As a founder you have a big picture idea of your product or service. How do you make sure it’s the right one? Rely on your gut? Business judgement? Ask friends/colleagues?
What you need is a systematic process to reduce risk and uncertainty of new business ideas.
Let’s talk about mechanics here.
After you’ve created the initial business model and designed your product’s value proposition, it’s time to extract and test your HYPOTHESES (Step 1) to determine what needs to be true for your idea to work.
But what is ‘Hypothesis’?
Hypothesis is one of your several assumptions that needs to be true for your business idea to work.
The faster you extract hypotheses, the better.
What I also want to emphasize is the obsession over analysis that some people have on the early stages of testing product ideas.
The thing is that most people who are interested in strategy, are interested in analysis as well. They love everything about it.
Size this market, break-down this problem, understand this idea, bla bla bla…
Eventually, what you are going to realize that there is no analysis that is going to give you the answer. You should consider the analysis as a starting point to guide your thinking rather than making decisions strictly based on that.
There is no such thing, tool or process when you put all your analyses together, they will give you the answer. Don’t spend too much time on analysis which might cause you to get stuck in analysis-paralysis phase.
The first step in testing your product idea is extracting your hypotheses and prioritize which ones are the most critical to your business, which you will then test with EXPERIMENTS (Step 2).
Experiments will allow you to get EVIDENCE (Step 3) that will help either to support the HYPOTHESES created earlier or reject them.
Having the EVIDENCE from your EXPERIMENTS allows you to generate valuable INSIGHTS (Step 4) which will influence your decisions to produce more informed ACTIONS (Step 5).