As we’ve repeatedly discussed during the semester, the essence of Lean Startup is to develop hypotheses underlying a new business, and then quickly and cheaply test those hypotheses to determine if you’re on the right track with the business. When you get the results of the test, you can then decide whether to persevere or pivot with the underlying business idea. The basic idea is that you want to cheaply and quickly eliminate as much risk as you can from your business idea, prior to your final pitch presentation.
The purpose of this critical assignment is to ensure that your group has fully considered the hypotheses underlying your business, and that you have — or will — test them prior to the final presentation in the course.
For this assignment, you don’t need to do a video. Instead, submit a simple one or two page Word or PDF document. List three or four of the key hypotheses underlying your business and under each hypothesis, describe the test or tests you have — or will — run to test the hypothesis.
Ideally, when the time for the final presentation comes, you’ll be in a position to show investors how you’ve de-risked your business by running actual real-world tests.
Tests can include:
1. Interviews with industry experts or insiders. Be sure to ask them about pitfalls, challenges, problems with your business idea, what they’ve learned, and how you could go wrong.
2. Actually carrying out a sample of your service with real-world customers to see how they react, and then incorporate their feedback into the further development of your business.
3. If you are producing a product, getting it (or a prototype) into the hands of actual users and incorporating their feedback into the further development of your business.
4. Detailed research of competitors to determine why they’ve done things certain ways, what mistakes they’ve made, and how you can learn from them. Ideally, you might want to interview them. Be scrappy!
5. Putting up a landing page for a web-based business and getting users to give you feedback on your approach.
6. Doing video interviews of potential customers to determine what they do and do not value in your market segment, how they react to your customers, and the like.
Remember, the key with this assignment is to demonstrate that you’ve transitioned from dreamers to real entrepreneurs. Embrace the problems with your business. Ask hard questions. Try to poke holes. How will you acquire customers? How will you make money? Is your product technically feasible? How is your prototype coming? How will you differentiate from competitors? Your tests should seek to de-risk your business.