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Hypothesis Action Cards: A tool to translate assumptions into testable and precise hypotheses

At MTI² we are always searching for “best of breed” tools. We were inspired by Alex Osterwalder’s recently introduced Test Cards. Yet, to make Test Cards very actionable, we transformed them in Hypothesis Action Cards. Therefore, the tool we propose helps innovation teams not only clarify which experiments or tests to run to validate their idea, but pushes them to plan a clear roadmap for action (what? who? when?).

What is it?

Hypothesis Action Cards have two parts.

In the first part, our HACs require innovation teams to examine the critical assumptions in their business case and transform them in explicit statements about:

· The underlying hypotheses that support their business case. I.e., what needs to hold (in terms of market or technology, for instance), for the idea to work and succeed?

· What type of experiments or tests can we run that allow us to verify if the hypothesis holds (i.e., we are right) or needs to be rejected (i.e., our assumption was wrong)?

· What metrics or indicators are we going to gather/measure to test our hypotheses?

· When do we consider that the hypothesis holds (i.e., we are right) or needs to be rejected? What are the criteria?

This first part of our Hypothesis Action Cards looks as follows:

Hypothesis action card example to use in validating business assumptions part 1

In the second part, our HACs require innovators to translate the testing plan above into a concrete, actionable roadmap for implementation. To do so, this second part basically pushes the innovation team to answer the following questions:

· What actions do we need to take to make each of our tests or experiments a reality?

· For all of the actions enumerated, who will own that specific action?

· When will it be done?

· What resources do we need, to conduct this action in the most efficient way (i.e., what are the minimum resources we need to conduct this action quickly, but in a robust manner)?

This second part of our Hypothesis Action Cards looks as follows:

Hypothesis action card example to use in validating business assumptions part 2

How to make a Hypothesis Action Card?

The best way to build Hypothesis Action Cards is to focus on the most critical business case assumptions. Thus, the best timing to build an Hypothesis Action Card is shortly after the innovation team has prioritized which business case assumptions to test, for instance with the help of the Assumptions Matrix tool.

Do you want to find out how we bring this into practice? Check out our Takeoff Analytics page to identify the tools and research methods you could use.

Once you have your list of assumptions, the next step is to clarify each assumption to ensure it is written as a testable hypothesis. This means that wording of the hypotheses needs to be very concrete, just as when you design a (scientific) experiment. For instance, rather than testing if “there will be customer interest for our solution”, write something like “Firm X will have an intent to collaborate/buy from us, should we develop this solution”. The first statement is rather vague and unclear how you could test it. The second statement points to the need to ask a letter of intent from Firm X.

Finally, once the assumptions are clear and the extent to which each of them can block the business case (importance) and how costly it is to test, you are ready to prioritize which assumptions you will test first. Two tips at this point: (i) it is important to focus on the most critical assumptions (better to test the 3-4 most critical assumptions properly than test 9 or 10 superficially) and(ii) it is important to think of a time frame for the testing to take place (to avoid sliding timelines…).

You should then write down a concrete roadmap for implementation, which means breaking down the testing of an hypothesis in concrete actions. For the example above (“Firm X will have an intent to collaborate/buy from us”) a set of actions could be:

i. Call firm X

ii. Set up a meeting with department Y in firm X

iii. Prepare script for the meeting/interview

iv. Conduct meeting

v. Prepare letter of intent

vi. Convince firm X to sign (align on mutually agreeable version)

vii. Receive signed letter of intent, get person Z in our firm to also sign…

Next, For each of these actions, indicate (a) who is responsible, (b) when can it be done and (c) what do you need to get the test done. This creates a roadmap to guide the team through the testing process.

Why do it?

Hypothesis Action Cards offer four key benefits for an innovation team. The figure below summarizes each of these four key benefits:

To Conclude

Hypothesis Action Cards are great to help you structure the experiments and tests you will run to validate your idea. They force innovation teams to translate assumptions that in a business case are still somewhat vague into concrete testable propositions. They also push the team to translate such testable propositions in a very concrete roadmap they can follow to test and make sound conclusions about the robustness of your business case.

Once you have the results of your tests and experiments, it is important to extract valuable insights from such tests and experiments. To help you with that, we propose our tool “Result Cards”, which we will discuss in a subsequent post.

Want to get started with our Hypothesis Action Cards yourself? Download our tool here.

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