The Founder’s Null Hypothesis

null_hypothesis.png Credit: xkcd.com

Over breakfast, I caught up with a close friend, an entrepreneur who is exploring a number of ideas for his next venture. He and his co-founder want to test their way to success with the Lean Startup Model. But they have added a twist to the Lean Startup process I call the Founder’s Null Hypothesis. Here’s how it works:

First, this entrepreneur assumes each of his ideas will fail - the null hypothesis. Then, he and his co-founder write down a set of milestones or metrics that if achieved or proven would imply the idea is a good one. These tend to be quantitative customer feedback metrics.

Next, the team allocates one to three weeks to achieve the milestones they created. If the team achieves them, they pursue the idea. The team assumes the burden of proof to show an opportunity exists and is worthwhile before writing a line of code.

This approach reminded me of an idea from statistics, the null hypothesis which is a technique for defeating confirmation bias, eloquently described by Francis Bacon:

“The human understanding when it has once adopted an opinion (either as being the received opinion or as being agreeable to itself) draws all things else to support and agree with it.”

It’s easy to fall in love with an idea and create a thousand reasons why it might succeed. But that feeling could be confirmation bias.

On the other hand, if a team assumes all ideas will fail, creates a target for disproving that the idea will fail and exceeds those goals, the team can make a measured and rational decision about which idea to pursue.

14 August 2013

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