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The Opportunity Space for Business Experiments

Do you need to have a fully-fledged, ready-to-go, solution before you can launch something relevant to customers? Lean Startup shows that this is not the case. You can get early versions of your solution to specific groups of early adopter customers, and use that to build momentum towards a fully mature product. A smart way of mitigating the great likelihood of not getting the solution right on your first go.

Many know and apply this principle, but where does this counter-intuitive process come from? What provides for this opportunity to experiment with solutions that are not ready to fully service a market, yet learn about real market potential?

Recently, I looked back to a classic explanation of value propositions by Marketing Professor Mohan Sawhney, and it gave me some idea of the origin. As he states:

“A value proposition is a promise of value that customers can expect from your product. […] It is the expectation of value that makes customers commit to you, before they actually experience the value”

So, the customer experience, which fuels their willingness to commit, and buy, is not driven by your solution, but by the expected value of using the solution. There is a long space of experimentation opportunity from communicating the promise of value, to customers actually experiencing it, where you can get customers to commit.

This insight explains why such things as landing pages on the internet can work for early stage solutions. Can you communicate it, and will they respond? It also explains how you can find early customers that want to buy your solution: Do they understand what the solution helps them accomplish, and are they enthusiastic enough to get their hands on it, and even willing to pay up front?

The point I want to make with this post is: don’t default to default business experiment design solutions, like a concierge model, or a wire frame of an application to test your solutions. That puts the “what” before the “why”.

Rather, start with the principle of business experimentation, and your particular idea, and ask yourself: What opportunities do we have to deliver a credible promise to customers that will incite them to commit? The ability to experiment is what follows after.

BTW, if you like these posts, and want to have more, then drop us a comment on the Source forum, or engage with Source on Twitter.

Here’s Mohan’s full explanation:


@george.dita and I discussed a lot about when the scientific method is overkill in a business context at our LIF prep offsite. Basically, a 16 year old boy repairing a car engine may be following the scientific process to troubleshoot, but won’t be documenting the process like a scientist (or like we propose with test cards).

One of my realisations recently is that i’m interested in this topic because experiments are excellent tools to make informed decisions in conditions of high uncertainty. That’s been a thread through a lot of my career (startups, hedge funds, software, etc). I feel like there is still a lot more to cover before it’s useful and intuitive for people, even if they dont come from a Science’y background.

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Thank you Luke. I agree with your comment. I think it may also be ignored or confuse when we use scientific terminology, i.e., hypothesis, in an arena where we are used to a certain process for product development. Possibly using phrases like, let’s just try it, could we experiment – may resonate better. Do we try to figure out a way to document in the business context?

Wow, this has just given me the push to start what I had wanted to do for a while now. Thanks.

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