Updated: Aug 10
In the Ideation Stage, the main goal is to refine and de-risk your business idea before investing more money and time. Specifically, you should be testing your critical assumptions to make sure they are true.
A critical assumption is a belief that you have about your business or your customers, that is the base for how and why you make decisions about your business. You can identify a critical assumption by asking yourself “if this assumption is wrong, will I fail completely or will it make things slightly difficult?” The answer should be “I’d fail completely.” For example, if you are opening a restaurant, you would have a core assumption that the surrounding area has enough demand for your cuisine. Similarly, a technology startup assumption would be that their customers are willing to pay for their tools/services instead of using existing tools or methods. These examples are pretty general, but they should point you in the right direction. Once you have a good list of core assumptions, FounderWay recommends prioritizing them by how critical they are to the success of your idea and then validating them. You will need to correct any false assumptions and update your business plan accordingly. To help track your assumptions and tests, FounderWay created the Validation Framework.
The Validation Framework is built directly from the core sections of the Overview Framework and the MVP Roadmap Framework. We recommend that you go through both of these frameworks first. A solid understanding of the problem you are trying to solve, and how you will solve the problem, will make uncovering your core assumptions easier.
The bottom of the Validation Framework is for tracking your assumption tests, the results of your tests, and what you learned from them. See different ways for testing your assumptions below:
Send out surveys to people in your customer market with questions to help test your critical assumptions. Here are some FounderWay tips on how to create an effective survey: https://Founderway.ai/blog/?7BTYAenE9L4w8nepsvwo
Have a discussion with people in your customer market, with the hopes of validating your assumptions and being open-minded to any feedback or insights that might pop up from the interview. It is okay to get sidetracked if it means accidentally finding out new key pieces or information. Here are some FounderWay tips on how to host a good interview: https://Founderway.ai/blog/?bgPRzyyBsbCL9fhWyJIS
Low tech/cost prototyping
Get resourceful and figure out scrappy and low-tech/cost ways to create key parts of your solution that are connected to your critical assumptions, and test it on people in your customer market.
Landing page sign-up tracking
Create a landing page that has your key assumptions listed as benefits, features, or value propositions that people can easily digest. Send the URL for your landing page out to people in your customer market and see how many sign-ups you can get. If your critical assumptions are true, you should get a good amount of sign-ups. A good amount will vary based on your business needs.
Let us know if you have other methods testing out critical assumptions!
“We do not realize how deeply our starting assumptions affect the way we go about looking for and interpreting the data we collect.” - Sue Savage-Rumbaugh, Kanzi: The Ape at the Brink of the Human Mind