'Test ideas to reduce the risk of failure'
The external disruption/internal reaction pairs (Core teams) or problem/solution pairs (Edge teams) you described in the last phase are all sets of hypothesis that now need to be tested and evaluated.
Hypothesis must be testable, precise and discrete and generally you can group them into Desirability Hypothesis, Feasibility Hypothesis and Viability Hypothesis.
Begin turning the key assumptions underlying your idea into a clear hypothesis that you can test.
A well-formed business hypothesis describes a testable, precise, and discrete thing you want to investigate. A business hypothesis in Lean Startup terminology is defined as: an assumption that your value proposition, business model, or strategy builds on. It is what you need to learn about to understand if your business idea might work. Learning what does not work is also valuable for your next iteration of the idea.
Your No #1 job as an innovator is not just to get the idea -but more importantly to validate the underlying assumptions and thereby reduce risk for others in investing in it.
Characteristics of a good hypothesis
Feasible: Can we do this? Can we access the key resources, technology, IP etc.?, can we manage the key activities`? Do we have the key partners? Use post-its (in Miro/Mural or similar) on the left-hand side of the Business Model Canvas.
Desirable: Do they want this? Is our targeted customer segment buying into the Value Prop? Is the market segment (initially the early adopters) large enough? Can we reach, acquire and retain the customers? Use the Value Proposition Canvas to create hypothesis on customer profile and value map. Use the Business Model Canvas when describing hypothesis on customer segments, channels, value proposition and customer relationships.
Viable: Should we do this? Can the business generate the revenue we anticipate, can we keep cost down (10x)? If you find it hard to write clear, testable hypothesis about Cost and Revenue at the buttom of the Business Model Canvas, it is often due to lack of clarity on how you plan to generate revenue and what the cost elements are. Work this out is more detail before you write the hypothesis to be tested.
<aside> đŸ’¡ Are you new to the Business Model Canvas? Then visit the original source of the canvas to learn more:
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Business Canvas -Â Business Models & Value Propositions
We find it helpful to use the Assumptions Map to prioritize all your hypotheses in terms of importance and existence or absence of evidence that supports different types of hypotheses. Mark Problem hypothesis and Solution hypothesis separately (color coding) to keep them separate (although they can coexist in the same diagrams).
