DEVELOPING SUCCESSFUL NEW has
long been considered an activity that
relies on epiphanies and instinct, but
in recent years entrepreneurs have
refined their inventions by relying on
scientific methods imported from the
hard sciences. These methods include
Rita McGrath’s discovery-driven planning,
Eric Ries’ lean startup process,
and David Kelley’s design thinking
protocols. But do these approaches
work for new social ventures?
The Hult International Business
School has more than an academic interest
in this question. Every year, our
students participate in the Hult Prize,
an international business pitch competition
in which teams tackle global
challenges. For example, in 2017,
participants devised private-market
solutions that would bring 10 million
refugees into the formal economy.
Hosted by a sister organization to the
school, the Hult Prize awards US$1
million to the winning team.
To discover the processes that
top teams use to develop their pitches,
researchers at Hult asked 353
business students how they created
and refined their ideas. We found that
the students who created and tested
hypotheses performed significantly
better than teams that relied on their
own internal logic and experiences.
Students who won their regional
competitions tested twice as many
hypotheses as those who did not win.
Those who won the entire competition
confirmed three times as many.
Moreover, we found a positive
correlation between students’
perceptions of self-efficacy—their
confidence in their abilities—and the
number of hypotheses they confirmed.
We concluded that students
who perform well rely on the scientific
method, which in turn requires a
degree of self-confidence.
An even more powerful predictor
of student success was the number
of rejected hypotheses. Students who
won in their regional competitions
rejected hypotheses at a rate four
times greater than those who did not
win. Yes, that’s right: Students who
discovered that their first ideas did
not capture customer demand were
more successful in the long run.
That’s why we will encourage
our students not only to cultivate
self-confidence, but to test and reject
more hypotheses before settling on a
final idea. By relying on a combination
of swagger and science, they will create
solutions with global implications.
Ted Ladd is dean of research at Hult
International Business School.
He is based in San Francisco,
California. This data was originally
presented as “Science and Swagger
to Overcome Uncertainty” at the
U.S. Association of Small Business
and Entrepreneurship conference
in January 2018. The author also is
revising it into a book chapter.