Approach Everything with the Scientific Method

The scientific method has the following steps

1. Ask a question
2. Create a hypothesis
3. Use the hypothesis to make a prediction
4. Create a test to prove the prediction
5. Analyze the results and repeat

In the case of investing

1. (Question) How can I make a 10% return in 6 months
2. (Hypothesis) If I buy stocks related to exponential technologies I will make 10% is six months (I am making the hypothesis quite vague because I don’t want this taken as investing advice)
3. (Test) Buy the stocks
4. (Analyze) Measure the money you invested compared to the money you have after 6 months.  At this point, you evaluate the hypothesis to see if it can be refined.

In the case of marketing

1. (Question) How can I generate 100 sales
2. (Hypothesis) If I run a Facebook ad to the landing page will generate 100 sales a month
3. (Test) Create the Facebook ad and the landing page and run for a month
4. (Analyze) Measure the number of sales made in the month. The measurement also includes sub measures such as traffic, ad cost, impressions, etcetera.  The hypothesis is then analyzed to see if it accurately predicts sales.

In the case of parenting

1. (Question) How can I get my daughter to do her homework
2. (Hypothesis) If I ask her to explain what she is learning she will focus on her homework
3. (Test) I will ask her to explain for the next week
4. (Analyze) Measure how well she completed her homework for the week

A few key points

The test step of the scientific method is what people traditionally view as the work to be done.  The scientific method changes your perspective. Rather than focusing on doing the work, you are focusing on creating a hypothesis that can then be used to predict the future.  It is out of the hypothesis that business wisdom and life wisdom originates. It is the hypothesis that has the most value because it is a predictor of the future.

As the hypothesis gets refined, the predictions that the hypothesis can generate become broader.  It is through the refinement of the thesis that we gain the business wisdom to understand which marketing methods work the best in a given situation, or which investment strategies are the most effective.

Another key point in refining a hypothesis is to understand how repeatable the hypothesis is.  A hypothesis that can only predict the future once is not very valuable, a hypothesis that can be used over and over to predict the future is very valuable

With the scientific approach, the test does not need to be a positive test. In the case of the investing hypothesis, the test could be to buy random stocks.  If the return is still 10% then the hypothesis is not that powerful.