How To Create a Flawed Business Model

Doctors are not very good at technology adoption and frequently make Type 1 or Type 2 technology adoption errors. A type 1 error occurs when they make a “false positive” error and use or do something that is not justified by the evidence. Type 2 errors, on the other hand, are “false negatives” where the practitioner rejects or does not do something that represents best evidence practice.

Entrepreneurs make the same mistakes, and more, when they design and analyze the results of experiments to validate underlying assumptions of their business models. Here are some common mistakes:

1. They offer products, models and services they should not

2. They don't offer products, models and services they should

3. They think the market is smaller that it really is

4. They think the market is larger than it really is

5. They design experiments incorrectly so they get misleading data

6. They misinterpret the data obtained from well designed experiments

7. They test for things that are interesting but not important

8. They use testing techniques that bias the results

9. They are blind to substitutes or other environmental threats that makes the experiments irrelevant

10. They take too long and spend too much money doing the experiments.

The ABCDEs of business model design are much like the ABCDEs of technology adoption. The clinical mindset is not that much different than the entrepreneurial mindset and it's one of the reasons why doctors have the potential to make great entrepreneurs. However, they also have the potential to make the same mistakes.