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Newsletter sent on Thursday, Sep 29, 2022

Every day you make all sorts of guesses and assumptions without realising it. They are like small pieces of duct tape holding your plan together. To say “I assume” is kind of the same as saying, “I know that I miss some information here, and I know there is some risk, but I want to move ahead.”

Everybody routinely makes implicit assumptions on autopilot to keep things simple. Some of them backfire, but oftentimes nothing bad happens. But some other assumptions carry significant risk due to high probability, major impact, or both. Yet they go unrecognised and unquestioned.

Imagine planning a 2-weeks hiking trip to a country where you’ve been only once. You assume that the weather in July is gonna be okay. Two details here signal a high risk due to significant impact: “2 weeks” and “hiking”. Another one – due to increased probability: “new country”; if this country happens to be Thailand, consider yourself in trouble.

In the corporate business setting, on top of that, unstated risky assumptions are notoriously capable of derailing any initiative, too. It can, for example, be tempting to write a project proposal with a couple of straw man risks and mitigation paths to look compelling in the eyes of the sponsor. This may be a legit way to get funded in your company; I’m not judging it. But taking that proposal and turning it into a roadmap emphasising deliverables before you tackle assumptions seriously is a sure way to miss the goals by a wide margin.

Failed assumptions in a large company can be and often are partially recovered by burning more cash on massive re-work, but for most startups missing a critical assumption is a kiss of death. The three most frequent reasons for startup failures are lack of market need, flawed business model and insufficient traction. Each of them can be explicitly stated as an assumption and validated early.

So, what to do?

There are different ways to validate assumptions, and I’ll write more about this, but the first step is surfacing them. Here’s what has been working well for me and what I advise to others:

  1. Each assumption is the antithesis of knowledge, so gather an inter-disciplinary crowd to maximise the amount of knowledge in the room;
  2. Clearly, without jargon, list the business objectives of the project. Welcome questions and let participants help each other understand them.
  3. It’s okay to ask “why”, but avoid going further than one step up the chain. This is not the 5-whys analysis.
  4. Present the current plan of action that answers the “how” question. Once again, the discussion should remain on the same abstraction level, one or two steps from the stated objectives. This is not a planning session.
  5. Inspect the plan and analyse the gaps between the status quo and the first step, each step, the last step, and the objectives. If it’s impossible to cover a gap with the knowledge in the room – you’ve found an assumption.
  6. State and write down the assumptions, but don’t try to analyse them until you’re done. It’s more valuable to have shallow assumptions covering all the gaps than only the first two discussed through and through. This is where your facilitation skills will come in handy.
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Hi! I'm Mike Kotsur, a software consultant deeply passionate about technology and innovation. During the last decade I've helped many startups, innovation labs and product incubators to validate and develop business ideas from scratch into well-founded software systems valued by users and customers.

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