Business as a Science Experiment

AKA the X step process to showing that your business idea doesn’t suck

The null hypothesis is that no one will use your product and no one cares about your company.

“70% of upstart tech companies fail — usually around 20 months after first raising financing” (CB Insights) and, in general, 90% of start-ups fail (Forbes)

Top 12 reasons found by CB Insights (and aggregated into three buckets by me)

75% Flawed Business Model / Regulatory Challenges / Ran out of cash

45% No Market Need or wrong timing

47% Bad execution: wrong team, poor product, out competed or burned out

Further Reading

Why Startups Fail: Top 12 Reasons l CB Insights

From lack of product-market fit to disharmony on the team, we break down the top 12 reasons for startup failure by analyzing 110+ startup failure post-mortems. Startups, corporations, investors, economic development folks, academics, and journalists all wanted some insight into the question: So we gave those post-mortems the CB Insights data treatment to see if we could answer this question.

https://www.cbinsights.com/research/startup-failure-reasons-top/

Here are 406 Post Mortems of Start-ups

406 startup failure post-mortems

It's hard to say goodbye. A compilation of startup failure post-mortems by founders and investors. Of his many failed experiments, Thomas Edison once said: " I have learned fifty thousand ways it cannot be done and therefore I am fifty thousand times nearer the final successful experiment."

https://www.cbinsights.com/research/startup-failure-post-mortem/

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If we can test the Market Need and Business Model, perhaps we can increase the probability of success from 10% to over 50%!

If we can test out ideas quickly enough and cheaply enough, then we test several ideas before we find one that works.

How is this different than just following the Lean Startup or building an MVP?

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Do not try to show you have a GOOD IDEA, you prove that it is NOT A BAD IDEA

The biggest issue with most of these approaches is that that all want to VALIDATE your idea. Essentially you have a thing and you talk to users to see if they like the thing.

By looking to show that your idea is bad, you cast a wide net searching for flaws in your business model. You look for cracks in your user’s behavior.

Business as a Science Experiment

The null hypothesis is that no one will use your product and no one cares about your company.

How is this different than just following the Lean Startup or building an MVP?

Read more about your “Not a Bad Idea”

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