Implicit [[business model hypothesis|business hypotheses]] are unspoken assumptions that exist within the minds of entrepreneurs or team members, often based on intuition or untested beliefs about the [[business model]], customer needs, or market conditions. In contrast, explicit business hypotheses are clearly defined and documented, making them testable and measurable. The [[Business Model Canvas (BMC)]] plays a crucial role in this process by providing a structured framework to articulate these assumptions across various components of a business model, such as customer segments, value propositions, and revenue streams. By using the canvas, teams can transform implicit assumptions into explicit hypotheses, facilitating a more systematic approach to testing and validation. To convert business model canvas hypotheses into ones suitable for experimentation, starting with the phrase "We believe that..." and clearly articulating assumptions about a business idea is effective. For example, you might say, "We believe that millennial parents will subscribe to monthly educational science projects for their kids." This example interconnects hypotheses across different blocks of the Business Model Canvas. For instance, it assumes that millennial parents are a key customer segment interested in educational enrichment ([[customer segment|Customer Segments]]), that the science projects offer unique educational value ([[value proposition|Value Propositions]]). It also implies that a subscription model fosters customer loyalty ([[customer relationships|Customer Relationships]]) and is a viable revenue stream ([[revenue stream|Revenue Streams]]), while assuming the ability to consistently produce high-quality content ([[key activity|Key Activities]]). Validating these hypotheses simultaneously offers the advantage of a holistic understanding of the business model, enabling entrepreneurs to identify interdependencies and make informed adjustments across multiple areas, thereby reducing risk and increasing the likelihood of success. There is, however, a risk of falling into confirmation bias by only developing hypotheses that confirm existing beliefs. To avoid this, it's recommended to formulate opposing hypotheses, such as "We believe that millennial parents won’t subscribe to monthly educational science projects for their kids," and test both simultaneously. This approach is particularly useful when team members disagree on which hypothesis to pursue. ## Reference - Chapter 2 - Test of the [[Testing Business Ideas Book]] Next: [[Testing hypotheses]] Back to: [[Testing Business Model Hypotheses]]