Corporates need to find new ways to reinvent themselves and their products. Two instruments can be particularly beneficial in this process.
„We need something new!“
A growing number of big corporations increasingly feel the pressure to innovate. However, complex company structures and complicated processes often don’t allow bigger sized companies to match the innovative capacity of young startups. So how can you prevent these emerging startups to make your company and its products obsolete one day? Which methods can help you create and launch a new innovative product or concept?
This is where tools like hypothesis testing and the Riskiest Assumption Test (RAT) come in handy.
Hypothesis testing is a method used by each one of us in our daily lives and finds some type of application in any business, but it can be so much more powerful if used correctly and consistently.
Just like researchers postulate hypotheses and conduct empirical investigations to prove or falsify them, practitioners can use the exact same method to make statements about the truthfulness of their guesses.
Say you are a producer of beauty products for men. Want to launch a new shaving cream? Before putting money and resources into the launch of the product, scale it down and try it on a small selected number of test persons.
Of course, just like in science, it remains crucial for the validity of your results to choose a representative sample group and conduct the experiment under conditions as close to reality as possible. But with patience and consistent research the chances of you hitting the jackpot at some point, are significantly higher, as Ash Maurya, WSJ best selling author, says: “Achieving breakthrough, then, is less about luck and more about a rigorous search.”
The RAT uses a similar but still slightly different approach. Do you have an idea that you want to turn into a startup? After thinking about it a bit more thoroughly you’ll probably realize that your idea is based on certain assumptions that need to be tested to figure out whether your business idea will work or not.
As the name implies, the RAT is all about finding the riskiest one out of the many assumptions you have and testing it. It’s that one assumption that is a) very likely to be wrong and b) if so, has a big (negative) impact on the success of your business. You find it by asking yourself “What is the one (pre-)condition that must be met for my business to have a chance to succeed?”
Having identified that assumption you simply head out into the market segment that you want to operate in, and test it. Try to use as few resources as possible in order to avoid wasting time and money on projects that do not bring you closer to your goal of launching a new innovative product.
Collaboration is key
Finding time and capable people to apply methods like hypothesis testing and RAT effectively in projects like a venture creation within your company can be challenging. Relying on the help of experienced entrepreneurs like the ones at BRIDGEMAKER enables you to make progress with your new innovative venture while still focusing on your core business.
Contact us for more information on how we can help you create and grow a successful innovative venture.
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