Tue, Feb 26, 2013

Hypothesis Testing

After yesterday’s post on After Action Reviews (AARs) I had a lively discussion with a fellow entrepreneur about the process. It struck me that, although he did a form of AARs after each software release, he never went into the process with a clearly formulated hypothesis to begin with.

Remember your high school math class? The one where you spent hours formulating a mathematical hypothesis and then run it through its paces to prove or disprove the theorem?

Running your business is no different. You need to be clear about your hypothesis to gain relevant insights into your experiment. The AAR then serves as a structured feedback process which will yield deep insights.

Each iteration of your project should be directed by a clear hypothesis — for example you redesign your website to increase your sign ups by ten percent. Be clear, concise and formulate a hypothesis. You might be wrong (and most likely you will be wrong — as no plan survives contact with the enemy) — but you have a starting point from which you can make judgements about wether or not the change was an improvement or not. Plus your AAR might reveal interesting externalities (for example you increase your sign up rate but end up with much more inactive users in your system), which in turn will be an incredible insight for further iteration.

P.S. Help me spread the word about The Heretic. As we are nearing our 100th edition, feel free to invite your entrepreneurial friends into our little circle of Heretics. And upvote The Heretic on Hacker News! :)

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