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You May Want To Consider This Ahead Of Your Next Marketing Spend

Ever think, ‘how do I decrease the risk of investment in new ideas, products, or marketing channels so that I can try more ideas more often?’ Really? Me too.

I recently had coffee with Business Model Generation co-founder, Alan Smith, who has this mastered. We were reviewing my new business, Vegan Labs, and discussing how I might create a better process for determining what ideas, in what channels, convert the best. Going through this process and asking tough questions will create a clear path and an understanding of where I should invest my marketing dollars. Simple, but not easy.

“To validate business ideas you need to perform many small experiments. At the centre of any one of these experiments should be a deep understanding of the most critical hypotheses and why you are testing them.” – Alan Smith

Here’s where we netted out. A five step process, in which no step should be skipped.

1) Capture your best idea

• Start with a business model idea or a marketing channel idea, anything related to the desirability on the business model canvas, value proposition, customer segment, relationship, or marketing ideas.

• Viability (can we earn) and feasibility (can we execute) are usually less risky/wrong than our ideas falling into desirability.

• What is our best idea to date?

2) Let’s test it on paper first.

• Poke holes – what don’t we really know about the idea?

• What assumptions are we making? What assumptions need to be true for this idea to work?
• List the concerns and ask, do we really know this and then determine if we want to risk testing it.

• Spend hours poking holes (this is where most people just skip to the next stage, don’t do that).

• Stack rank them in order of what we want to know first.

• Decide what we don’t care about testing – what are the risks we are willing to accept, because we can’t test everything.

3) Create an Experiment

• How are we going to test the most important assumptions? Fastest and cheapest with acceptable data reliability to the level of risk we’re taking.

• How can we do this really small – no excuses, don’t make it big or wait one more week.

• To test this we will __________ and measure ________ metric.

• Determine success criteria, how will we know we are right?

4) Review evidence and next steps

The learnings that come back are often not what you thought so don’t be afraid to let go of what the original hypothesis was or what you thought success was to look like. Focus on learning.

• This was the result, this is what we saw.

• Distil down to a few insights.

• From the insights, determine what I’m going to do next, what will stay the same, what will change?

5) Go back and adjust your idea – repeat for any assumptions you don’t want to risk.

That’s the system I’m using ahead of pouring any fuel on any potential channel fire. It’s simple when you lay it out this way, but not easy to have the discipline to do it. But, it’s worth it

I use Trello to manage this process. Any time I have an idea it gets dropped into the idea list. Then I move each idea through hypothesis to insight.

 

Alan’s company, Stratgyzer has a number of blog posts on this topic that may be of help with you on your journey. Check out Lean Startup Essentials To Reduce Risk, How To Track The Progress Of Your Business Experiments and Why Lengthy Business Plans Increase The Risk Of Failure.

If you have any questions let me know.