There are many ways to explore open questions and proof your hypotheses in the Validate phase to find out if your business model is feasible, profitable and desired by customers. Experiments never look the same! Their design is highly dependent on your topic, the stage you are in and your team. Therefore, we cannot provide you a blueprint of the RIGHT experiment for your question or hypothesis. In many cases, experiments consist of the combination of several research tools (e.g. a landing page incl. a tracking mechanism plus a survey, see Example: Fake Door Experiment). Create a structured plan based on your open questions / hypotheses (see Hypotheses & Experiments template) for your experiment including
- method(s) & tool(s)
- procedure & period
...and do a try run if possible. While Whenever you want to test the desirability of your offering, think about customer investments as your threshold. While planning your experiments (see Hypotheses & Experiments template), consider the level of reality / evidence of your planned experiments. Some experiments e.g. interviews allow just a low level of reality - even if you include a prototype. It's always an experimental setting. However, the highest level of reality can be achieved when you charge your customer and money comes in. Have a look at the examples for inspiration.
Whenever you want to test the desirability of your offering, think about customer investments.Teams tend to gather and interpret information in a biased way to support their existing beliefs (confirmation bias). Take care that you are a "real" researcher and design your experiments in a neutral way.
Interview with prototype
Face-to-face discussion are a great tool to have a look behind the scenes. After presenting your prototype to users / customers or letting them use it, you can see their reactions and ask them about the reasons for those reactions (Exploration). You will gather a lot of insights that help you to move on in your project. However, interviews are in most of the cases not the right tool to validate hypotheses because of the low level of reality. You can achieve a higher level of reality in face-to-face situations with a sales pitch. Learn more about how to talk to customers in the Validate phase in our separate article.
Survey with prototype
Surveys help you to capture feedback from a high number of participants. There are many tools that help you to prepare, conduct and analyze surveys - especially typical online surveys. Make sure your participants are able to answer your questions about your product or service. Do not carry out a survey until your participants have seen and/or experienced your future product or service in form of a prototype or simulation. A written description is often not enough. Find more details about how to setup a survey in our article.
Software and sensor-based tracking
Tracking tools help you to capture user's behavior as well as other conditions of use when testing your prototype of your new product or service with potential customers and users. In case of a software, app or website there are many tools that can easily be integrated and offer a variety of tracking parameters (like devices, clicks, mouse movement, etc.). In case of a product, you can use sensor-based tracking tools that capture e.g. temperature, pressure, strain and much more. Have a look at our list of tracking tools to find the right one for your experimental setting. For more details, please click here.
(Online) ad campaigns
We need ad campaigns in various experimental settings. (Online) ad campaigns help us to test our sales story in chosen marketing channels. A banner campaign on relevant social media platforms or expert forums give us feedback (in the form of clicks and conversion rates) if our target audience reacts to our sales message on these channels and allow A/B testing of sales messages. Also Google Adwords campaigns let us test our sales message with people looking for certain keywords. You can start conducting advertising tests at a early stage by simply setting up a campaign and redirecting people to your homepage or a coming soon landing page. There is no need to wait until your product is on the market. We introduce you to our favorite advertising options in our article about online ad campaigns.
We like to use and sometimes combine the following tools to explore and validate our business model in Business Design projects:
|Tool||Comment||Level of reality / evidence||Costs|
|Interview with prototype|
Carry out customer interviews about a prototype in order to test your product or service ideas in an open dialogue with customers / users.
As soon as you have developed a prototype for your product or service get your future users to test it and ask them to comment aloud while using your product or service. This will give you valuable insights into how it is perceived and is it is easy to use.
|Discussion with experts|
Experts can help you test critical assumptions about your business model. You should always consult experts if you cannot collect the necessary information efficiently yourself – although it is important to remember, of course, that experts can “only” provide you with their own opinion based on individual experiences.
|Survey with prototype|
Surveys can help you test critical assumptions about your product, service and business model with a high number of participants.
|Profit calculation||Profit and loss accounts can help you at a downstream stage of idea development, if you are unsure about the feasibility or profitability of your business model. Be aware, however, that your calculations are based on assumptions which you still need to test in reality.||Low||Low|
With a landing page, you can test how well your business idea and sales story will play on the market before officially launching them. You can collect contact details for people who are interested in your idea (e.g. notify me on launch).
|Ad campaign||(Online) ads or other promotional campaigns help you to test the likely success (= conversion) of selected marketing channels as well as corresponding sales messages.||Medium||Low|
|A / B test|
A/B tests help you find answers to unanswered questions in order to fine-tune your product or service or your marketing and sales activities. When carrying out A/B tests, make sure you are not comparing two completely different things but two slightly different variants of your product, service or process.
Functional prototypes (of your product or software) are useful when you are unsure about the technical feasibility of certain elements of your product. Using the prototype, you can test the elements you are unsure about in isolation without having to invest in comprehensive development first.
|Medium||Medium / high|
Role plays help you simulate processes / services and test critical assumptions about your business model which are based on the feasibility of certain processes.
|(Closed) Trial||A trial usage test with a selected group of customers allows you to get feedback from potential customers and users after using your product or service in real life for a certain timeframe. Participation is the first indicator if they are interested. Test reports, subsequent interviews or testimonials give you even more insights.||Medium||Medium / high|
|Software and sensor-based tracking||The use of tracking tools allows you to gather insights about user's behavior and corresponding conditions from a high amount of participants automatically without influencing them with your presence.||Medium||Medium|
|Pre-sales||Pre-selling allows you to earn money before actually delivering your product or service. Crowdfunding platforms (like Kickstarter) are typical channels to collect orders before launch. But you can also pitch your offering and collect deposits manually.||High||Medium / high|
|Lean offerings||The lean offerings are your first products or services on the market with a minimum set of features. You charge your customer to allow as much reality as possible. It doesn't mean everything must be ready. You can still e.g. provide your service in a manual way behind the scenes.||High||Medium / high|
- Constable, G.: Testing with Humans (Amazon)
- Bland, D. & Osterwalder, A.: Testing Business Ideas (Amazon)
There are many ways to find out if your business model is feasible, profitable and desired by customers.