How to Implement Hypothesis-Driven Development
Remember back to the time when we were in high school science class. Our teachers had a framework for helping us learn – an experimental approach based on the best available evidence at hand. We were asked to make observations about the world around us, then attempt to form an explanation or hypothesis to explain what we had observed. We then tested this hypothesis by predicting an outcome based on our theory that would be achieved in a controlled experiment – if the outcome was achieved, we had proven our theory to be correct.
We could then apply this learning to inform and test other hypotheses by constructing more sophisticated experiments, and tuning, evolving or abandoning any hypothesis as we made further observations from the results we achieved.
Experimentation is the foundation of the scientific method, which is a systematic means of exploring the world around us. Although some experiments take place in laboratories, it is possible to perform an experiment anywhere, at any time, even in software development.
Practicing Hypothesis-Driven Development is thinking about the development of new ideas, products, and services – even organizational change – as a series of experiments to determine whether an expected outcome will be achieved. The process is iterated upon until a desirable outcome is obtained or the idea is determined to be not viable.
We need to change our mindset to view our proposed solution to a problem statement as a hypothesis, especially in new product or service development – the market we are targeting, how a business model will work, how code will execute and even how the customer will use it.
We do not do projects anymore, only experiments. Customer discovery and Lean Startup strategies are designed to test assumptions about customers. Quality Assurance is testing system behavior against defined specifications. The experimental principle also applies in Test-Driven Development – we write the test first, then use the test to validate that our code is correct, and succeed if the code passes the test. Ultimately, product or service development is a process to test a hypothesis about system behavior in the environment or market it is developed for.
The key outcome of an experimental approach is measurable evidence and learning. Learning is the information we have gained from conducting the experiment. Did what we expect to occur actually happen? If not, what did and how does that inform what we should do next?
In order to learn we need to use the scientific method for investigating phenomena, acquiring new knowledge, and correcting and integrating previous knowledge back into our thinking.
As the software development industry continues to mature, we now have an opportunity to leverage improved capabilities such as Continuous Design and Delivery to maximize our potential to learn quickly what works and what does not. By taking an experimental approach to information discovery, we can more rapidly test our solutions against the problems we have identified in the products or services we are attempting to build. With the goal to optimize our effectiveness of solving the right problems, over simply becoming a feature factory by continually building solutions.
The steps of the scientific method are to:
Formulate a hypothesis
Design an experiment to test the hypothesis
State the indicators to evaluate if the experiment has succeeded
Conduct the experiment
Evaluate the results of the experiment
Accept or reject the hypothesis
If necessary, make and test a new hypothesis
Using an experimentation approach to software development
We need to challenge the concept of having fixed requirements for a product or service. Requirements are valuable when teams execute a well known or understood phase of an initiative and can leverage well-understood practices to achieve the outcome. However, when you are in an exploratory, complex and uncertain phase you need hypotheses.
Handing teams a set of business requirements reinforces an order-taking approach and mindset that is flawed. Business does the thinking and ‘knows’ what is right. The purpose of the development team is to implement what they are told. But when operating in an area of uncertainty and complexity, all the members of the development team should be encouraged to think and share insights on the problem and potential solutions. A team simply taking orders from a business owner is not utilizing the full potential, experience and competency that a cross-functional multi-disciplined team offers.
The traditional user story framework is focused on capturing requirements for what we want to build and for whom, to enable the user to receive a specific benefit from the system.
As A…. <role>
I Want… <goal/desire>
So That… <receive benefit>
Behaviour Driven Development (BDD) and Feature Injection aims to improve the original framework by supporting communication and collaboration between developers, tester and non-technical participants in a software project.
In Order To… <receive benefit>
As A… <role>
I Want… <goal/desire>
When viewing work as an experiment, the traditional story framework is insufficient. As in our high school science experiment, we need to define the steps we will take to achieve the desired outcome. We then need to state the specific indicators (or signals) we expect to observe that provide evidence that our hypothesis is valid. These need to be stated before conducting the test to reduce the bias of interpretation of results.
If we observe signals that indicate our hypothesis is correct, we can be more confident that we are on the right path and can alter the user story framework to reflect this.
Therefore, a user story structure to support Hypothesis-Driven Development would be;
We believe <this capability>
What functionality we will develop to test our hypothesis? By defining a ‘test’ capability of the product or service that we are attempting to build, we identify the functionality and hypothesis we want to test.
Will result in <this outcome>
What is the expected outcome of our experiment? What is the specific result we expect to achieve by building the ‘test’ capability?
We will have confidence to proceed when <we see a measurable signal>
What signals will indicate that the capability we have built is effective? What key metrics (qualitative or quantitative) we will measure to provide evidence that our experiment has succeeded and give us enough confidence to move to the next stage.
The threshold you use for statistical significance will depend on your understanding of the business and context you are operating within. Not every company has the user sample size of Amazon or Google to run statistically significant experiments in a short period of time. Limits and controls need to be defined by your organization to determine acceptable evidence thresholds that will allow the team to advance to the next step.
For example, if you are building a rocket ship you may want your experiments to have a high threshold for statistical significance. If you are deciding between two different flows intended to help increase user sign up you may be happy to tolerate a lower significance threshold.
The final step is to clearly and visibly state any assumptions made about our hypothesis, to create a feedback loop for the team to provide further input, debate, and understanding of the circumstance under which we are performing the test. Are they valid and make sense from a technical and business perspective?
Hypotheses, when aligned to your MVP, can provide a testing mechanism for your product or service vision. They can test the most uncertain areas of your product or service, in order to gain information and improve confidence.
Examples of Hypothesis-Driven Development user stories are;
We Believe That increasing the size of hotel images on the booking page
Will Result In improved customer engagement and conversion
We Will Have Confidence To Proceed When we see a 5% increase in customers who review hotel images who then proceed to book in 48 hours.
It is imperative to have effective monitoring and evaluation tools in place when using an experimental approach to software development in order to measure the impact of our efforts and provide a feedback loop to the team. Otherwise, we are essentially blind to the outcomes of our efforts.
In agile software development, we define working software as the primary measure of progress. By combining Continuous Delivery and Hypothesis-Driven Development we can now define working software and validated learning as the primary measures of progress.
Ideally, we should not say we are done until we have measured the value of what is being delivered – in other words, gathered data to validate our hypothesis.
Examples of how to gather data is performing A/B Testing to test a hypothesis and measure to change in customer behavior. Alternative testings options can be customer surveys, paper prototypes, user and/or guerilla testing.
One example of a company we have worked with that uses Hypothesis-Driven Development is lastminute.com. The team formulated a hypothesis that customers are only willing to pay a max price for a hotel based on the time of day they book. Tom Klein, CEO and President of Sabre Holdings shared the story of how they improved conversion by 400% within a week.
Combining practices such as Hypothesis-Driven Development and Continuous Delivery accelerates experimentation and amplifies validated learning. This gives us the opportunity to accelerate the rate at which we innovate while relentlessly reducing costs, leaving our competitors in the dust. Ideally, we can achieve the ideal of one-piece flow: atomic changes that enable us to identify causal relationships between the changes we make to our products and services, and their impact on key metrics.
As Kent Beck said, “Test-Driven Development is a great excuse to think about the problem before you think about the solution”. Hypothesis-Driven Development is a great opportunity to test what you think the problem is before you work on the solution.
More thoughts on Business Model Generation, Lean Startup and Continuous Delivery are included in our book, Lean Enterprise:How High Performance Organization Innovation At Scale.
We also run a workshop to help teams implement Hypothesis-Driven Development. Get in touch to run it at your company.
 Hypothesis-Driven Development By Jeffrey L. Taylor
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