The Value Hypothesis and the Growth Hypothesis are the Two Most Important Assumptions for a Startup

Every startup makes two fundamental assumptions about its business. These are the value hypothesis and the growth hypothesis.

• The Value Hypothesis: This hypothesis tests whether a product or service really delivers value to customers once they are using it. It asks the question: "Do customers find this product or service valuable?" The best way to test the value hypothesis is to build a Minimum Viable Product and see if customers will use it.

• The Growth Hypothesis: This hypothesis tests how new customers will discover a product or service. It asks the question: "How will we acquire new customers?" There are several different engines of growth that a startup can use, such as the sticky engine, the viral engine, and the paid engine. The growth hypothesis should be tested by running experiments to see which engine of growth is most effective.

These two hypotheses are the riskiest assumptions that a startup makes. Therefore, it is critical to test them as early as possible. The Lean Startup methodology provides a framework for systematically testing these hypotheses through a series of experiments.