Making the lean start-up method work: The role of prior market knowledge

Abstract

A large majority of growth-oriented ventures extensively uses venture experimentation popularized by the lean start-up method, yet we know very little about the boundary conditions under which this method can be successful. Using a longitudinal multiple case study method, we investigate how growth-oriented ventures apply the lean start-up method to achieve early venture success. We find that the presence of prior market knowledge is an important boundary condition for successfully applying the lean start-up method. We also contribute to the absorptive capacity literature by clarifying how new ventures build absorptive capacity early in their venture lifetime.

Driving internationalization through business model innovation

“…Others suggests to adopt a unique BM while aligning with shifting demand (e.g. Sosna et al, 2010;Doz and Kosonen, 2010). Our study shows how the latter strategy may result appropriate when firms -operating in the emerging AgTech industry -face internationalization.…”

“…To this end, we extend the current debate by arguing that following Lean Startup Approaches and principles (e.g "starting small" or "get of the building", experiment and test on customers) may apply also for small existing enterprises operating in agriculture industry willing to grow through internationalization. This extends the action space of Lean Startup Approaches, which are traditionally applied mostly to digital or internet startups in their early stages of development (Ghezzi, 2018;De Cock et al, 2018) and points at an additional phase of the business model innovation process for firms willing to internationalize that extant literature on BMs and internationalization alike disregarded, i.e. business model experimentation and validation, intended as the need to experiment on the proposed innovations in the business models to verify their viability and market potential.…”

Liquidity events and VC-backed academic spin-offs: The role of search alliances

“…This increases their business opportunity set without the need for additional investments in downstream markets. Each additional market search alliance also accelerates discovery-based learning and inmarket experimentation, thereby contributing to the creation of firm value (De Cock et al, 2018). A higher number of business opportunities also increases the growth options and thus firm value (Gruber et al, 2008).…”

Pivot decisions in startups: a systematic literature review

“…• Barriers or difficulƟes for profiƟng (Stayton and MangemaƟn, 2016) • The failure of the current approach to the market (Marx and Hsu, 2015) • When entrepreneurs think internaƟonally (Crick and Crick, 2018) • Changes in the business offering and product (Buccieri et al, 2020) • Changes in the original plan, resource combinaƟon (Bhawe et al, 2016) • Changes in the business belief and model (Axelson and Bjurstrom, 2019) • Young firms need to quickly develop incremental pivots to ensure their offerings (Buccieri et al, 2020) • Even the most successful start-ups don't necessarily end up the way they started (Bajwa et al, 2017b) • The efforts may be placed around the customer instead of the product (O'Connor and Klebah, 2011) • Future research should examine whether both addiƟons and exits are necessary to produce a pivot (Kirtley & O'Mahony, 2020) • Further research related to the links between commitment, theories, problem-solving and experimentaƟon (Felin et al, 2019) • To examine growth-oriented start-ups in different contexts (De Cock et al, 2019) First-order concepts Second-order themes 2010) appeals to the discovery-driven approach that allows firms to adapt and navigate high-uncertainty environments. Chesbrough (2010) and Chesbrough and Rosenbloom (2002) study how experimentation processes like effectuation might enable BM innovations.…”