Q&D testing of "killer assumptions" … If you can’t GET the data, then CREATE it.

TakeAway: By becoming skilled at experimentation, innovators can gain a competitive edge.

STRATEGY & INNOVATION, Not-So-Risky Business, September 16, 2009

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By systematically attacking the most critical unknowns with tailored, low-cost experiments, innovators can systematically “de-risk” their strategies and thereby increase their chances of success while lowering the associated investment cost.

Systematically testing “killer assumptions” with quick experiments can create the data otherwise not available in market research reports but necessary to move forward to the next step, whether that step is doubling down, re-vectoring, or folding.

This type of approach is generally most critical when data doesn’t exist in market research or other reports, but rather exists in behavior that hasn’t yet happened or outcomes that can only be learned in market. In other words, if you can’t GET the data, then CREATE it through market experiments.

In other words, the goal is to run early experiments up front to gain critical pieces of information that can enable re-vectoring early and increase odds of success at a lower price tag.

“Test and learn” is the mantra. Invest a little and learn a lot is the approach.

And, the prizes over time come in the shape of lower investment costs, more innovation opportunities, and higher odds of success. Again, just remember “invest a little, learn a lot.”
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The first step is detailing “killer assumptions” by assessing risk, confidence, testability:

  • How important is it for this assumption to be true?
  • How confident are we in this assumption?
  • How easy would it be to test this assumption?

Then, start experimenting …

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The best experiments:

  • Isolate the variables being tested and keep it to one (or perhaps two) at a time
  • Keep the experimentation quick & dirty (Q&D) … not elaborate or expensive

Get out of the lab and office and into the “real world
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Armed with information from experiments, make one of three immediate choices:

  1. Double down and continue to the next assumption,
  2. Re-vector and accordingly re-assess the killer assumptions involved,
  3. Determine that it is time to cut your losses and fold.

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Full article

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