Four-filter test
The Four filter test is the check a team runs on a candidate opportunity to decide whether it's worth pursuing commercially. All four conditions have to hold: enough users actually want the outcome (demand), the team can be the route those users pick and keep being that route over time (supply), the right intervention can reach the right user at the right moment (encounter), and the user getting what they want translates into revenue the business can capture (monetization). Any one failing disqualifies the opportunity, regardless of how strong the other three look.
Definition
The four-filter test is the criterion for whether a transition altitude is worth commercial intervention, requiring Demand, Supply, Encounter, and Monetization all to hold.
The four filters
- Demand: pull toward the outcome at sufficient volume, frequency, and predictability to sustain a business. User-side.
- Supply: ability to be the path the user chooses. Two sub-criteria, both required: capacity (can provide the outcome at all) and comparative advantage (can provide it better than the alternatives users would otherwise choose, sustained over time as competitors learn and the user base evolves).
- Encounter: the right intervention finding the right user at the right time. Two sub-criteria, both required: reach (getting in front of users pursuing the outcome at a moment they're open to choosing a path) and detection (identifying which users are pursuing which outcome, early enough to route them).
- Monetization: whether the user's successful transition translates into captured revenue. Provider-side.
All four are necessary; failing any one disqualifies the workflow level regardless of the others. Demand and Monetization stay separate because they read different sides of the encounter — pull toward the outcome doesn't determine whether a business model can capture that pull on a workable timing or pricing. A workflow can pass Demand, Supply, and Encounter and still fail commercially because the value it delivers can't be exchanged on the terms the offering needs.
Discrimination across levels
Value paths decompose recursively. Making pancakes contains mixing the batter contains picking up the whisk contains opening the grasp to accept the handle. Every level is structurally describable as a transition — starting state, intent, route, resulting state — but commercial intervention isn't viable at every level. The four-filter test is what discriminates.
A workflow that fails the test remains structurally describable; it's just not a candidate for investment. Test passage establishes commercial viability — Stage 1 of opportunity selection. Stage 2 is practitioner-fit and sustained-investment plausibility: do we want to help these users, can this team sustain the depth of investment, do we believe the work makes the world better. Stage 2 questions are judgment-shaped rather than condition-shaped, which is why they don't appear as a fifth filter.
Two other gates
Two conditions sit outside the test entirely and govern whether the framework applies to an offering at all:
- Engine-mutualism: the offering must run on a mutualistic engine. Variable-reward dopamine apps can pass D/S/E/M cleanly — compulsive users are demand, parasitic engagement is suppliable, acquisition and detection work, the business is profitable — and still sit outside scope.
- Intent-payment cadence: the user's intent-recurrence and the provider's payment-recurrence must align. A one-time-intent / recurring-payment configuration passes the filters in the short term and fails only in cohort-lifetime arithmetic the filter doesn't directly model.
The filter discriminates only when applied with operational rigor, which depends on territory-exposure. A team operating from secondhand familiarity can run the test and produce filter-results that look rigorous but aren't grounded; the surface output looks the same whether the inputs are territory-grounded or pattern-matched.
Example
Run the test at ascending workflow levels of a user's engagement with a software offering:
- Sub-workflows within activation (confirming email, completing profile): fails. No independent demand, no supply alternatives, encounter forced by the parent workflow, no direct monetization. Describable as transitions; not commercial value paths.
- Activation (signup through first paid conversion): passes. The current commercial wedge for self-serve SaaS.
- Composite lifecycle (the entire user/provider relationship treated as one continuous transition): passes non-trivially. Each filter holds differently than at activation alone — Monetization especially, since LTV economics has different timing and capture mechanics than per-phase activation revenue.
- The user's overall life-value-path: fails commercially, passes descriptively. Demand holds; Supply fails because any single provider covers a slice, not the whole; Encounter holds only partially; Monetization captures only the provider-covered slices.
The test fails at the smallest and largest scales, passes at the two middle ones — discriminating work, not rubber-stamping.