Formulation of hypotheses is an integral part of product development, customer development, marketing, scaling, team management and/or any other activity that is in one way or another related to business. It doesn’t actually matter whether you’re the owner of the product, manager, or a designer — anybody can become the source of a hypothesis. What matters is that with the help of hypotheses it is possible to make sure that the decisions made in the process of optimisation are correct and effective.

What Is a Hypothesis?

Before further speaking about hypotheses, their types and importance it is necessary to understand what a hypothesis is. The word hypothesis was first recorded in the 16th c. and originates from the ancient Greek word ὑπόθεσις, which means ‘putting or placing under’. From a scientific point of view, hypothesis can be defined as an assumption that requires proof. Accordingly, a hypothesis seeks to reveal and explain why something happened or what might happen under certain conditions, and is a valuable tool that allows to verify if the company’s thoughts and expectations are correct before putting them into action.

How to Formulate a Hypothesis?

In order to understand the need for and importance of hypothesis testing, let’s consider an example. When a member of your team says, “Let’s do this like this!”, it is not a hypothesis. When the other member of your team says, “No, we don’t need to do his, because I think it won’t work”, that is also not a hypothesis. A real hypothesis might be formulated as follows: “Let’s remove half of registration fields and we will increase registration rate twice, because users don’t want to fill in a lot of fields.” Hypotheses are not your personal opinions or wishes; hypotheses need scientific approach and require investigation. Therefore, precise and correct formulation of hypotheses as well as their rejection or validation can save business persons their precious time, money and a bunch of nerve cells.

Types and the Value of Hypotheses

When it comes to running a business, there is a certain amount of risk. The true value of a hypothesis lies in the fact that it allows to test ideas, theories, presuppositions before implementing them and applying resources to something that might fail. Taking into account the customer development model, it is possible to distinguish 4 types of hypotheses for every of its steps: problem, solution, segment and growth. Problem hypothesis can be formed to check whether there is a problem that needs to and can be solved. Solution hypothesis can be developed to see if the solution fits the customer who has a problem. Segment hypothesis can be used to examine whether there is a problem in a certain segment and if that certain segment will love the solution we offer. Finally, the growth hypothesis can be run to get to know how to grow your company faster.

Summing Up…

Despite the fact that hypothesis is defined as an assumption, it still has to be based on prior knowledge, experiments, research, and theories (more about hypotheses, experiments, verification methods, etc.). Hypotheses testing not only allows to accept or reject an idea, theory or a decision, make business owners or anyone for that matter feel more confident, but also identify new opportunities and/or reduce threats on the way to success and making your company more profitable and efficient.