Lore

Evidence Spectrum for Validating Business Ideas

Evidence for a new business idea exists on a spectrum of strength, and the amount of investment committed to an idea should scale with how strong the evidence backing it is:

  1. Stated opinion (weakest) — what people say they want
  2. Tangible reactions — observed responses to a prototype or pitch
  3. Lightweight signups — low-friction expressions of interest
  4. Click-throughs — behavioral intent signals
  5. Financial or reputational commitment — people risking something to get it
  6. Real market evidence (strongest) — actual paying/using behavior at scale

Reducing innovation risk comes only from gathering evidence like this from the real world — talking to people, testing, experimenting — not from more internal analysis or bigger spreadsheets; see Business Plans as "Fantasy Made Explicit". In a well-run innovation system, evidence requirements for a bet scale up by phase, and bigger investment decisions are gated behind stronger evidence — the mechanism used in Explore/Exploit Dual Portfolio Management's growth-board reviews.

Evidence Tiers and the Say-Do Gap

The ladder runs from weakest to strongest:

  1. Stated opinion (survey answers, interview claims)
  2. Tangible mashup reactions (reacting to a prototype/mockup)
  3. Lightweight signups
  4. Click-throughs
  5. Financial or reputational commitment (pre-orders, down payments, a public promise)
  6. Real market evidence (actual paying usage)

This tiering comes from Osterwalder and David Bland's Testing Business Ideas methodology, whose practical technique is to rate the strength of evidence separately for each Business Model Canvas block rather than relying on one willingness-to-pay data point — the same discipline shows up as scoring desirability/feasibility/viability/adaptability separately.

The tiering matters because of the say-do gap: what people say ("I'd definitely use this") is a different, weaker strength of evidence than what they do (paying, clicking, signing up), and larger investment decisions should demand evidence from higher up the ladder. A cheap way to catch a say-do gap in the wild is the URL test — send a stakeholder or prospect a specific call-to-action link and see whether stated interest converts into an actual click; Osterwalder uses it to catch senior leaders who claim support but won't act.