# Assumption Testing

## Purpose
Identify and validate critical assumptions your idea depends on, separating what you know from what you believe.

## When to Use
- Validating new business ideas before investment
- Refining GTM strategies
- When the idea has many unknowns
- Before making resource commitments

## Process

1. **Brain dump all assumptions**
   - List everything you believe to be true about:
     - Customers (who they are, what they want, willingness to pay)
     - Market (size, growth, competition)
     - Execution (your ability, resources, timeline)
     - Business model (how you make money, unit economics)

2. **Categorize assumptions**
   - **Known**: Evidence-based facts
   - **Assumed**: Unvalidated beliefs
   - **Unknown**: Things you don't know yet

3. **Prioritize by risk**
   - **Critical assumptions**: If wrong, the idea fails
   - **Important assumptions**: If wrong, major pivot needed
   - **Minor assumptions**: If wrong, adjust and continue
   - Focus on critical assumptions first

4. **Assess validation difficulty**
   - **Easy to test**: Can validate in days/weeks with low cost
   - **Moderate to test**: Requires some time/resources
   - **Hard to test**: Expensive or time-intensive to validate

5. **Design minimum tests**
   - For each critical assumption, create the smallest test:
     - Customer interviews (5-10 target customers)
     - Landing page with ad spend ($100-500)
     - Prototype demonstration
     - Pre-sales/letters of intent
   - What specific evidence would confirm or reject?

6. **Set decision criteria**
   - What result means "proceed"?
   - What result means "pivot"?
   - What result means "kill the idea"?

7. **Run tests, gather evidence**
   - Execute minimum tests
   - Document results objectively

8. **Synthesis**
   - Which critical assumptions were validated?
   - Which were invalidated?
   - What pivots are needed?
   - Is the idea still viable?

## Example

**Idea**: "Subscription box for AI prompt templates for marketing teams"

**Critical assumptions**:
1. Marketing teams regularly need prompt templates
2. They'll pay $99/month for curated prompts
3. Generic templates provide value vs. custom creation
4. Decision-maker is marketing manager/director
5. Monthly delivery model fits their workflow

**Prioritized risk**:
- **Assumption #2** (pricing/willingness to pay) = HIGHEST RISK
- If wrong: Revenue model fails
- Easy to test: Landing page + ad campaign

**Test design**:
- Create landing page describing offer
- Run $300 LinkedIn ad campaign to marketing managers
- Offer "early bird" pricing: $79/mo (save $20)
- Measure: Click-through rate, email signups, pre-orders
- Success criteria: 5% CTR, 30 email signups, 3+ pre-orders in 2 weeks

**Test results** (hypothetical):
- CTR: 2.3% (below target)
- Email signups: 47 (above target)
- Pre-orders: 0 (major red flag)
- Feedback: "Love the idea but seems expensive for templates"

**Insight**: Interest exists but price resistance is real. Invalidated assumption #2. Pivots to test:
- Lower price point ($29/mo)
- One-time template library purchase
- Freemium model with premium add-ons
- Enterprise licensing vs. individual subscriptions
