Why You Should Care About The Power Of Experimenting

Why You Should Care About The Power Of Experimenting

Have you ever found yourself saying “If I had more time/money I’d…”

…or “I’d love to try…”.

Well, with the power of experimenting, you probably can try more things than you imagine.

The recipe for this power is a willingness to test things out (i.e. to experiment), a drive to learn more and by adding a pinch of curiosity you’ll get some added flavor.

That extra flavor is the thing that’s going to help you start developing experimenting as a habit and that’s when things start to get really awesome.

If you’re in business and you’re not experimenting, you have no excuse – you really should be.

Successful entrepreneurs experiment. As do successful businesses. They create hypothesis after hypothesis and they test them. Again and again. They experiment so they can find out for real – from real results – whether something works or not (aka they don’t make too many wild guesses).

Successful entrepreneurs experiment – so they can find out for real if something works or not.

You can’t get these results – this data – from a focus group.

You have to dip your toes in the water.

The Need For Real Data And Real Experience

Let’s say you ask ten people the following question: “If I wrote a book designed to help you with XYZ and priced it at $$$, would you be interested in buying it?” (obviously you’d need to replace the dollars and the XYZ with a price in your local currency and a topic that matters to you and your target audience).

The chances are, if your book subject is of any interest at all to your test subjects and the price is reasonable, then you’re going to get a pretty positive response.

Ask the same ten people to pay for the book at the same price and you will get a very different response.

i.e. Hypothetical responses, for all kinds of reasons are often a lot more generous than real responses.

… reasons such as the fact that if they have nothing to lose (such as their money), people are more likely to tell you what you want to hear, or simply that people often don;t really know what they want until they really have to think about it (like when they have to put their hands in their pockets).

So if you base your business on hypothetical data – even if it’s really well prepared, in-depth market research – then be prepared for some difficulties.

The same goes for anything – it doesn’t have to concern a sale. Take a diet for example – reading a book about it is never going to tell you as much about the diet as trying it for real (which is why when asked to review Alison’s book on Paleo, I actually tried the diet before writing the review).

Getting Real Data

Easier than ever.

It’s now easier than ever to get real data for almost anything you want.

It is more likely than ever that the data you are looking for exists already and you just have to find it via a few clever internet searches or, in my opinion, the best way to do it is to set it up as an experiment – designed to give you the answers you want – and get your own data.

“There are some decisions that are too important to make guesses on – and, in those cases, you either need to find data to help you or to generate your own data through experiments.” ~ Prof Levitt, author of ‘Freakonomics’

What Would A New Career Be Like?

So far this year I’ve had 3 different clients tell me they want to quit their jobs and completely change their career for something else. In 2 cases these were for more creative enterprises (one wanted to be a music teacher, the other a writer) and the third case something much more entrepreneurial (a kind of eco-business).

In all 3 cases we managed to set up very simple experiments for the clients to find out what that kind of change would be like without quitting their day jobs – 2 by doing the extra activity on the side and one via a sabbatical which my client agreed with her employer.

All 3 had some unexpected feedback from their experience which they never would have gotten without actually trying the activity in question. For real. This feedback (good or bad) would have been very expensive to get if they had quite their jobs to find out – especially considering they could get – and did get – the same feedback for free.

The critical point here: Whether or not they (or you) then go ahead and make the change, the thing to do is get all the information you can first by setting up the experiment to give you the answers before you take the next step. Before you quit your job. Before you change your life. Before you put all of your production budget into the innovative new product. Before you risk your entire marketing budget in a new market….

In my view, in all 3 cases there was a huge risk that quitting the job to try the new venture could have been a poor decision – particularly as in all 3 cases it was fairly easy to test the new idea first to see – if not the full story – at least a really good impression (with real data) of what that change would be like.

Again, you could not do this just by asking people or with focus groups.

You have to dip your toe in.

You have to experiment and find out for yourself with real data.

Some of Our Experiments

I just can’t list them all because I am literally experimenting all the time.

I can’t stop myself – I’m like an experiment addict (there are worse things I could be).

Anyways, here are a few you may already be familiar with if you are a regular reader of this site:

I could go on – particularly when it comes to investments and different ways of generating income I get involved in lots of projects, some on my own, some collaborative, all of which are experiments, designed in a safe environment to give me some answers before I decide whether it’s worth investing further in that venture.

In short, if it wasn’t for the power of experimenting, my life (and that of my family) would be nothing like what it is now.

Note: Even with an established product, process or behavior, we can experiment by changing small parts of it. For example doing everything the same to create a certain product but then selling it in a different way (or vice versa).

Some More Well Known Examples

Radiohead’s ‘In Rainbows‘ album was launched in October 2007 on the Internet. The band invited fans to download the album freely and asked, in return that they pay any amount of money that they would like to pay. Later the band disclosed that the download of the ‘In Rainbows’ album generated more profit than the accumulated downloads from all previous albums.

The 40 hour work week which is standard in lots of countries came about after car manufacturer Ford ran lots of experiments over 12 years to test what the optimal working hours would be to drive productivity. What was found from these years of experimenting was that less than 40 hours per week wasn’t enough. More than 60 hours per week did in fact give a small productivity boost in the short term but after a few weeks this turned into a negative trend. Based upon this data, Ford and his fellow industrialists lobbied Congress to pass 40 hour a week labor laws.

Apple is a company famous for experimenting in the realm of product innovation. For example, it was reported in February 2013 in the New York Times that Apple are experimenting with devices similar to watches that would operate on the same platform as the iPhone and would be made with curved glass.

Modern online companies such as Apple, Google and Amazon use data in a huge way to make business decisions via constant experiments and use of customer feedback. Rather than the old traditional ‘big bang’ approach that factories such as those used by Ford would employ, these modern companies will generally release beta products, then improve the same product via successive versions (e.g. the iPhone 5 is a much different product to the original iPhone and has vastly superior functions and technology). i.e. these companies are constantly experimenting and using data from those experiments (primarily related to customer experience) to improve their products.

The Purpose Of An Experiment

The purpose of an experiment is to give you answers that you can do something with – results if you like. These results should help you make a decision as to what to do next or at least just give you some information you never had before that is of particular interest to you.

  • e.g. Can a Pay What You Like model be as successful as a traditional fixed price model for an album release? Answer (in Radiohead’s ‘In Rainbows’ case): Yes – in fact, more so.
  • What are the optimum working hours per week to achieve maximum productivity? Answer (according to Ford): 40 hours / week.

The Elements Of An Experiment

Creating an experiment is really easy and the elements and questions you should be asking are the same whether it’s a big experiment or a teeny weeny one. Here are the main elements:

  • Hypothesis – probably the reason why you’re conducting the experiment in the first place, it’s an idea, or theory which you are testing (e.g. Instead of continuing in my current stressful job, I can make a living and be happier doing X). Note: this could also be a null hypothesis if you don’t believe something but want to test it anyway, hoping to prove yourself wrong (e.g. Even though my current job is stressful, I can’t afford to quit it because I can’t make enough money doing X).
  • Questions & Answers – more specific questions you’d like the experiment to give you answers to. In the case of the two diets I tried for example, one of these questions was whether the diet would be a sustainable option long term or not, in the case of my car, a specific question I wanted to answer was concerning the maintenance of the car – i.e. as an old car, would it have ‘problems’ and be (the surprising answer to this question, incidentally, was that it has less problems than my previous car had).
  • Cost/Budget – Is there a cost associated with this experiment? How much are you prepared to invest in order to get the answers you are looking for?
  • Duration – How long will the experiment run for?
  • Success/Completion Criteria – How will you know when the experiment is finished? Is it based on a set time period (e.g. the 30 Day Paleo challenge), a given amount of money (e.g. our move to the countryside was based on me putting aside an amount of money loosely based around how much I though we needed to live for a year – but the idea was that we would stop the experiment if the money ran out rather than after a defined period of time (incidentally, the money never ran out and in fact has moved in the opposite direction via various investments, projects & our new way of living)) or on particular questions having been answered?
  • Safeguards/Exit Strategy – Do you have any safeguards (e.g. contingency plans or money in place) and/or an exit strategy in case things don’t go anywhere near the way you’d hoped (depending upon the type and scale of the experiment this may or may not be necessary)?
  • Method – How will you go about conducting your experiment? What will you do?
  • Results – What results did you get? How are you recording these
  • Conclusion & Next Steps – Based on your analysis of the results, what have you found out, what does that mean to you or your business and what are you going to do about it? Do you have all of the information you need or is another experiment needed based on this one?

Your Turn – Create Your Next Experiment

Ask yourself these questions:

  • What is this experiment designed to prove (or disprove)?
  • What specific questions would I like answered?
  • How much money/time do I need to invest in this experiment?
  • What safeguards do you need to put in place (if any)?
  • Do you have/need an exit strategy?
  • How will I conduct the experiment and record the results?
  • How will I know when the experiment is complete?

you can use these questions (which should result in producing the elements described above) for any size experiment.

Final Thought – Experimenting is Empowerment

By experimenting to get the data and the answers you’re looking for, you are empowering yourself to make better decisions and move forward in your life or your business.

By experimenting you are empowering yourself to make better decisions in your life or your business.

The answers are out there to all of your questions these days, you just need to go out and grab them.

Experimenting is not only extremely useful, it is also lots of fun – give it a go and let me know how you get on.

Don’t know how to let me know? Jump on our list and drop me an email.

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