{"id":7857,"date":"2020-03-16T10:49:00","date_gmt":"2020-03-16T14:49:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=7857"},"modified":"2022-04-01T14:53:59","modified_gmt":"2022-04-01T18:53:59","slug":"value-hypothesis-growth-hypothesis-lean-startup","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/value-hypothesis-growth-hypothesis-lean-startup\/","title":{"rendered":"Value Hypothesis + Growth Hypothesis (Lean Startup)"},"content":{"rendered":"\n<p>What is a value hypothesis for your startup? What is a growth hypothesis? How do you generate your lean startup hypotheses, and how do you get data to answer them?<\/p>\n\n\n\n<p>Learn more in this excerpt from Lean Startup.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">Introduction to Startup Hypotheses<\/h2>\n\n\n\n<p><strong>Remember that a startup\u2019s <a href=\"https:\/\/www.allencheng.com\/validated-learning-lean-startup\/\">most important function is learning<\/a><\/strong> \u2013 in particular, learning what the customers really want and what will lead to a sustainable business.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.shortform.com\/blog\/validated-learning-lean-startup\/\">Validated learning<\/a> is having testable hypotheses about the world<\/strong>, designing experiments to test those hypotheses, and analyzing the data to evaluate your hypotheses. You have real, quantitative data to show what you have learned.<\/p>\n\n\n\n<p>Lean Startup methodology treats <a href=\"https:\/\/www.shortform.com\/blog\/building-a-startup\/\">building a startup<\/a> as science, like the normal scientific hypothesis:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Create a startup hypothesis. What do you believe that\u2019s important to your business?<\/li><li>Design an experiment to directly test that hypothesis. Run the experiment and gather data.<\/li><li>Reflect on the data \u2013 can you validate or reject your hypothesis?<\/li><\/ul>\n\n\n\n<p>Your hypotheses should revolve around the most important problem of a startup \u2013 how to build a sustainable business around your vision. Commonly, there are two critical hypotheses:<\/p>\n\n\n\n<p><strong>Value hypothesis<\/strong>: does the customer have the problem you\u2019re trying to solve? Does the product actually deliver value to the customer?<\/p>\n\n\n\n<p><strong>Growth hypothesis<\/strong>: how will the company grow once people start using the product?<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Value Hypothesis Anecdote: Zappos<\/h2>\n\n\n\n<p>During the dot-com boom, it seemed like the internet could be a new commerce platform for everything \u2013 books, groceries, even pet supplies. Companies like Webvan started business by building massive infrastructures and supply chains, even before they had proven customer demand.<\/p>\n\n\n\n<p>Zappos founder Nick Swinmurn took the opposite approach. His first action was to test the startup value hypothesis that people actually wanted to buy shoes online. <\/p>\n\n\n\n<p>He took perhaps the simplest approach possible to test his value hypothesis \u2013 he went to local shoe stores, took pictures of shoes, and posted them online. If a customer actually bought a shoe, he\u2019d buy the shoe and ship it himself.<\/p>\n\n\n\n<p>Isn\u2019t this brilliant? <strong>With virtually zero start-up cost, Zappos tested customer demand.&nbsp;for&nbsp;their&nbsp;value&nbsp;hypothesis<\/strong> They didn\u2019t need to stock warehouses full of inventory and manage supply chain issues. This would have been a waste \u2013 they didn\u2019t even know if people wanted to buy shoes.<\/p>\n\n\n\n<p>Furthermore, they measured customer demand in the best way possible \u2013getting people to pay real money. This is a much stronger indication of interest than voicing an opinion on a survey.<\/p>\n\n\n\n<p>From this starting point, Zappos could easily run all sorts of deeper experiments on their value hypotheses and growth hypothesis \u2013 what types of shoes do people want? What policies matter most to them? By measuring what people actually do, Zappos can learn true customer preferences.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is a value hypothesis for your startup? What is a growth hypothesis? How do you generate your lean startup hypotheses, and how do you get data to answer them? Learn more in this excerpt from Lean Startup.<\/p>\n","protected":false},"author":2,"featured_media":7875,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45],"tags":[78],"class_list":["post-7857","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-lean-startup","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Value Hypothesis + Growth Hypothesis (Lean Startup) - Shortform Books<\/title>\n<meta name=\"description\" content=\"What is a value hypothesis for your startup? What is a growth hypothesis? 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