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Red Harbour Safe Haven for Startups

Growth accelerator for startups & scaleups

Risky Assumptions

What are Risky Assumptions?

During development of your product you sometimes make assumptions, e.g. about the problem of the customers, or about the workability of the solution or about the customer's profile and so on. These assumptions are risky, because you do not know whether these assumptions correspond to the reality. This leads to a risk with regard to the development of the product, which means that you may unnecessarily spend time and money on things that later turn out not to be necessary. These risky assumptions play a role during the problem fit, solution fit and market fit phases. Because you are in the middle of the validation process, you cannot avoid making assumptions. However, it is important to validate these assumptions for correctness. After all, you want to work with as few assumptions as possible. As a rule, the sooner you perform the validation, the better. Prioritize as well. Explicitly identifying the risky assumptions makes you more aware of the assumptions and encourages you to confirm or falsify them as early as possible. This prevents unnecessary investment of time, money and energy.

Identification of Risky Assumptions

Organize an interactive session with the leadership team in which you determine the risky assumptions. If you inventoried the risky assumpions earlier then start with the filled board with the four quadrants and focus on the changes.

 

Step 1

Everyone writes down the risky assumptions (max 10) that he sees on post-its. One risky assumption per post-it.

 

Step 2

Everyone positions the risky assumptions with a brief explanation in the quadrants below. You'll find the template at the bottom of this page. Discuss the risky assumption and the position within the quadrants with each other.

Step 3

Determine the most important risky assumptions. As a rule, assumptions about whether it should be built are more important than whether it can be built.

 

Step 4

Determine how to confirm or falsify the risky assumptions.

 

Step 5

Group the risky assumptions and record them in an Excel sheet. See the template at the bottom of this page.

 

Step 6

Put the board with the four quadrants on the wall at a central - and visible place.

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How often to determine the Risky Assumptions?

Within LEAN Startup you work with short cycles. Update the risky assumptions each cycle. The risky assumptions are a critical part of validated learning and prioritization of the work of the next cycle.