Laura Hollis

It’s official: the Obamacare rollout was an unmitigated, absurdly expensive disaster. When even the administration’s biggest fans in the media (The Huffington Post, The New York Times, The Washington Post) are forced to admit it, it’s so obvious as to be excruciatingly painful.

But some of us who teach entrepreneurship could have predicted it. (Though, I will admit, even I was stunned to read that the federal government had shelled out nearly two-thirds of a billion dollars on millions of lines of garbage code.) Observing this administration’s complete ignorance of (and often, hostility to) business made clear early on that such a failure would be inevitable. They made every mistake in the book. Here are just a few of them:

1. Not identifying your assumptions

This is Obamacare Major Mistake #1. And to a certain extent, it’s forgivable. Even businesses blow this. All first-time entrepreneurs think they are launching a product or starting a business. But they aren’t. They are actually testing assumptions about that product or business: assumptions about the customers; assumptions about the features and functions those customers want; assumptions about pricing; assumptions about the competition; even just basic assumptions about human behavior.

No matter how bright or talented you are (and more about this, below), you won’t be right 100% of the time. And the newer, or more “disruptive” a product or service or business model is, the more the entrepreneur is working in the dark. Chances are, at least one of his or her fundamental assumptions is wrong. The key is to find out which assumptions are right and which are wrong without breaking the bank. That means creating and testing initial iterations of the product, or “beta” versions. Which brings us to Obamacare Major Mistake #2:

2. No beta-testing

This term was initially used strictly in software development, but has now permeated throughout product development in virtually every industry. No entrepreneur worth his or her salt would dream of launching a product without having tested earlier versions of it. Especially when it is a computer program.

Laura Hollis

Laura Hollis is an Associate Professional Specialist and Concurrent Associate Professor of Law at the University of Notre Dame, where she teaches entrepreneurship and business law. She is the author of the forthcoming publication, “Start Up, Screw Up, Scale Up: What Government Can Learn From the Best Entrepreneurs,” © 2014. Her opinions are her own, and do not reflect the position of the university. Follow her on Twitter: @LauraHollis61.