newsletter in Spanish about using AI in business. Monetization via sponsorships and a premium product.

Idea 3: Custom AI Agent Builder (No-Code)

A visual platform for non-technical people to build AI agents without code. Aimed at small businesses.

My Real Evaluation (With Numbers)

This is where most people fail: it's not enough to score. You need to justify each score with data, not feelings.

Idea 1: AI Content Analyzer

W - Willingness: 6/10

  • It's a solid idea but I'm not passionate about SEO. I know it's profitable, but I'd be doing this for money, not curiosity.
  • Justification: I've built 2 SaaS before. I know the game. But when I think about spending 6 months on this, it doesn't excite me.

A - Addressable Market: 8/10

  • There are ~50,000 marketing agencies in Spain and Latin America who could use this.
  • Average price: $50-200/month per agency.
  • Realistic TAM: If I capture 1%, that's 500 customers × $100 = $50k/month.
  • Justification: The market exists, it's clear, but it's competitive.

D - Defensibility: 4/10

  • Anyone with access to Claude API can build this in 2 weeks.
  • No real moat. Just execution.
  • Justification: It's commoditized. My advantage disappears when Anthropic launches their own tool.

M - Monetization: 8/10

  • SaaS B2B is clear: you charge monthly subscription.
  • Proven, predictable model.
  • Justification: No ambiguity here. You know exactly how to make money.

Total Idea 1: 26/40 (65%)

---

Idea 2: Spanish AI Newsletter

W - Willingness: 9/10

  • This is what I'm already doing anyway.
  • I love writing about AI and business.
  • Justification: Zero friction. It's what I'd do for free.

A - Addressable Market: 6/10

  • Newsletter in Spanish about AI: there's demand, but the market is smaller than English.
  • Potential: 5,000-10,000 subscribers in 2 years.
  • TAM: 5,000 × $5 (average price of a premium product) = $25k/month best case.
  • Justification: It's smaller than it seems. The Spanish-speaking AI market is niche.

D - Defensibility: 7/10

  • My brand and audience are the moat.
  • But it's easy to copy if I do it well.
  • Justification: The defense is my consistency and unique point of view, not the technology.

M - Monetization: 5/10

  • Sponsorships: depends on audience size.
  • Premium product: requires many subscribers to be meaningful.
  • Justification: Monetization is vague. It's not clear how I make $10k/month.

Total Idea 2: 27/40 (67.5%)

---

Idea 3: Custom AI Agent Builder

W - Willingness: 8/10

  • I love building tools that others use.
  • It's technical but not boring.
  • Justification: It energizes me. I want to do it.

A - Addressable Market: 7/10

  • Small businesses that want AI automation: ~100,000 in Spain/LATAM.
  • Price: $20-50/month per agent.
  • Realistic TAM: 2,000 customers × $35 = $70k/month.
  • Justification: The market is large but dispersed. I need market education.

D - Defensibility: 6/10

  • The defense is UX and community, not technology.
  • But Zapier, Make, and others are entering this space.
  • Justification: The moat is weak. I'm competing with giants who have more resources.

M - Monetization: 7/10

  • SaaS clear: you charge per agent or per usage.
  • Predictable model.
  • Justification: It's clear, but less than a pure B2B tool because the customer is smaller.

Total Idea 3: 28/40 (70%)

---

The Decision (And Why)

Idea 3 won with 28/40. But here's the important part: it wasn't a clear victory.

All 3 ideas were within the same range (26-28). That means any of them would have been "correct" in terms of potential.

But when you look at the numbers:

  • Idea 1 had better monetization but low willingness (W=6). That kills the project in month 3.
  • Idea 2 had high willingness but vague monetization (M=5). That means working for free.
  • Idea 3 balanced everything: good willingness (8), reasonable market (7), and clear monetization (7).

I chose Idea 3 because it was the most balanced, not the "best."

And here's what happened next:

  • Month 1-2: Built an MVP in 3 weeks using Claude and Next.js.
  • Month 3: Launched to 50 beta users.
  • Month 4: Had 12 customers paying $30/month.
  • Month 6 (now): 47 customers, $1,410/month in MRR.

Is it a home run? No. Is it validation that the decision was correct? Yes.

Why WADM Works (And When It Doesn't)

It works because:

1. It forces you to be honest: You can't hide a bad idea behind "but I like it." 2. It balances emotion and logic: W (willingness) is as important as D (defensibility). 3. It's reproducible: Another entrepreneur can use the same matrix and reach a different conclusion (and be right).

It doesn't work when:

1. You don't have real data: If you're guessing the TAM, the matrix is garbage. 2. You expect it to predict the future: The market changes. Idea 2 could be better in 6 months. 3. You use it to avoid decisions: The matrix helps, but ultimately you have to choose.

The Experiment You Should Do

Take your 3 best ideas right now.

Score them on WADM:

``` Idea: _______________

W (Willingness): __/10 (How much do I WANT to do this?) A (Addressable): __/10 (What's the realistic TAM?) D (Defensibility): __/10 (What protects me?) M (Monetization): __/10 (How do I make money?)

TOTAL: __/40 ```

Don't use intuition. Use data. If you don't have data, research for 2 hours. It's better to do this now than regret it in 3 months.

The Uncomfortable Truth

Most entrepreneurs choose ideas based on:

  • What they think "sounds good"
  • What their friends think
  • What they read is "trending"

That's why 90% of startups fail.

Not because the ideas are bad. But because the wrong person executed the wrong idea at the wrong time.

WADM doesn't solve everything. But it gives you a 70% chance of being in the right conversation.

And that's better than the 10% you get with pure intuition.

---

Takeaway: Next time you have multiple ideas, don't do a group chat vote. Do the WADM matrix. Data wins.