Startup Experiments

every startup is a grand experiment that attempts to answer a question. The question is not “Can this product be built?” Instead, the questions are “Should this product be built?” and “Can we build a sustainable business around this set of products and services?” Why should I run startup experiments?  An idea pioneered by HBS Entrepreneur-in-Residence Eric Ries, lean start-up thinking entails launching as quickly as possible with a “minimum viable product,” a bare-bones creation that includes just enough features to allow for useful feedback from early adopters. The company then releases a quick succession of product upgrades, forming hypotheses and conducting experiments with each new version along the way.   This experiment is more than just theoretical inquiry; it is a first product. How do I run meaningful startup experiments?  “A true experiment follows the scientific method. It begins with a clear hypothesis that makes predications about what is supposed to happen. It then tests those predictions empirically.  The goal of every startup experiment is to discover how to build a sustainable business around that vision,” Eric Ries clarifies. Ash Maury‘s article, How to Identify a Lean Startup, gives these rules for running experiments.

  1. Build a Lean Canvas
  2. Start with what matters
  3. Also tackle the risky parts early
  4. Formulate falsifiable hypotheses
  5. Build an accessible dashboard
  6. Make the results audible to anyone on the team
  7. Run board meetings in a lesson learned format
Experiments could be for Product Features or Markets. However, the goal of all experiments is to help define the problem statement.  Here is simple a template to Plan, Run, Record and Manage startup experiments by Bhaskar Thakur. 1. Start with a guess or  a hypothesis which is of the format: ____<Potential User>_________ needs  ____<benefit>__ because | however _____________________________________    For example, 1.1. HR Managers need qualified resumes because it saves them time and cost.   or 1.2.Single moms need a hyper local social network to help them manage their job and families. 2. The next step should be to reach out to Potential Users and bounce the idea off them. Let the discussion be unstructured however record what the potential users have to say. Make a note of their wishes and needs and record any deviation form your assumption.  There is a trade-off between the number of users you reach out to and time. One approach I have seen working is setting up targets and time frame. Set the targets based on the opportunity cost of the decision. 3.  Next step is to articulate the opportunities using the template from Step 1: ____<Potential User>_________ needs  ____<benefit>__ because | however _____________________________________   For example, 3.1. HR Managers need qualified resumes because it saves them time and cost however they are willing to pay only when they are successful in hiring a candidate. or 3.2.Single moms need a hyper local social network however Facebook does a decent job. 4. Once you have the opportunities articulated, the next step is drafting the Problem Statement from these opportunities. Some factors to consider  at this stage include market size, time to implement, is the feature ‘nice to have’ or is the customer willing to pay (additional) for the feature? and A/B Testing.  A startup is defined by the experiments. The keyword above is “experiments“!  You see, the word experiments gives us the freedom to be brave, to be persistent on crazy ideas and invites everyone to do things that we wouldn’t try otherwise. Online Resources for Startup Experiments ]]>