Choosing an Experimental Strategy: How Experimental Heisenberg Effects Can Affect Decisions About When and How to Experiment

Abstract

Current thinking is that experiments should be conducted when the value of an experiment’s informativeness is greater than its cost. This thinking fails to recognize that experimenting can also change the value of a business idea—what we call an experiment’s Heisenberg effects. These effects can increase or decrease the value of a business idea and can affect both when and how a firm should experiment. Failure to consider Heisenberg effects can lead a firm to experiment when it should not, to not experiment when it should, and to experiment in ways that do not maximize a business idea’s value.

Keywords: New Experimental Strategy; Experimentation; Entrepreneurship