This article reconstructs the pilot implementation of the Livelihoods for Vulnerable Urban Communities (LVUC), a community-driven development project in the Philippines, as a living laboratory and an implicit real-life experiment. Real-life experiments aim at identifying surprising interactions between the experimental system and its context, while a living laboratory not only emphasizes experimentation but also co-creation. Our goal in analysing data from a sixteen-month process-oriented assessment of the LVUC project is to explain why a development project's ability to handle surprise, or the unexpected, during implementation promotes community participation. Surprises arise because development projects inevitably involve knowledge mobilization. As a real-life experiment and a living laboratory, the LVUC project mobilized knowledge in two ways: first, by drawing on tested and accepted knowledge on how to induce community participation, and second by identifying events that occur unexpectedly and run counter to accepted knowledge about community-driven development. While often manifesting themselves as implementation difficulties, surprises can generate new knowledge and opportunities for innovation and co-creation. Many social science and development practitioners are wary of the notion of ‘experiment’, associating it with the social costs of experimenting with people. Lessons from the LVUC project, however, show that development projects must recognize the mobilization of knowledge as a component of implementation. The adoption of experimental habits and the problem-solving mode is the corollary of this recognition.