Assumption vs. Hypothesis – to the Death!

By Tristan Kromer

Something has been irritating us: The startup community uses the words assumption and hypothesis interchangeably.

We also rarely use hypothesis correctly, often referring to laughably vague statements as hypotheses such as this gem we overheard:

Our hypothesis is that a $50k seed round will be enough to show traction.

Double face palm - Telling the difference between and hypothesis and an assumption should be this hard

We do the same damn thing, hence the irritation. So we should stop doing that, because it has an OVERSIZED effect on our next decision for our startup.

tl;dr:

Assumptions should be challenged and clarified with research. Falsifiable hypotheses should be tested with an experiment. Click To Tweet

Bonus: We’re writing a more complete version of how to design great experiments as an open source “Real Book”, you can get on the download list here:

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The Dictionary

Let's ask the dictionary - What is an assumption anyway?While they are listed as synonyms by many dictionaries, they are really not the same word. Here’s a definition for Assumption from Merriam-Webster (because we’re too damn cheap to pay for the OED):

a fact or statement (as a proposition, axiom, postulate, or notion) taken for granted – Merriam-Webster

Here’s hypothesis:

an assumption or concession made for the sake of argument – Merriam-Webster

Oops…that’s almost identical and even used the word assumption, but not quite. It’s an assumption…for a specific purpose. Here’s a clearer definition.

a tentative assumption made in order to draw out and test its logical or empirical consequences – Merriam-Webster

Now that’s an interesting difference, and it’s important because depending on whether we have an assumption or a hypothesis, we should do two different things.

If we have an assumption, we accept the risk that the assumption is false and move on.

If we have a hypothesis, we attempt to falsify it.

Research Assumptions

If we look up a few more of assumption‘s numerous definitions we’ll also get a sprinkling of the religious roots of the word. That’s appropriate because the heart of the word is that we take it on faith.

For our startup, an assumption is usually something that we are not going to investigate. It’s something we will take on faith. We have many assumptions and they’re not all bad.

We might look at an analog to a startup idea (a probiotic search engine) and see that the companies that sell probiotics have a lot of internet traffic and it’s growing month over month. We could then assume there is sufficient market size to justify our interest.

That assumption may be disastrously wrong. Perhaps those companies are buying traffic with no profit to show for it, but we are free to make that assumption and take the risk.

If we have an assumption, we can either accept the risk or convert it into a testable hypothesis. Click To Tweet

Hint: By “testable” we mean falsifiable.

Convert Assumptions into Hypotheses

Assumption
Hypothesis
The market is large enough to support this business. There are 20,000 search queries per month using the term ‘probiotic’ and this number will grow by 20% next month.
Our product solves the problem. If a visitor shopping for probiotics comes to our landing page, they will enter a search query.
We’ll be able to raise an angel round really easily. If we send a cold email to 10 angel investors on Angel.co we’ll be able to get 3 meetings within two weeks.

As you can see, all the assumptions are vague, optimistic, and untestable. The vaguer they are, the harder they are to disprove.

What makes a good hypothesis? The hypotheses above are relatively specific and we can easily see how to design an experiment to get the data that could disprove that hypothesis.

Hidden Assumptions

The most dangerous kind of assumption is the one we don’t know we have. In Rumsfeldian, that’s an “Unknown unknown.”

Entrepreneurial Optimism vs. Reality - What's the difference between assumptions and hypotheses?

To reveal hidden assumptions, there are a few tried and true generative research methods:

  • Use a framework such as the Business Model Canvas to list your assumptions
  • Have a peer challenge you with questions about your business model [hint: write them down]
  • Watch your customers try to solve their own problems
  • Talk to your customers!
When just starting, our biggest challenge is not to build an MVP, but to identify our own assumptions. Click To Tweet

Ready to Test? What is a good hypothesis?

Before we get excited and start building anything and before we start talking about our hypothesis, let’s make sure it’s a real, falsifiable hypothesis and not just a vague assumption.

Look at the hypothesis and go through this checklist:

Symptom
Fix
Are there vague words like “some people” or “customer”? Be specific. Create a well defined customer persona.
Is it falsifiable? What evidence would convince a reasonable person that the hypothesis is wrong? Create a measurable hypothesis. Eliminate hedging words like “maybe,” “better,” “some” and convert to and IF ________ THEN ________ statement.
Is it actually risky? If it’s not truly risky, it’s not relevant and we don’t need to test it right now. (It may get more risky later and resurface.)
Has a second set of eyes looked at it? We all have blind spots. Check your work with another entrepreneur and ask them to tighten up the hypothesis.

What have we missed on this checklist? Got a tip? Tweet me.

Bonus: We’re writing a more complete version of how to design great experiments as an open source “Real Book”, you can get on the download list here:

Download