Assumptions, Market Research

1.

Identifying & Testing
Assumptions, Market Research
NVC- Week 7
Alisher Ismailov

2.

Agenda
What are assumptions?
How to identify assumptions?
Testing Assumptions
Experiments

3.

What are assumptions
• Business assumptions are things that you assume to be true for the purpose of
making decisions, developing strategy, and planning.
• These conjectures are generally standardized as disclosure of uncertainty and
risk.
• Any new business with a product that has not previously existed must make
assumptions based on logic and research.
• Without identifying and rigorously testing your assumptions, you will not know
if they are valid.

4.

Typical
Assumptions
Financial
Resources
• Access to capital
• Access to loans
• Sales Volume
• Profitability
• Cost of funds
• Human resources
• Intellectual Resources
• Infrastructure
Scheduling
Customers
• Time to launch
• Time to produce
• Time for Research
• Customer Persona
• Customer Number
• Customer Preferences
• Customer Segmentation
• Customer buying Intention
Competition
• Number of Competitors
• Competitor Strategy
• Competitor brand buying
intention

5.

Typical
Assumptions
Technology
Marketing
Business Know-How
• Feasibility of technology
• Industry Life Cycle of
Technology
• Technology adoption
• Ability to attract business
partner
• Beachhead market
• Customer retention
• Industry knowledge
• Entrepreneurial Acumen
Procurement
Economic & Political
Factors
Compliance & Regulatory
• Acquisition of Partners
• Acquisition of Raw material
• Acquisition of Technology and
machines
• Stable International Relation
• Political Stability
• Exogenous factors are constant
Legal
• Assumptions about legal
proceedings and outcomes
• Assumption about laws
• Assumptions about Industry
Standards
• Assumptions about
administrative procedure

6.

PESTLE
Analysis

7.

Competitive
Analysis

8.

- Students are diveded into four groups
- Students are allowed to use the Internet for the research
purposes
Exercise
You are opening a PC store, where you are going to sell Gaming
PCs
Create a brief PESTLE analysis and Porter’s Five Forces for your
store.

9.

How to make
assumptions
Step #1: Define your IDEA in one sentence (Problem and Idea)
• Problem: Glasses get fogged while wearing regular masks
• Idea: Masks for glass-wearers. We are calling them Clear Masks
Step #2: Create a “We believe” Hypothesis
• Make an ABC Statement, i.e. We believe that…target market A…has a
problem B….and will do C (action)
• We believe that people who wear masks with glasses suffer from foggy
glasses and, therefore would like to buy Clear Masks to have clear vision.
Step #3: Create an XYZ Hypothesis (Testable Hypothesis)
• X: A specific percentage of your target market
• Y: A clear description of your target market.
• Z: How you expect the market to engage with your idea.
• At least 20% of people wearing glasses with masks between the age of 3045 in the US, will pay $25 dollars for a Clear Mask.

10.

How to make
assumptions
• Step #4: Break your XYZ Hypothesis into PROBLEM and
CUSTOMER Segment
What is the problem? One-liner
Customer segment
The root cause of the problem
Alternatives
What will happen if the
The problem is not solved. How does it impact the customer?
What is the impact in numbers e.g., Time, revenue loss, cost overrun
How will the future look like if the problem is solved? What Positive Impact?

11.

How to make
assumptions
Step #5: Flesh out your ASSUMPTIONS
Now you need to flesh out the underlying assumptions in your defined XYZ Hypothesis, Problem Canvas, and
Customer Canvas through 3 key filters
DESIRABILITY – Do they want this? The focus here is on the problem and the customer. Start by answering
these questions:
Who are the target customers of our solution?
What problem do they want to solve?
How big is the problem for them? Are they frustrated, or are they ok to live with it?
How do they solve it today? Or are they actively looking for a solution?
Why is the current solution, if any, not awesome?
For Clear Masks – this is how we would answer them:
Target customer: people with glasses in the age group 30-45
Problem: People wearing masks with glasses are suffering with foggy vision and discomfort
Problem size: It is a discomfort for almost 8 hours a day
Any alternative solution: Don’t use glasses with masks; keep cleaning it throughout the day; buy
expensive non-foggy glasses
Big dis-satisfaction: It’s a constant discomfort to clean glasses throughout the day. To solve this
problem there is no cheaper alternative.

12.

How to make
assumptions
VIABILITY: Should we do this? The focus here is on having a viable business model. Is it a
solution that will make money?
• How big is the target market?
• Who is our main competition?
• How will our solution generate revenue?
• How would we acquire our customers?
• How would we ensure they will actively use our solution?
For Clear Masks – this is how we would answer them:
• Market Size: 164 million people in America wear glasses
• Competition: Anti-Fog spray for $18; limited use
• Revenue Stream: We will sell clear masks for $25
• User acquisition channels: Partner with optical providers, sell on amazon, sell on
a website (via ads on Facebook and Instagram)
It will last for six months; after that, they will have to buy a new one; we will
create them in fancy designs

13.

How to make
assumptions
FEASIBILITY: Can we do this? Here the focus is on engineering, development, legal, and compliance
challenges.
Try and answer these questions:
What is the most considerable technical or engineering challenge?
Are there any legal, compliance, or regulatory hurdles?
Do we have enough funding to do it?
Do we have access to the right skills required to make it happen?
Is there any internal bureaucracy/hurdle that we need to address?
For Clear Masks – this is how we would answer them:
Technical Challenge: Could we 3D print a nose bridge that is comfortable and looks cool?
Legal challenge: There is NO legal challenge. We might have to check whether this kind of
product falls under the category of medical products. Do we also have to check if we can
patent it?
Funding: We have $250.000; we should check if it’s enough
Skills: We have a product designer, but we must check how we will produce it and where?
Internal Hurdle: Our leadership might kill this because this does not fit into our core
business model

14.

How to make
assumptions
• Step #6 – Find your CRITICAL UNKNOWNS
• On the x-axis, you have known and unknown, i.e.,
depending on how much evidence you have or don’t
have to support an assumption, you place it on the xaxis.
• On the y-axis, you have critical and uncritical, i.e.,
depending on how critical an assumption is for your idea
to succeed, you place it on the y-axis.
• You place an assumption on the left if you can produce
relevant, observable, and recent evidence to support an
assumption. And remember, your evidence should not
come from research data.

15.

Testing Assumptions
After identifying assumptions, apply appropriate tests to
validate
Designing good experiments requires you to be
systematic and think creatively
You can run EXPERIMENTS. They are the best way to
reduce the RISK and UNCERTAINTY of a new idea.
There are 3 types of
experiments:
Problem & Customer Experiments
Solution Experiments
Viability Experiments

16.

Problem Experiments
• Problem Interview (B2B)
• Connect with 80-100 relevant customers on LinkedIn
• via automated campaign
• Invite 5-10 of them for an interview
• Validate the problem you want to solve with them
• Get emails of 80-100 prospects for future experiments
• MEASURE?
• How many people mention your problem as their top
problem?
• How frustrated are they with the problem?
• It’s a slow but cost-effective method with good data accuracy

17.

Problem Experiments
• Storyboard and Illustrations (Problem)
• Create a visual story of your idea (mainly focusing on the
problem)
• Add customer journey in the illustration
• Use it to communicate with your customer and tell them a story
• MEASURE?
• How many understand your value proposition?
• How many of them are excited?
• It’s a speedy but less accurate method

18.

Problem Experiments
• Brochure/Flyer
• Create a 1–2-page brochure, flyer, or tear-away flyer
• With a sales pitch - explain the problem and solution
• Add call to action - like call us, email us, WhatsApp us,
scan the QR code
• Distribute 100-200 to relevant audience
• MEASURE?
• What is the number of people who call/email/WhatsApp
back?

19.

Problem Experiments
• Keyword Research
• Write a few short and long tail
keywords you think your
• The customer would use to explain
the problem
• Use tools like Google Analytics,
ubersuggest, SEMRush, Ahrefs,
• Exploding topics
• Check trends, volume, quality, and
intent of keywords
• MEASURE?
How most of the customer explain the
problem?
Volume of keyword search?
Trends that are picking up? (Growing
keywords)

20.

Solution Experiments
• Design Prototype
• Create a design of the product you want to develop in Dgital Sketch
or Hand Drawing
• Install it on your phone or your laptop
• Test this with 5-10 users to get feedback on features and user flow
• Ask users to pre-book it
• MEASURE?
• Do they feel comfortable with the solution?
• Do people understand the solution?
• How many people are willing to pre-book it?

21.

Solution Experiments
• Product Demo Video
• Create a video with a walkthrough of
your design prototype
• Share this video on social media
groups – pretending to be a beta user
• Ask them to sign up as a beta testers
• MEASURE?
• What do people say about the
product in the comments?
• How many people sign up to be
beta testers?

22.

Solution Experiments
Online Communities
Join 2-3 relevant groups on Facebook, Quora, Reddit, LinkedIn, Slack, Telegram
Create a post to inform about your product
Bring traffic to the landing page
Engage with the comments - if any
MEASURE?
• What is the number of people who click the link to the landing page?
• What is the number of people who book demos or sign up as beta testers?
https://www.britishcouncil.uz/en/programmes/education/future-english/onlineteacher-community

23.

Solution Experiments
• No-Code MVP
• Build a fully functional MVP using no-code tools
• Acquire some users for the product
• MEASURE?
• How many users actively use the product?

24.

Viability Experiments
Wizard of Oz (or Concierge)
The Wizard of Oz prototyping and Concierge Testing are two
experimenting methods to test solutions for customer
problems.
It involve human interaction which makes them seem similar,
but they’re not. The difference is the fact that with Concierge
Testing, the customer knows that a human is providing the
solution.
While with The Wizard of Oz prototyping, the customer thinks
it’s a working technology that is providing the solution.
Create a front shop for customer to learn and order the
service/product
Whatsapp, chat on website, no-code app, e-commerce, sales
pitch etc.
Let the user order the service/product
Fulfill the service/order manually
MEASURE?
Number of people who view the offer?
Number of requests/orders that are placed?
How much are people willing to pay?

25.

Viability Experiments
Letter of Intent (for B2B)
• Get a letterhead with your brand, logo
and colors (mainly for B2B customers)
• Get a letter of intent (LoIs) for your
product and service
• Make it custom for 5 customers
• Ask them to sign it via digital service
• MEASURE?
• Number of letter of intents you
can get?