The first thing I ever created (even before incorporating) for Reforge was a Business Hypothesis Canvas. Here is the actual one I wrote for Reforge in 2016.
If you are like me, when I get a new business my idea my brain runs in a million different directions. The Business Hypothesis Canvas helped me:
Structure the brain chaos into something coherent.
Force myself to see and answer questions I hadn’t thought of yet.
State my core hypotheses.
Focus on what ultimately mattered.
Communicate all of this to others in a clear and simple way.
The majority of the hypotheses reflected in this document ended up being correct and getting Reforge from $0 to $30M. Things like this canvas aren’t new. There are many methods to accomplish something similar like this one. But the reasons I dislike those:
They care more about the framework than the practicality of them.
They don’t distinguish what is important now from what might be important later.
They aren’t flexible.
The goal should be to structure your thoughts clearly in the fastest way possible so you can maximize your time building the actual product.
Let me walk you through the pieces step by step. In the post, I break down the canvas and what I would do differently if I could do it all over again.
🏆 Structure As Problem → Solution → Winning
This isn’t apparent from just reading the artifact but each section is purposefully ordered to answer the questions in this order:
🎯 Target Audience - Who are we targeting?
😱 Problem - What problem do they have?
❤️ Value Prop - What is our solution? Why do they care?
🗣️ Distribution - How are we going to make them aware of that solution?
💰 Monetization - How are we going to make money off the solution?
🛡️ Defensibility - If successful, how are we defensible?
⚔️ Alternatives - Who do we need to be defensible against?
I think a lot of founders start with the solution but that leads to incomplete thinking. Those questions flow in a very specific way and if you aren’t clear about the specific audience and problem first, the rest doesn’t matter.
Common advice is that “the only thing that matters is product market fit.” While true, it’s too simplistic. You need to have hypotheses for the four fits and how they fit together. Your distribution, monetization, and other hypotheses inform what you build. The reason I like the canvas is that it exposes holes in my thinking and what hypotheses don’t fit with others.
🧭 Now, Future, Not A Focus
Each section has a column labeled:
Now - These are the hypotheses we are trying to prove now.
Future - These are hypotheses on what we think could be opportunities as our next step.
Not a Focus - These are adjacent hypotheses that we are specifically not focused on.
This framework clearly distinguishes what is the focus now, what might be next, and what isn’t a focus. Many other frameworks like this try to capture the entire future of the business with out making this distinction. They send early stage founders spinning on things that just don’t matter in the moment.
Stating what you specifically aren’t doing is just as important as what you are doing. I think a lot of entrepreneurs are afraid to take things off the table early in the business and that leads to a lack of focus. I get it. It’s hard to say that you will “never” do something.
This format allows you to take some things off the table in a low pressure way. Over a long period of time we ended up pulling some of the items in the “Not A Focus” into “Now” and some of them became “Never” items as we solidified our conviction in certain areas.
The key here is just get this stuff down on paper in a succinct way that you can easily update as things evolve.
🚗 Create A Parking Lot For Strategic Questions
For some sections I create a parking lot area called strategic questions. These were questions that felt important at the time that I didn’t have answers for.
I see founders spin on these questions endlessly. They will always exist early in a project. You can never have all the answers. The risk is letting them slow you down.
Rather than letting them slow me down, I just created a parking area for them to come back to. Interestingly, some of these questions are ones we still face today even though I saw them 7 years ago.
You can see two strategic questions I had about distribution were:
How do we draw the line between free and paid content? We were using both content to drive marketing and monetization.
How do we compete in the world of HubSpot and others that already had dominant content/SEO forces?
🏛 Identify The Pillar Hypothesis
Every new business will have a most important hypothesis but which section it is in will vary from business to business.
For Reforge, the most important hypothesis out of all of them was around an underserved target audience.
At the time the market was flooded with bootcamps helping people get a job and low quality courses on places like Udemy.
Mid career professionals, people who already had a job, were under served, had a higher willingness to pay (access to company expense budgets), and didn’t have crazy outcome expectations.
This was the most important hypothesis because it influenced every other hypothesis we had. What we charged, the product experience, our go to market, and more.
It’s important to identify your most important hypothesis as that is where you want to concentrate your limited time. It’s usually the one that has cascading effects if it’s wrong.
🛡 Protect The Insight
Most new business start with an insight. Peter Theil calls it the “hidden secret.” The challenge is this gets chipped away at by others - new employees, investors, customers, etc. It’s a founder’s job to not only validate the insight, but protect it like an infant.
I used this artifact to protect Reforge from directions that outsiders try to pull us in. Here are some examples:
Creating a “Get A Job” Course
The most common suggestion I would get from new hires, outsiders, investors was “You should create a program that places people in growth roles. That would be gold!”
The problem with this is that serving the use case of taking someone from nothing to getting a job requires a completely different experience. Not to mention, is incredibly difficult.
At the time I had a hypothesis that you couldn’t take someone from no knowledge to getting a job in the timeline and at the cost that the customer wanted. That has played out to a certain degree with the fall of bootcamps but I actually hope someone figures out a 10X solution there.
Sell A Certificate
Another common suggestion from the peanut gallery - “you should sell certification for xyz role.”
While it’s true that it was a money making opportunity, I just don’t believe in my heart that it is what helps people get ahead in their career.
At the end of the day, the only thing that moves you forward over a long career is doing the work. I wanted to keep that central to Reforge’s mission.
Custom Courses
I knew that with some success we’d get requests around doing custom courses. We did and still get them today. A lot of companies are trained to think “Oh this is a small company, I can get them to customize to my needs.”
But we had a hypothesis that was both an unscalable path and the wrong solution for the customer so we just kept saying no.
Every company loves to think they are a special snowflake. After teaching tons of Reforge courses and seeing inside thousands of companies' problems, I can tell you that this sentiment is wrong 99% of the time. Problems repeat.
❌ What I Got Wrong
You can get the full Business Hypothesis Canvas, download it, and create your own version on Reforge. You can also see some additional notes on:
What hypotheses I got wrong about Reforge.
How we thought about pricing in the early days.
Strategic questions we still struggle with today.
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