In 1998, Inc. magazine had a recurring section devoted to startup trends called "Upstarts." 

At the time, a red-hot field was corporate concierce services--startups whose whole raison d'être was running errands for large companies (or those companies' employees) on short notice. My erstwhile colleague Marc Ballon wrote a profile of the budding industry, and I--a mere intern at the time, and an expert on all things errands--helped out with research. 

For our coverage, I had a lengthy phone call with Janet J. Kraus, who'd cofounded Circles, a concierge and events company based in Boston. Though my Kraus story never ran in Inc., in time, Circles grew to be a $60-million company, which Sodexo acquired in October 2007. One month later, Kraus left to lead Spire, a company designed to create social resource sharing platforms specializing in travel and leisure. She sold Spire to Perfect Escapes in 2010.

I delve into all this background not only to vent my own nostalgia, but also to establish that Kraus--currently a Senior Lecturer in Harvard Business School's Entrepreneurial Management Unit--is hardly one of those academics whose highborn theories have never survived the jungle.

She's been there, done that, and now she's teaching it. 

Which is why I paid special attention to her not long ago when she told me about a simple, three-pronged framework she uses to evaluate startup ideas--both her own and her students'. 

She asks the founders to assess whether their ideas for startups are Oxygen (can't live without it), Aspirin (makes life less painful), or Jewelry (total luxury) to their potential customers.

The best business ideas, Kraus believes, should have aspects of all three.

  • Oxygen refers to products or services with inelastic demand: Food. Clothes. Funeral Services. Certain utilities. Entities humans can't live without. Here's the kicker: Oxygen can also refer to something businesses can't live without (since businesses are often going to be your target customers). Oxygen in a B-to-B sense would include e-mail and other software platforms (like Salesforce.com) which are the lifeblood of many organizations. 
  • Aspirin refers to products that ease pain (for businesses or consumers) but, ultimately, are not essential for survival. An example, hard though it might be to swallow, is coffee. It feels like oxygen, yes, but in point of fact consumers can live without it. You're not going to die. 
  • Jewelry refers to products or services that are strictly luxuries. Think of desserts, movies, video games or other sedentary, recreational activities. You don't need them. Yes, they're addictive, but they're not vital. Nor does their ability to ease pain compare to that of coffee or, well, aspirin. 

You're probably thinking: Isn't it debatable whether a given product or service is oxygen, aspirin or jewelry? Isn't it possible that certain items fall into all three categories? 

Yes. And that's when you know you've got a great startup idea.

Think of your mobile phone. It is simultaneously oxygen (phone, email), aspirin (apps that help you communicate or pay for things), and jewelry (games, music).

The point is not to spend hours debating whether your startup idea fits into all three. As Kraus points out, it's often a "judgment call." The idea is to use Kraus's framework as a fast exercise to speculate about the prospective need for your product or service (from consumers or businesses).

If your idea is strictly "jewelry," that's fine. Many a video-game maker has laughed all the way to the bank. But if your entrepreneurial ambition is to raise tons of venture capital, it might be wiser to cast about for ideas that are "oxygen"--essential products or services for most consumers or global corporations. 

As for Kraus, 48, her new company, Peach Underneath, has the potential to be oxygen, aspirin, and jewelry all at once. Slated to launch in June, having raised a round of venture capital (she wouldn't disclose how much), Peach Underneath is a designer line of women's underwear. To the extent that underwear is something that a vast majority of consumers wear (exact numbers unavailable), it's an "oxygen" product. Of course, shopping for and trying on bras can be a humiliating and uncomfortable experience; so devising a way to sell underwear that obviates these discomforts is "aspirin." And to the extent that designer apparel of any sort (as opposed to boring, strictly functional garments) is a luxury, not a necessity, Peach Underneath is a form of "jewelry." 

Ultimately, though, as Kraus knows firsthand, all business models must evolve in response to (and in anticipation of) the market. What's most important in using her framework, she notes, is "being brutally honest about what it is you're doing." In other words, it's easy, as a founder, to get high on your own research and ideas--and to "seduce yourself into believing your idea is something other than what it is." Assessing your idea through Kraus's framework is a simple way to take off the blinders.