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Feature Title
At Imperial, we are familiar with scientific experiments taking place in the labs. This is essential to make sure medicines work without adverse side effects, materials are strong enough for construction and new fertilisers do more good than harm.
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his evidence-based approach is also essential to building a startup. Failing to test your business idea could result in a lot of time and money wasted. We caught up with David J Bland, co-author of Testing Business Ideas, to find out about the best ways to test, deciding what counts as ‘success’ and knowing when to quit ... We’ve heard before that failure is a big part of entrepreneurship. And whilst many founders can tell you a story or two of when it all goes wrong, there are ways to limit risk. You may have heard the term ‘failing fast’: testing, learning from the results and changing direction when you know it’s not working, before you’ve put too much time or money behind an idea. David Bland, serial entrepreneur and Silicon Valley stalwart, has made it his mission to use his experience to teach fellow founders about the importance of testing business ideas before you get in too deep. His latest book, Testing Business Ideas, co-written with Swiss business model strategist Alexander Osterwalder, is an experiment library consisting of over 40 illustrated business tests, organised by cost, time and strength of evidence, that guide founders as they build an evidence-backed business ready to scale. David recommends a founder start with quick, easy experiments that are free or cheap, and elicit relatively weak evidence, and then, if the evidence validates their hypothesis, move onto
harder, more time- and cashconsuming experiments with stronger evidence. David learnt the importance of testing business ideas in his early career, which consisted of working with various startups, some more successful than others. One was acquired for $16 million, which, as David describes, was “a pretty decent exit for 2006”. But following this success, David joined a few startups that didn’t go quite so well. “What I learned was that if you blindly ignore the data and keep persevering no matter what, you eventually run out of money. Basically, it doesn’t matter how amazing you think it is, if your customers don’t want it, they don’t want it.” This realisation sparked David’s journey to help other founders. David went on to work with accelerators and large global companies to encourage an environment of innovation and experimentation where he crossed paths with Alexander Osterwalder, creator of the Business Model Canvas. “All these founders or small innovation teams just weren’t aware of all the different experiments that are available. So, we ended up writing a book. We wanted to help people say, ‘I’m stuck with something. What can I do to help me make progress?’”
Testing business ideas
Getting started
For founders, the first step to testing a business idea lies in the value proposition and customer segments. David explains: “You need to look for these unmet needs or a
D/srupt The magazine for innovators & entrepreneurs
Issue 3 / 2020–21
