Testing Assumptions

What are the things you know… you don’t know?

Validation Stages

  1. Iterating and validating assumptions (have validated solution which demonstrates initial user growth and/or revenue.
  2. Key Performance Indicators (KPI’s) identified.
  3. Can start to attract additional investment-based resources (money or sweat equity) for equity, revenue share or future revenue.

Validating

There are two ways to validate. ‘One method is to just build it, throw it out into the world, and see what happens. This is often called the Minimal Viable Product (MVP). When that works, it’s an excellent way to approach the problem. However, that one little thing that’s a bit better than what others offer might take you three months to actually build. Therefore, you want to go out and validate the idea further before you start building’.

The other approach is that you ‘take the idea and draw diagrams of what it would look like (work flow) and put that in front of people. The one thing you don’t want to do is ask them about a great idea for a feature, instead ask them, are you excited about this?’.

What’s Minimum?

This is highly dependent on the particular context. ‘Usually the best thing you can do is just hack something together. In cases where you are actually trying to get people to spend money, it gets a lot easier. Sales is the cure-all for this problem. If you can get people to give you their credit card, they are actually interested in the feature. This is one of the most validating things that you can do for a product (actually getting customers to commit to pay you up front)’.

Avoid Tradition

The traditional approach to validation is ‘going through huge amounts of data and time looking through Google Analytics, Mixpanel, and in-house analytics tools. This is all done to try and figure out how people might use the product or service, where the traffic might come from, completion rates etc. You can learn things from that. However, that data doesn’t tell you what the problems are you need to address. Many startups invent these ideas without talking to someone and nine times out of ten, that idea turns out to be bad’.

Disappointment

‘One of the most disappointing things you can do is user interviews and getting user feedback. it’s disappointing because you’re going to get negative news about your favorite feature most of the time. You might have this great idea, and you’re going to talk to users however; it’s going to turn out that nobody actually wants it. This is because the user is actually concerned about a completely different set of things, and they don’t care about what you thought was important’.

 

Validation Board

‘The Validation Board only works well if you test your idea or concept with proper assumptions. Finding a customer and problem hypothesis that fits with your vision is often not that hard. However, startups with innovation projects often have more problems in finding the proper assumptions’. So what are (good) assumptions? Assumptions are:

The things you know you don’t know, and if not validated, make your current business idea impossible to sell or even launch.

It always helps to get out of the building, talk to – and understand customers (potential), and give them structure when making pivots around their ideas or concepts. The good thing about the Validation Board is that it combines the structure & methodology that corporate people are used to with the agile way of working of a start-up. The Validation Board forces you to test systematically, report on results and iterate on the very same sheet and on different versions of a canvas.

The Validation Board:

1. Helps formalize your customer segment and problem statement.
2. Helps test assumptions one by one – starting with the riskiest one.
3. Helps design your experiment (or MVP), and the success criteria (before you run the experiment).
4. Helps track the results of your experiments overtime.
5. Helps you focus only on the problem, and customer segment at the beginning (later include the solution).

Tips and Tricks

  1. Write 1 assumption/solution/customer/… on 1 Post-It note. This makes everything clear and understandable.
  2. Within a business model, different stakeholders can be involved. You can use different validation boards at the same time to test different “customer hypothesis” eg. One for B2B, one for B2C, …
  3. Print the Validation Board as a big A1-poster. If you can laminate it, you even can write on it with whiteboard markers!

 

Source: ValidationBoard.com
Download ValidationBoard Worksheet (pdf)

Validation Board (4:00)

Trevor Owens

A tool to test startup idea, without wasting time or money.

NOTE: video starts & stops at pre-assigned times

Experiment Board (6:00)

Grace Ng

Turning your ideas into experiments.

NOTE: video starts & stops at pre-assigned times

ACTIVITY

Validation + Experiment Boards

  1. Complete a Validation Board for your startup idea now!
  2. Create an Experiment Board in order to turn your ideas into experiments (follow guidelines in video above).

Validation Board Worksheet (pdf)

Create Boards Now!

Course Curator: Dr. Gerard L. Danford 

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