Reference · Phase 2 — Product Recommendation & Design
Business Case, Right-to-Win & Assumption Testing
Load when business case components, scenario/sensitivity analysis, right-to-win, assumption testing.
Part of the Product Strategy skill · loaded on demand from SKILL.md
Part of the product-strategy skill. See SKILL.md for the workflow spine and when to load this file.
XII. Business Case & Investment Model
Purpose
Determine whether the product strategy creates sufficient financial value to justify investment.
Business Case Components
A complete business case should include:
- Addressable market
- Target segment size
- Adoption forecast
- Revenue model
- Pricing assumptions
- Gross revenue
- Variable costs
- Partner costs
- Cost-to-serve
- Losses, fraud, leakage, or churn
- Gross margin
- Contribution margin
- CAC
- Opex
- Capex
- Investment requirements
- Payback period
- Break-even point
- NPV / IRR, where relevant
Core Metrics
- Revenue
- Gross margin
- Contribution margin
- EBITDA impact
- CAC
- CAC payback
- LTV
- LTV:CAC
- Churn
- Retention
- ARPU
- ARPA
- ARPPU
- Usage frequency
- Conversion rate
- Activation rate
- Cost-to-serve
- Break-even volume
Scenario Planning
Build at least three cases:
Downside Case
Assumes:
- Slower adoption
- Lower conversion
- Lower pricing
- Higher CAC
- Higher churn
- Higher cost-to-serve
- More regulatory or partner friction
Base Case
Assumes:
- Expected adoption
- Realistic conversion
- Market-aligned pricing
- Manageable costs
- Expected launch timeline
Upside Case
Assumes:
- Faster adoption
- Higher conversion
- Better pricing power
- Lower CAC
- Strong retention
- Successful expansion
Sensitivity Drivers
Test sensitivity to:
- Market size
- Eligible share
- Conversion rate
- Activation rate
- Usage frequency
- ARPU
- Pricing
- Churn
- Retention
- CAC
- Partner fees
- Cost-to-serve
- Loss / fraud rate
- Regulatory cost
- Time-to-market
- Cannibalization
XIII. Right-to-Win Assessment
Purpose
Determine whether the client has a credible advantage and what must be built or acquired to win.
Right-to-Win Lenses
Assess advantage across:
- Customer access
- Existing customer base
- Brand and trust
- Distribution reach
- Data and insight
- Technical capability
- Product capability
- Regulatory permissions
- Operational maturity
- Partner access
- Balance sheet or capital
- Cost-to-serve
- Ecosystem integration
- Proprietary technology
- Switching costs
- Network effects
- Service quality
- Speed of execution
Right-to-Win Questions
- Why is the client better positioned than competitors?
- What assets can be uniquely leveraged?
- What capabilities are missing?
- Which advantages are durable?
- Which advantages are easy to copy?
- What must be built, bought, or partnered?
- What would cause the client to lose?
Outputs
- Advantage map
- Capability gap assessment
- Defensibility thesis
- Strategic control points
- Build / buy / partner recommendations
- Required investments
- “Why we win” executive page
XIV. Assumption Testing & Validation Plan
Purpose
Convert strategy assumptions into testable hypotheses before committing major investment.
Key Assumption Categories
Customer Assumptions
- The problem is real
- The problem is painful
- Target customers are reachable
- Customers understand the proposition
- Customers will adopt
- Customers will switch
- Customers will pay
Product Assumptions
- MVP solves the core need
- Features are sufficient for adoption
- User experience is intuitive
- Product can be delivered reliably
- Product can scale
Economic Assumptions
- Pricing is acceptable
- CAC is manageable
- Unit economics are viable
- Retention is sufficient
- Cost-to-serve is manageable
Execution Assumptions
- Required partners are available
- Regulatory path is feasible
- Capabilities can be built or sourced
- Timeline is credible
- Operating model can support launch
Validation Methods
- Customer interviews
- Concept testing
- Prototype testing
- Usability testing
- Landing page test
- Smoke test
- Pricing research
- A/B testing
- Beta launch
- Pilot launch
- Partner diligence
- Technical proof of concept
- Regulatory consultation
- Operational dry run
Validation Plan Template
| Assumption | Test Method | Success Threshold | Owner | Timing | Decision |
|---|
Validation Outputs
- Assumption map
- Test plan
- Pilot design
- Success thresholds
- Kill / pivot / persevere criteria
- Evidence log
- Next-step recommendation