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Product Management8 min read

A/B Testing Economics: The ROI of Running More Experiments

Companies that run 10x more experiments grow 5x faster. Here's the math.

By Richard Ewing·

The Experimentation Advantage

Microsoft's research: increasing experimentation velocity by 10x correlates with 5x revenue growth. Each experiment costs $5-20K (engineering time). Each winning experiment generates $100K-1M in annual revenue impact.

Expected value of an experiment: 30% win rate × $300K average impact = $90K expected value. Investment: $10K. ROI: 800%. Run more experiments.

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Published Work

This article expands on ideas from my published work in CIO.com, Built In, Mind the Product, and HackerNoon. View published articles →

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Richard Ewing

The Product Economist — Quantifying engineering economics for technology leaders, PE firms, and boards.