For an entrepreneur, experimenting within your business is a powerful opportunity to drive growth. To do this in a conscious and controlled way, there is a framework called the Experiment Bucket. In this post we talk about the importance of experimenting safely, following a methodology that helps a startup or company focus its resources in the best possible way.
The Experiment Bucket plays an important role for businesses that have decided to experiment, because it allows you to organize all experiments and keep track of them. This way we avoid getting lost or overwhelmed in the experimentation process.
If you don't have time right now to read this post, don't miss my video on my YouTube channel, where I share the Experiment Bucket I use in my own business and explain the process quickly.
Don't forget to subscribe! :)
What is business experimentation?
Business experimentation is an important part of a company's growth and development. It involves testing and evaluating different strategies, tactics, and methods to determine what works best for the business. Business experimentation can be used to develop a new product or service, improve existing ones, drive revenue growth, or test a new growth strategy.
Companies use experimentation to better understand their customers' behavior, optimize processes and operations, and gain a competitive edge in the market. Experimentation also helps businesses identify growth hacking opportunities — using data-driven techniques to uncover untapped markets, acquire new customers, increase engagement, and optimize marketing campaigns. Experimentation is an essential tool for any business seeking to accelerate its growth trajectory and maximize return on investment (ROI).
Why experiment?
Experimentation is a vital part of any business because it allows you to explore and understand the effects of specific changes. Experimentation brings great benefits to a company:
- It can be used to test new ideas, products, services, and processes before fully implementing them.
- It allows managers and entrepreneurs to make informed decisions about their business.
- It enables you to stay ahead and continuously innovate to remain successful.
- It creates a learning and discovery environment for both employees and managers, which improves decision-making capacity.
- It helps organizations uncover hidden opportunities that may not have been initially identified or understood.
A company must cultivate a culture of experimentation, so that employees can learn from the results of trying various approaches in order to find the most effective solutions.
Clear objectives and KPIs
Clear objectives give teams direction and purpose, while KPIs (Key Performance Indicators) help measure progress toward those objectives. That's why it's important to set a clear direction through KPIs and goals, so that teams involved in the processes have a consistent focus. Let's look at both in detail.
How to set clear objectives: the S.M.A.R.T. method
Allowing experimentation within clear objectives ensures that the experimentation process is beneficial without sacrificing the company's direction or purpose. An objective is clear when it is SMART, meaning:
- Specific
- Measurable
- Achievable
- Relevant
- Timely
This acronym refers to the conditions that a company's objectives should meet to be considered clear and effective. Therefore, in our experimentation cycle it's advisable to only consider objectives that meet these criteria.
Example of a NON-S.M.A.R.T. objective: "We'll publish some videos with a few influencers to get more popularity."
Example of a S.M.A.R.T. objective: "Over 10 weeks, we'll publish one video per week with a popular influencer in our sector, then add a personalized link to each video to measure how many unique visits each influencer drives."
What are KPIs (Key Performance Indicators)
Key Performance Indicators (KPIs) are metrics used to measure the success of an experiment. Not all KPIs carry the same importance for a business, so it's essential to define which ones matter most and organize experiments accordingly.
At the same time, for each experiment it's essential to define one primary KPI that determines the success or failure of that experiment. This primary KPI is usually defined as the OMTM (One Metric that Matters) or the NSM (North Star Metric).
The Experiment Bucket
What is the experiment bucket
The experiment bucket is a register where you store all of your company's experiments — completed, in progress, and queued. It's very similar to the concept of a Backlog in the agile world, except that instead of a list of tasks, you have a list of experiments. The experiment bucket lets you prioritize and optimize resources and easily access a full list of your company's experiments with all relevant details.
How the experiment bucket works
Since the experiment bucket is a register of experiments, there are several ways to organize it. One approach I like a lot is using a Kanban style with columns based on each experiment's status. For example:
- First column: future experiments.
- Second column: experiments in progress.
- Third column: completed and failed experiments.
- Fourth column: completed and successful experiments.
- Bonus column: experiments that were not approved and never started.
How to build a correct experiment bucket
Let's now look at how to build a correct experiment bucket. In general, you must RESPECT these rules:
- Keep it ordered — this is fundamental. Every time you open it, you should know which experiments were most recent and which are coming next.
- Don't leave it empty. You should always have experiments in progress and queued. If it starts to empty out, organize a brainstorming session with your team for new ideas.
- Keep it clean. If there are secondary experiments you'll probably never run, remove them to give more space to more important ones in your list.
Free online tools for building an experiment bucket
I recommend 3 tools for managing your company's experiment bucket:
- Google Sheets. Simple, free, online, accessible from any device, and easy to share with teammates.
- Trello. A well-known project management tool that in its free version has enough features to manage an experiment bucket.
- Pipefy. A tool specialized in process management that, like Trello, has a free tier where you can start running tests.
