Use cases: launching a new business / evaluating a side hustle idea / helping others choose a direction / evaluating a company you are considering joining.Run any "entrepreneurial decision problem" through this framework first.
TL;DR
15-character core mantra:
Proactively envision the endgame, do addition thoroughly, do subtraction professionally.
Core math:
- Picking a direction off the top of your head → 10% first-attempt success rate
- Eliminating 90% of non-viable options after research → over 30% first-attempt success rate
- Testing 4 times in one year → total success rate P = 1 - 0.7⁴ = 76%
Turn a low-probability event into something highly likely to work out.
9-character underlying mindset: Don't be conflicted, don't be naive, don't be afraid
When to use
| Scenario | Use |
|---|---|
| Wanting to start a new side hustle / startup idea | ✅ Must use |
| Your boss asks you to lead a new business initiative | ✅ Must use |
| Evaluating whether to join someone else's project | ✅ Must use |
| Deciding whether to invest money in a friend's project | ✅ Must use |
| Already 3 months into execution | ⚠️ Still need to do it; keep pre-judging every day |
| Writing daily / weekly reports | ❌ Too lightweight |
From day one through every day of entrepreneurship, you must do pre-judgment.Pre-judgment is often several times more important than the Yitang Five-Step Method.
Complete framework
Step 0: Recognize whether you are a P-type or L-type entrepreneur
| P-type (Passion-driven) | L-type (Logic-driven) | |
|---|---|---|
| Starting point | Comes from past success / personal vision / a spur-of-the-moment impulse | Treats entrepreneurship as a research problem, continuously gathers information |
| Rhythm | Build a team → start working → solve problems along the way | Research → pre-judge → eliminate 70-80% of pitfalls → only then enter the field |
| Single-attempt success rate | < 1% | 10-30% |
Gap in pre-judgment stage success rate between P-type and L-type:Potentially on the order of 100 times.
Step 1: Proactively envision the endgame (7-layer spectrum chart)
Core: Without an endgame expectation, do not start deep discussion. "Running a small business vs building a large company" are completely different projects.
graph LR
L1["1 副业<br/>极低风险<br/>零花钱"] --> L2["2 个体<br/>低风险<br/>养活自己"]
L2 --> L3["3 单体<br/>中风险<br/>几十-几百万"]
L3 --> L4["4 小规模<br/>中高风险<br/>百万级"]
L4 --> L5["5 体系增长<br/>高风险<br/>千万级"]
L5 --> L6["6 细分头部<br/>极高风险<br/>亿级"]
L6 --> L7["7 做大上市<br/>极高风险<br/>十亿级+"]
classDef low fill:#e8f5e9,stroke:#43a047
classDef mid fill:#fffde7,stroke:#fbc02d
classDef high fill:#ffebee,stroke:#e53935
class L1,L2 low
class L3,L4 mid
class L5,L6,L7 high
Details of each layer:
| Layer | Form | Risk | Profit |
|---|---|---|---|
| 1 Side hustle | Personal part-time work | Extremely low | Pocket money |
| 2 Solo proprietor | Full-time one-person company | Low | Support yourself |
| 3 Single unit | One store/studio + a few employees | Medium | Hundreds of thousands to millions of RMB |
| 4 Small scale | Replicate 3-5 units | Medium-high | Million-RMB level |
| 5 Systematized growth | Chain / standardization / informatization | High | Ten-million-RMB level |
| 6 Niche segment leader | Fundraising-fueled expansion / category synonym | Extremely high | Hundred-million-RMB level |
| 7 Scale to IPO | Diversification / public listing | Extremely high | Billion-RMB level and above |
Rules:
- Choose a range not a point — "secure A, strive for B" (e.g., secure 3, strive for 5)
- Pre-judge the 5-10 year endgame, do not judge the present
- Be prudent and pragmatic (neither overreaching nor overly short-sighted)
Truman's common qualitative-change point scripts (for decision alignment):
- Stable business vs pursuing top-tier fundraising?
- Single store is enough vs must scale?
- Amateur trial vs full-time entry?
- Solo operation vs hiring to build a company?
Why this "secure A, strive for B" matters: MBA private board case — a "scenic area café" chain had 7-8 stores, and everyone was offering all kinds of suggestions, falling into chaos. Truman asked, "Do you ultimately want to build 50 stores or 500 stores?" Alignment was achieved instantly, and real discussion only began then.Without aligned endgame, all discussion is just people talking past each other.
Step 2: Do addition thoroughly (option pool thinking)
Core: Break broad ideas into 10-100 concrete options; the ones that can actually make money + are timely to do + you can pull off may only be 2-3.
Misconception: Directly treating "build an overseas 3C brand" / "build a bakery chain" / "build beauty industry SaaS" as the entrepreneurship topic.
Counterexample: Is "selling cat food on Douyin" one single topic? No — there are at least dozens:
- Category: dry food / wet food / freeze-dried / canned /...
- Price band: budget / mid-range / premium
- Whether to build your own factory
- Whether to do self-operated livestreaming
3 decomposition methods (the more options, the better):
| Method | Dimension |
|---|---|
| Horizontal segmentation | Price band / online-offline / city region / 2B2C / subcategory |
| Industry chain | Raw materials / manufacturing / channels / media / consumer delivery |
| Yitang Five-Step Method | Demand / solution / business model / growth / moat |
Goal:
- General business:At least 10 options
- Training state / MBA camp:Target 100 options
How to compensate for lack of exposure (from easy to hard):
- Desk work — industry reports + 36Kr
- AI assistance — feed in background + expected range, let AI generate options
- On-site research — visit experts + visit offline stores
- Apex information — spend some time in consulting / top companies / investment institutions
Why do addition thoroughly: "The few options you end up keeping are selected through a 'battle royale' from massive addition or even exhaustive enumeration; their win rate will definitely be higher than those you randomly and sporadically think of."
Step 3: Do subtraction professionally (eliminate fatal flaws)
Charlie Munger: "If I knew where I was going to die, I would never go there."
Three major fatal-flaw dimensions:
Ten typical misjudgments in business models:
- Non-rigid demand (e.g., community social bookstore)
- Unit economics do not work (e.g., education version of Toutiao)
- Ceiling too low (e.g., Wuhan medical aesthetics SaaS)
- Poor sustainability (e.g., a certain viral internet-famous snack)
- ... (see source highlight GRID_1053 for the full 10 cards)
Five typical pre-judgments on team capability:
- Lack of original intention (quick-money mindset doing serious business)
- Lack of capability (strong product and tech but unable to open sales)
- Lack of necessary capital (see an opportunity and enter but cannot push it forward)
- ...
Industry opportunity canvas (common industry fatal flaws):
- Lack of change (industry in steady state, no disruptive opportunity)
- Failure to split the industry chain (stuck in the lowest-value segment)
- Missed competitive window (competitors already mature)
- Missed fundraising window (peers already at Series D/E)
- Concentration too low (fundraising extremely hard)
Pre-judgment levels (10-year cultivation map):
- L1-L2 business pre-judgment (beginner)
- L3 team pre-judgment (intermediate)
- L4-L5 industry pre-judgment (advanced)
Step 4: Produce 4-stage deliverables
| Stage | Form |
|---|---|
| 1 | Vague idea |
| 2 | Concrete topic with relative confidence |
| 3 | Topic + Five-Step Method hypothetical pre-judgment |
| 4 | Five-Step Method pre-judgment + Plan B/C/D alternatives ← Advanced state |
Value of Plan B / C / Z: When doing subtraction and lean validation later,leave yourself a fallback. If Plan A fails, the whole thing won't collapse.
Classic cases (full deduction)
Case 1: Milk tea shop (vintage case, 2013)
4-step pre-judgment:
- Choose broad direction — livelihood (clothing, food, housing, transport; long-term stable)
- Choose category — small food & beverage → milk tea (long lifecycle + time-machine theory + store opening cost of 300,000-500,000 RMB is enough)
- Entry method — "joint venture" with a well-known franchise brand (100% operational decision-making power)
- Choose battlefield — Top 30 cities → cut central and western regions → cut East China and South China → lock in Qingdao/Yantai/Dalian → select based on comprehensive GDP + distance Qingdao → fly to Qingdao for in-person validation
Result:100+ stores in 10 years, became a top player in Qingdao.
Case 2: Vertical e-commerce → men's pants (Peter, 2012)
Core mantra:
- Don't do it if the supply chain is not strong enough (resources < 500,000 RMB)
- Eliminate women's clothing (brands can't take off) / eliminate children's clothing (insufficient supply chain) → men's clothing → men's pants → men's formal pants(single-point breakthrough)
- With limited startup capital, focus on one point for higher odds
Byproduct — a counter-tactic when you can't negotiate the supply chain: Found the boss a Chaoshan peer who used to be far inferior to him but took off after switching to e-commerce, invited him for tea, didn't talk about cooperation, only let him open the e-commerce backend to see revenue data. A few days later the boss proactively came to seek cooperation.
Mantra: Sometimes reasoning doesn't work; if it doesn't work, directly use a peer to give him a big stimulus.
Case 3: Yitang from -1 to 0 (Truman, 2018)
76% probability math:
- 30% single-attempt success rate (after serious research)
- Test 4 times a year → failure rate = 0.7⁴ = 0.2401 → 76% success rate
Option pool evolution:
| Version | Content | Reason for elimination |
|---|---|---|
| V1.0 | 6 alternatives (training & learning / finding a co-founder / startup community / modular consulting / service yellow pages / personalized research reports) | — |
| V2.0 → 4 options | Eliminate personalized research reports (no paying demand) + service yellow pages (2B trust threshold too high) | — |
| V3.0 → add entry points | Training (large-scale high-quality courses) / co-founder (CTO sales) / community (city learning) / modular consulting (module standardization) | — |
| V4.0 → 3 options | Eliminate finding a co-founder (product core cannot form; scaling up leads to death) | — |
Result:
- A Modular consulting shut down
- B Startup community abandoned due to low ceiling
- C Training (PlanC) worked out → Yitang → 50 million RMB revenue in 5 years
9-character underlying mindset (corresponding to timing, location, and people)
| Dimension | Objective aspect | Mindset |
|---|---|---|
| Timing(industry opportunity) | Not up to you, e.g., industry cycles / capital trends / model feasibility | Don't be conflicted(seek truth from facts, ride the trend) |
| Location(business model) | Objective laws, e.g., unit economics / ceiling | Don't be naive(validate quickly) |
| People(original intention/team/resources) | Controllable, e.g., team capability / cooperation | Don't be afraid(actively change, bravely strive) |
Wang Xing: Do not use tactical diligence to cover up strategic laziness.
Three layers of awareness
Layer 1:Entrepreneurship is about winning
Find points where we can win. In a huge market, find a temporary blue ocean, a territory we can win with the resources at hand.Never pick a beachhead you cannot win.(From Entrepreneurship is About Segmented Monopoly)
The Art of War by Sun Tzu:Win first, then seek battle. Victorious armies first create a winning posture before challenging the enemy; defeated armies hope to gain lucky victory in battle.
Layer 2:Pre-judgment can greatly increase probability
| Business type | Industry average success rate |
|---|---|
| Simple side hustles where everyone makes money | < 50% |
| Small restaurants / fruit shops | < 30% |
| Independent scalable business | < 15% |
| Innovative pursuit of top position | < 3%, even 1‰ |
Core goal of pre-judgment: raise the base probability by 1x / 5x / 10x / dozens of times.
Layer 3:Maintain the correct posture
Pre-judgment is something that can be deliberately practiced, not talent / insight. Judgment is a basic skill: build an option pool + identify business fatal flaws + analyze team fatal flaws + systematically analyze the industry. For any entrepreneurship, joining others' entrepreneurship, or evaluating a company you want to join, use the same set of basic skills.
Operationalized applications
Users have built based on this course ~/.claude/skills/yitang-predict-business-opportunity/ skill:
- a 4-week workflow (W1 option pool / W2 addition convergence / W3 subtraction to eliminate fatal flaws / W4 write pre-judgment report)
- Practical calculation of the 76% probability math
- L-type deduction template
- When conflicting with this wiki, take the original text of this wiki as the standard(Instructor Truman's original words)
Associated pitfall data
- Pitfall data pack (local reference material)— desensitized extraction from 5000+ students
- Usage: before doing subtraction for a new business, Grep peer pitfalls by industry
History
- Created 2026-05-16: based on the 2026-05-11 third edition cognitive framework chapter + supporting pitfall data pack
- 2026-05-16 added Mermaid 7-layer spectrum chart (LR flow + risk color scale): to compensate for markdown tables' weakness in expressing "progressive spectrum"
Upcoming course previews (to be ingested)
- Practical Business Pre-Judgment
- Practical Team Pre-Judgment
- Practical Industry Pre-Judgment