How Assumptions Kill Your Side Hustles

So you had an awesome idea. You plan everything out. You spent days, weeks, months, or longer behind the scenes building it out, making it perfect. You promote and launch and wait for the money to pour in. You sit in silence with the sound of crickets wondering what happened. You get frustrated and give up.

Many of us were taught to take an idea, make a plan, execute flawlessly on the plan, and success will come to us. While that looks good on paper the reality is that is often a direct path to failure. Even the best ideas, that solve real problems for people fall victim to this one common fatal flaw; Somewhere along the way, we made assumptions in a vacuum.

Assumptions

Making assumptions is not necessarily the bad part, any new idea, product or service starts out by making assumptions. We make assumptions about potential customers, the product, and the solution.

We assume we identified a problem to solve.
We assume that other people want this problem solved.
We assume that our solution is how they want it solved.

The bad part is we get overconfident, too early, that those assumptions are actually true. We get so caught up in starting to build, that we forget to test and validate them along the way. We pour time, dollars, and sweat equity into building a solution that misses the mark. The feedback that we needed came too late in the process to change the outcome.

Testing Assumptions

You can drastically increase your success rate, by learning how to identify and test assumptions early and often. When you pull potential customers into your process, you validate what you need to succeed faster. Be aware that your existing inner circle is biased towards positivity about your ideas, so you will want to find sources outside of this group.

Identifying Assumptions is not too difficult. A good starting point is identifying the main customer hypothesis and the problem hypothesis. Here is a randm exdample.

Customer Hypothesis: Is looking for faster ways to network on specific topics
Problem Hypothesis: Current ways of discovering network groups are difficult and take hours.

Now that we have this as a starting point, what assumptions have we made? This is brainstorming, so be open to capturing the good and the bad.

Current methods of connecting to network online a not efficient
People want to search network groups by topic
Enough people are doing this to support a business
People would join networking groups to participate
People would trust that other people in the group
People would share contact information in a group
People would share ideas openly in a group online
etc.

Once we have captured a good list of assumptions, we can do something very important with them. We can rank them by impact and risk. Not every assumption is bad, and not every assumption carries the same risk of failure. What we want to focus on is any uncovered that are risky to success and need to be explored and validated.

Validating or invalidating these high-risk, low-knowledge assumptions needs to move up in priority, as early as possible in the creation process. The idea is that we want to take early action to mitigate any risk.

For example, People would share ideas openly in a group online

If people are not willing to openly share ideas in a group, the service will not be viable. We need to find out how willing people are to share ideas and/or find ways to offer protection of

Building an MVP Version

An MVP, Minimum Viable Product, is a common design & build approach coupled with managing assumptions. What is the smaller version of the service or product that could be built, that allows us to validate the concept. The main idea is to strip away all the gold plating, leaving a simple but working version that can go end to end.

This has two major benefits

We accelerate getting a working product faster. We can add and expand features later.
We can validate, and get feedback, very early in the process. So we can adjust our thinking based on real products.

Zappos, the online footwear store is a great example of this approach. In the early days, Zappos did carry any inventory. They built a simple website with product photos and a simple order form.

The products on the website were taken at local stores. When a customer purchased a pair of sneakers online, a Zappos employee would drive to a store, buy the sneakers from the store, and ship them to the customer.

Now you may ask why would they do this? Their biggest assumption was that people wanted to buy shoes online. So before they bought any inventory, their goal was to prove that the business itself was viable. They operated in this “Man behind the curtain” approach for many months, learning what worked and what did not before investing capital in stocking inventory.

Pivot, Punt, pursue

The more comfortable we become about validating assumptions with feedback, the easier it becomes to steer our offering to what customers actually want and will spend money on. If we validate early and often then we decide to Pivot, Punt, or pursue our plan.

Pursue: We are on the right path, keep going!

Pivot: We are not on the right path, change course for a better outcome

Punt: We are not on the right path, the product is not viable, stop investing.

There is power in leaning into the uncertainty of launching any new endeavor. Incorporating feedback, and validating assumptions along the way may feel like extra work. But going heads down and missing the target completely is catastrophic.