This article explains how to state your assumptions you've made in creating your business and deriving your hypothesis. By declaring your assumptions, you can then design tests to prove them, and go on to validate your business model.
Solverboard enables you to consider your business model against four points of focus, as follows:
- Customer Desirability – who is the customer, what are their problems, what are their wants, what is their propensity to buy, what is our value proposition, how will we go to market?
- Technical Feasibility – how complex is this innovation, what new skills or capabilities do we need, what partnerships do we need, what technologies do we need and what are the risks and opportunities?
- Business Model Viability – what is the cost to develop this innovation, what is the likely revenue, what are the distribution channels and the cost of sales, the net margin and the return on investment? What other benefits or dis-benefits are there?
- Strategic Alignment – how does this align to our organisational objectives, and how does it compare to other initiatives?
When you create your assumptions, Solverboard asks you to assign it to one of the above. This can help you group the assumptions you want your experts to review as part of the expert review evaluation process. The four points of focus also provide a useful prompt to think about assumptions in each one, which can be useful in refining your business model.
You can assign each assumption a score to show how critical it is to your business model. This enables you to prioritise your assumptions, and streamline the testing process by not getting stuck on detailed testing of non-critical assumptions.
The act of conducting experiments on your assumptions results in learnings that can be evaluated and transposed into an initial business case to support the validation of the opportunity.
In summary, the assumption card explores the elements of the hypothesis in more detail and provides the basis for which experiments can be designed and conducted – to prove or disprove the assumptions, your business model and overall hypothesis.
Step by step
Creating an Assumption
- In a Test, click on the Explore tab.
- Click the + Add Assumption button.
- Give the assumption a clear and descriptive name (title).
- Describe your assumption ('We assume that...'), providing a definitive measure you can use to test against.
- State how critical your assumption is, to enable you to prioritise.
- Select the point of focus (Technical Feasibility, Strategic Fit, etc.) your assumption relates to.
- Update the status with the appropriate label.
- Assign an owner.
- Design and add experiments.
Managing the assumption, refining through experiment feedback and drawing conclusions
- Review the learnings from each experiment.
- Observe experiments, status and learnings. Create new experiments if possible until learning is optimised.
- Review the overall results and conclude the assumption as validated or rejected.
- If appropriate update your financial model assumptions with your learnings.