1-Sentence-Summary: Testing Business Ideas highlights the importance of trial and error, learning from mistakes and prototypes, and always improving your offerings in a business, so as to bring a successful product to the market that will sell instead of causing you troubles.
Read in: 4 minutes
Favorite quote from the author:
Building a product, advertising it, and then selling it for a profit can be quite a challenging feat. But many entrepreneurs make the mistake of rushing to bring their products to the market. They don’t do doing proper research beforehand or without doing the necessary preliminary tests. As such, testing products instead of being bold in the market is the first correct step towards success.
An entrepreneur needs a team with multiple cross-functional skills that cover most competencies the business needs. Moreover, they’ll need an experimental mindset, which implies testing concepts over and over again. And a proactive attitude that enables them to look for errors and fix them. Being able to go over the same thing multiple times and not give up requires perseverance and an eye for detail.
Testing Business Ideas explores a multitude of aspects regarding what implies opening up a company and coming up with an air-tight business plan that passes multiple tests. The book focuses on the importance of experimenting with ideas and testing theories to overcome possible failures or challenges that may occur on the way.
Here are my three favorite lessons from the book:
- Start from an idea, then use the design loop to improve it.
- Testing your assumptions is a crucial step in the development of your business.
- Use discovery experiments to examine your assumptions.
Now that we’ve outlined the most important lessons from the book, it’s time to go in detail with each one of them to gain a clearer understanding of what they mean.
Lesson 1: All businesses start from an idea, but always leave some room for design and adjustments
Let’s say that one day you stumble across a great business idea. You cannot wait to draw up a plan and put it into practice. In your mind, this idea seems to be worth millions. There’s no way you can fail by going with it. Unfortunately, this is where most entrepreneurs are greatly mistaken. Many of them rush into the market without considering more perspectives and leaving room for redesigning their concept.
The design loop is a way to tweak initial ideas. It has two phases: the first one looks a lot like brainstorming. You get to idealize and come up with multiple concepts, without stumbling upon only one good idea. The second phase is about narrowing down options and synthesizing your ideas into a few promising options. The author suggests using the Business Model Canvas that he created to go through these phases.
This canvas allows you to write down your opportunities, risks, resources needed, and many other crucial aspects of your business. This helps you gain a clearer vision of what you should work on. This tool is great for building the practical side of your business. It’s also helpful for moving on from your concept to a materialized product of your vision. Another tool the author offers is the Value Proposition Canvas, which allows you to better analyze your customers.
Lesson 2: After designing your concept, it’s time to test it carefully
At the end of the day, your business concept is an assumption. Although you may already see the bright future ahead, it’s always necessary to slow down and analyze everything objectively. As such, write down all assumptions that you made about your business. It can include a certain group of people that will buy from you, or that you’ll gain a given amount of money in a time frame.
Then, test these hypotheses to see if they’re true, and create an air-tight strategy that meets all alternatives. Test your assumptions by looking up information online, finding data on your market and concept, asking people in person about their opinions, or even finding someone who’s done something similar to you and learning from their experiences.
This part of the process is essential for building a successful plan that can stand the challenges of the business world. Make sure to create precise and specific hypotheses, so that you test accurate situations. Use numbers, names, and time frames to your assumptions. For example, you could test an assumption that sounds like this: “I will sell 10 products by the end of February.”
Lesson 3: Testing and experimenting with your assumptions can be done through discovery experiments
The book presents two types of experiments that you can run to test your assumptions and see where you can improve them: discovery and validation experiments. With the first ones, you get to examine your concept and gain significant insights about it, thus determining if they’re right or wrong.
You can run discovery experiments by conducting customer interviews, for example. Start by creating a questionnaire or gathering a focus group. Then, prepare a series of questions to find out about their pain points and what they’d like to fix them. You can also observe your customers during their buying or consuming process, such as in a supermarket.
The point is to gather as much information as possible to conduct your research. Both weak and strong data can prove to be valuable, so make sure to use every resource in this process. After conducting interviews, asking friends or relatives for honest feedback, and looking at real-life data in shopping environments, it’s time to look up secondary data, or web reports and articles. You’ll be surprised by how many insights you’ll come across!
The Testing Business Ideas Review
Testing Business Ideas is a practical guide that walks its readers through the process of creating a successful product, from concept to the final stage. This book will teach you how to experiment with ideas, find relevant insights in your research, and build a product that attracts customers. Reading this book will help you understand why customers’ pain points are relevant, how to find valuable information by observing your prospects in real-life situations and explore many more interesting concepts.
Who would I recommend the Testing Business Ideas summary to?
The 30-year-old person who feels as if they have great business ideas but doesn’t know how to build on them or the 38-year-old entrepreneur who finds that their offerings need improvements to keep up with the market, or the 25-year-old person working in marketing who wants to find more about how a customer’s mind works and how to improve a product line.