A/B Testing for Startups

A/B Testing .... of experimentation for Startups.   Intriguing paper.

Experimentation and Startup Performance: Evidence from A/B Testing   by Rembrand Koning, Sharique Hasan, and Aaron Chatterji in HBS Working Knowledge

Is experimentation the right strategy for startups? This analysis of the adoption of A/B testing technology by 35,000 global startups provides evidence that a strategy based on repeated experimentation will improve performance over time. However, the benefits of experimentation vary. Experimentation helps younger startups “fail faster,” while older firms may discover new, high-growth products.

Author Abstract
Recent work argues that experimentation is the appropriate framework for entrepreneurial strategy. We investigate this proposition by exploiting the time-varying adoption of A/B testing technology, which has drastically reduced the cost of experimentally testing business ideas. This paper provides the first evidence of how digital experimentation affects the performance of a large sample of high-technology startups using data that tracks their growth, technology use, and product launches. We find that, despite its prominence in the business press, relatively few firms have adopted A/B testing. 

However, among those that do, we find increased performance on several critical dimensions, including page views and new product features. Furthermore, A/B testing is positively related to tail outcomes, with younger ventures failing faster and older firms being more likely to scale. Firms with experienced managers also derive more benefits from A/B testing. Our results inform the emerging literature on entrepreneurial strategy and how digitization and data-driven decision-making are shaping strategy  .... '