Testing Business Ideas

Experiment Selection

Pick the right experiment by asking these three questions:

1. Type of hypothesis: What type of hypothesis are you testing? Pick experiments based on your major learning objective. Some experiments produce better evidence for desirability, some work better for feasibility, and some are more appropriate for viability.
2. Level of uncertainty: How much evidence do you already have (for a specific hypothesis)? The less you know, the less you should waste time, energy, and money. When you know little, your only goal is to produce evidence that points you in the right direction. Quick and cheap experiments are most appropriate for that goal, despite the generally weak evidence. The more you know, the stronger the evidence should become, which is usually achieved by more costly and lengthier experiments.
3. Urgency: How much time do you have until the next major decision point or until you run out of money? The selection of the right experiment may depend on the time and money you have available. If you have a major meeting with decision makers or investors coming up, you might need to use quick and cheap experiments to quickly generate evidence on multiple aspects of your idea. When you are running out of money, you need to pick the right experiments to convince decision-makers and investors to extend funding.

Rules of thumb

1. Go cheap and fast at the beginning. ...