Multiple Paths to Value: Test Two, Choose One
You have an idea for a new business, but there are multiple paths to create and capture value. To choose a path, you have to experiment, but experiments are costly and require at least a partial commitment, which consequently alters the nature of the path, precludes other paths, or worse, takes you down a path of no return. This article describes this entrepreneurial paradox and summarizes the key factors that need to be weighed at every step to hone and optimize make-or-break choices. Although the strategic considerations presented in this article are common to any competitive strategy, the authors discuss the specific ways in which entrepreneurial strategy is different. Rather than using experiments to justify a particular choice, the goal is to whittle down choice sets until you are faced with two equally viable alternatives. That is when to "test two, choose one," which is the recommended approach for decision-making under conditions of uncertainty.