Making the strategic goals as hypotheses in software startups: The role of hypothesis driven development and Agile methodologies

A problem faced by many managers today in software-dominated startups is reconciling a strategic vision, which delivers value to customers quickly, and adapt to changing circumstances. Understanding which customers are critical and their needs, are significant for any business. But getting to know these particulars can be a real challenge. Unfortunately, some managers still find engaging with the following questions and struggle to make sense out it: How to prioritize which customer segments to target? Which customer opinions to listen? What features might please today's customers and what might displease them? This ‘uncertainty is considered as failure’ and should be scaled down in order to be consistent in delivering the products that customers love. Startups should look at a strategic goal as a hypothesis to be tested instead of something to be planned and executed. Startups need to learn by sophisticated experimentation, adapt and continue with the next experiment faster than their competition. The startups should apply certain product development methodologies that re-conceive its efforts as experiments that test its strategy to see which parts are brilliant and which are crazy. A true experiment follows with a clear hypothesis that makes prophecies about what is supposed to happen. The goal of an experiment is to discover how to build a business that sustains around that vision. This paper provides information about Agile and Lean methodologies, and how these methodologies can be tailor-made and applied to formalize the strategies as the hypothesis concepts, which contribute to the endeavors of successful startups.