Deciphering Assumptions from Facts and the Art of Prioritization

An important underpinning of any business's success is its ability to identify, prioritize and validate its assumptions. This applies to any business across any industry - it's literally the difference between understanding your business intimately vs having strong opinions in order to make decisions and investments in your growth.

Shifting from Planning to Prioritization

First it's important to understand a critical distinction: while countless resources focus on product planning, the real magic lies in product prioritization. It's not about creating a flawless roadmap but ensuring that what you bring to the market resonates with your audience.

What truly defines a great product person is not just about design prowess or efficient execution. A true product person excels in:

1. Identifying Assumptions: Recognizing underlying customer needs and motivations.
2. Developing Hypotheses: Crafting testable theories based on these assumptions.
3. Prioritizing Tests: Determining which theories to validate first, ensuring efficient resource allocation.

The Power of Collaboration

While one can venture into product prioritization individually, the process becomes exponentially more insightful with collaboration. Bringing together diverse perspectives can lead to more comprehensive understanding and innovative solutions.

The upcoming exercise promises to be enlightening. Aimed at helping business leaders dissect and prioritize their assumptions, it's designed to foster collaboration and bring clarity to your business's direction. The goal is to identify, challenge, and validate your business assumptions.

Lets take a Deep Dive into the 4-Step Technique from 'LEVERS' - this entire exercise will take between 60-90 minutes

1. Articulating Business Assumptions

Task: Grab your executive team and a stack of Post-it notes. On each, each person should jot down a single belief statement about what drives your business. Don’t overthink. Aim for at least 20 Post-its per person. A belief statement is something you believe to be true about your business, such as, "we believe our customers need our product to drive better margins" or "we believe that our company will have a product lead growth strategy". Give yourself and team 15-20 minutes.

Why this matters: This step, though seemingly basic, is revolutionary in its impact. It pushes you to confront and articulate potentially unvoiced assumptions that influence your business decisions.

2. Validating Assumptions with Data

Task: Together as a team, go through each Post-it. For every belief backed by solid, primary source data, mark it with a star.

Why this matters: In a world overwhelmed by opinions, what sets successful businesses apart is their reliance on data. This step filters out assumptions grounded in reality from those based on mere opinions or hearsay. A good test here is, would you bet me a $100 for each star, that I would agree that the data validates your assumption(s)?

3. Prioritizing Assumptions

Task: From the starred Post-its (validated assumptions), determine which ones are pivotal to your business success. These form the bedrock of your strategy. Any assumption you believe is critical to your business, put a circle around the star.

Why this matters: Not all assumptions, even if valid, carry the same weight. Recognizing the most consequential ones ensures efforts are laser-focused on areas that drive maximum impact.

4. Prioritizing the work to do now and next

Task: You now have 4 groups of stickies. Stars with Circles (critical and validated), Stars without circles (validated but not critical) Circles without stars (Critical and unvalidated) and no circle or star (not critical and not validated). Organize the stickies into a quadrant.

For your Critical and validated beliefs, these are the things you should be building, growing and investing in. For your critical but unvalidated beliefs, these are the things you need to spend time researching and testing to either validate or invalidate them. Everything else is marked 'not critical' and should be ignored for now. These things may (or may not) become critical at a later point but at this time you should only be spending your time on the critical items.

In Conclusion

In business, uncertainty is a given. Yet, through careful product prioritization, one can navigate this uncertain terrain with confidence. By understanding your customers, testing your assumptions, and focusing on the right strategies, you pave the way for sustainable growth and success. Good luck.