A scientific approach to decision-making can help entrepreneurs to abandon unpromising ideas and reduce the number of times they pivot to new business models.
Training on how to use a scientific approach to validate and develop business ideas is added to a three-month pre-acceleration programme for early stage entrepreneurs.
A three-month pre-acceleration programme focused on market validation. It consists of eight three-hour training sessions on tools and strategies aimed at testing the desirability of a product or service concept.
- To help founders to make better decisions about which business ideas to pursue
- To improve how founders develop their business ideas
This intervention was tested in the early phase of entrepreneurial decision-making during which entrepreneurs explore and develop ideas about their business models before they commit resources to their venture.
Entrepreneurs in nascent startups with a business idea they want to develop further. They’re yet to undertake significant steps to bring their product or service to the market.
On average, firms have two to three members participating in the training. Less than a third of the participants are women, the average age is 30 years old and team members dedicate an average of 11 hours a week to the business. Overall, they have low levels of industry, entrepreneurial and managerial experience.
During the sessions, half of the startups are trained on a scientific approach to decision-making: how to elaborate theories about their businesses, derive hypotheses from these theories and test them rigorously. Meanwhile, the other half are left to follow their own intuition on how to best apply the tools presented during the general training.
- Being taught how to implement a scientific approach to decision-making increased the probability that nascent entrepreneurs ceased all activities related to their business idea (‘exited’) by about 20 percentage points.
- Entrepreneurs trained in the scientific approach to decision-making were slightly less likely to pivot more than twice.
- During the first year and a half following the start of the programme, firms receiving the scientific approach training experienced slightly higher revenue flows, but by the end of the observation period, there was no significant difference in revenue terms between firms that received the scientific approach component and those that didn’t.
- A scientific approach to decision-making can help entrepreneurs to abandon unpromising ideas and reduce the number of times they pivot to new business models. This saves the time and resources that entrepreneurs devote to business exploration activities.