Occam’s Razor and Lean Startup Methodology: Keep it Simple
March 4, 2023
4 min read
One of the first steps out of the dark ages was the articulation of a heuristic technique for selecting between competing theories. It has served humanity well for the past seven hundred plus years and entrepreneurs should keep it in mind and apply it in developing startups.
The Lean Startup Methodology is a powerful way to search for a solid business model by eliminating wrong guesses about what customers are willing to pay for. It uses the scientific method of testing hypothesis and measuring results. You take your guesses about what customers want and how you are going to provide it and test those assumptions against customer feedback. You keep refining your assumptions until you get it right.
It’s a proven process that has taken us from the dark ages to our current level of understanding of how to predict and harness the natural world. It gets us out of our heads and aligned with the outside world.
In Lean Startup we use the Business Model Canvas to organize our assumptions about our business model. A heuristic technique from the twelfth century is helpful in analyzing and selecting your assumptions and populating the business model canvas.
It’s called Occam’s Razor and it takes the “wild ass” out of “wild ass guesses”.
William of Ockham (1287–1347) was an English friar and a philosopher who thought up this idea. Back in those days English spellings weren’t so consistent and he is known as Occam, Ockham, or Ocham; take your pick.
Occam’s razor is a problem-solving principle that states: when presented with competing hypothetical solutions to a problem, one should select the answer that makes the fewest assumptions. Pick the simplest one.
In Latin it is known as lex parsimoniae the law of parsimony.
In science, Occam’s razor is used as a heuristic guide, meaning it’s a quick rule of thumb, in developing theoretical models. Its not a rigorous arbiter between candidate models. Its on the fast side of fast and slow thinking.
Keep it simple. Simpler theories are preferable to more complex ones because they are more testable. That is a key criteria in lean startup methodology: testability.
Occam’s Razor essentially states “the simpler the better.” It is easy to get tied up in all the complications that can arise out of a seeming large bunch of competing interests and concerns. We need a heuristic framework to simplify all the moving part so we can make smart decisions. How can one keep it all in one’s head and make decisions taking it all into account on the fly in real time. That is where William Occam’s advice always helps to clear the air — the fewer assumptions that are made, the better.
Here is a caveat regarding not taking simplicity any further than is warranted.
“Everything should be made as simple as possible, but not simpler.”
— Albert Einstein
In using the scientific method, the preference for simplicity is based on the falsifiability criterion. This is the bar. For each explanation of a phenomenon, there are an extremely large number of other possible and more complex alternative explanations.
In order to be considered scientific, a conjecture has to be able to be proven false. This means an observation or experiment is conceivable that could refute it.
The statement “All swans are white” can be proven false, since evidence of black swans, or any other color swan, proves it to be false and such evidence can be practically provided.
Check out Russell’s Teapot. It’s a cool thought experiment that clarifies the concept of the burden of proof and disproof.
All of your hypotheses in lean startup have to meet this criterion. They have to be easily testable via customer observations.
One can always prop up failing explanations with ad hoc hypotheses to prevent them from being falsified. This might help you hold on to your cherished assumptions, but won’t move you closer to a successful business model or the truth.
When you find yourself adding too much scaffolding to support your ideas, take a minute and think about these things. Also remember, just because its simple doesn’t mean its true. It may be beautiful and elegant and also false.
While we’re on the subject of razors, here’s another one. Hanlon’s razor is an aphorism expressed in various ways, including:
Never attribute to malice that which is adequately explained by stupidity.
It helps us keep our cool by providing a disinterested approach to eliminating unlikely explanations for human behavior and its consequences.
We tend to immediately jump to the conclusion that we have been maliciously slighted in interaction where in many cases the reality is that someone just made a mistake or was too busy to respond in the way we think appropriate.
Applying Hanlon’s razor can save us from responding aggressively to a perceived slight and having to deal with the consequences of someone feeling ambushed by our attack.
It can discipline us toward more humane and efficient behavior.
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