Business Hypothesis

A business hypothesis is a testable statement that outlines an assumption about a product, service, or strategy and its impact on achieving business goals. It is a key concept in both Design Thinking and Growth Hacking, driving experimentation and decision-making by grounding efforts in evidence-based learning.

In Design Thinking:

• Guiding Problem Definition: A business hypothesis is often formulated during the Define stage to clarify assumptions about user needs, pain points, or the viability of a proposed solution. For example, a hypothesis might state that “improving the checkout process will increase conversion rates by 15%.”
• Focus for Prototyping and Testing: Hypotheses help teams focus their prototyping efforts, ensuring that each iteration is aimed at validating or disproving assumptions. This aligns with Design Thinking’s iterative approach.
• User-Centric Validation: Hypotheses are centred on user behaviour and feedback, ensuring that design efforts are not only creative but also effective in solving real-world problems.

In Growth Hacking:

• Driving Experiments: A business hypothesis forms the foundation of growth experiments, outlining what is being tested and what results are expected. For example, “Offering a 10% discount to first-time users will increase sign-ups by 20%.”
• Prioritising Efforts: Growth hackers use hypotheses to prioritise experiments based on potential impact, confidence, and effort, ensuring resources are allocated to ideas with the highest likelihood of success.
• Measurable Outcomes: A well-crafted hypothesis includes specific, measurable criteria, enabling growth teams to analyse results and iterate quickly based on data.

Examples of Application:

• In Design Thinking: Testing a hypothesis that simplifying an app’s navigation will improve user satisfaction and reduce task completion time.
• In Growth Hacking: Experimenting with a hypothesis that changing the headline on a landing page will boost click-through rates by 10%.

A business hypothesis bridges creativity and analytical thinking in both Design Thinking and Growth Hacking. It ensures that efforts are aligned with strategic objectives, encourages a culture of learning through testing, and provides a framework for making informed decisions based on data and user insights. By focusing on what can be validated, teams reduce risks and accelerate progress towards meaningful outcomes.