An entepreneurship expert explains the benefits of treating new business ideas as experiments, with hypotheses that need to be tested.
John Mullins has written a thought-provoking new essay about entrepreneurship. While Mullins is writing specifically about launching a start-up, some of his ideas seem applicable to innovation more broadly. In particular, he notes the importance of experimentation to achieving success — and of testing ideas rather than becoming attached to them from the start. Writes Mullins in an essay on the London Business School website:
“Often with entrepreneurs it’s not the initial plan that reaps success, but ideas that come to fruition much later in the process. In fact, most investors will tell you that the successful companies in which they put their money almost always make their money not on Plan A, the initial idea for which a business plan might have been written, but on Plan B or maybe Plan C, D or Z.”
As a result, Mullins suggest that entrepeneurs, rather than completely committing early on to a particular business plan, figure out instead what questions about their initial plan need answering and testing. “Rather than blindly trying to overcome all the obstacles [to your initial plan], we think it’s wiser to think about the entrepreneurial path as one of testing hypotheses,” he writes.
That’s good advice not just for would-be entrepreneurs, but for all innovators.
For more on Mullins’ ideas about unknowns and the innovation process, see “Discovering ‘Unk-Unks,’” his article in the Summer 2007 issue of MIT Sloan Management Review.