How to identify when a fit has been achieved, and how to exit the explore stage and start exploiting a product with its identified market.
We live in a world of data overload, where any argument can find supporting data if we are not careful to validate our assumptions. Finding information to support a theory is never a problem, but testing the theory and then taking the correct action is still hard.
As discussed in not available, the second largest risk to any new product is building the wrong thing. Therefore, it is imperative that we don’t overinvest in unproven opportunities by doing the wrong thing the right way. We must begin with confidence that we are actually doing the right thing. How do we test if our intuition is correct, especially when operating in conditions of extreme uncertainty?
Eric Ries introduced the term innovation accounting to refer to the rigorous process of defining, experimenting, measuring, and communicating the true progress of innovation for new products, business models, or initiatives. To understand whether our product is valuable and hold ourselves to account, we focus on obtaining admissible evidence and plotting a reasonable trajectory while exploring new domains.
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