Unternehmertum und Organisationsmanagement

Lean Startup as an Entrepreneurial Strategy: Limitations, Outcomes, and Learnings for Practitioners

Abstract

John M York, Jonathan L. York and Philip Powell

Purpose: This paper aims to address three core questions: (1) What are the limitations of this methodology and its use as an entrepreneurial strategy?; (2) What are the outcomes associated with using this approach?; and (3) What learnings should practitioners consider when utilizing this approach? Methodology: A review of available peer and non-peer review literature relevant to the lean startup methodology, its limitations (pitfalls, fallacies, problems), and outcomes to address the core questions.

Findings: This review identifies limitations with the methodology in several areas−business sector fit, issues associated with customer discovery, experimentation, iterating/pivoting, and the minimum viable products. Limitations may be related to the methodology, the incomplete understanding of its fundamental components, inconsistent (and non-rigorous) use of the methodology, and the inability to address risks (e.g., technological) beyond resolving market uncertainty. Also, experience related to outcomes associated with the use of the lean startup reveals mixed findings due to the diverse methods, populations, and endpoints used underly the mix of experiences seen in both the peer and non-peer review literature. This review does identify that rigorous implementation does lead to statistically significant outcome differences (e.g., discarding poor ideas, number of pivots, and realization of revenue). Practical Implications: Practitioners and educators should consider considerations around education, implementation, business sector, outside influences, outcomes, and investor preferences.

Originality: This paper provides one of the first extensive literature reviews to examine what limits exist, where, and whether these are associated with the methodology or due to user, cultural, or business sector considerations. It also provides several relevant learnings for practitioners and educators to consider when using the methodology.

Conclusions: Current evidence indicates that multiple issues do exist; however, the limits are not necessarily directly related to the inherent structure of the methodology, but also due to user, sector, and external influences. Further, outcomes vary based on study methods, variables, populations, business verticals, and implementation. Practitioners should consider some of the recommendations offered when utilizing this methodology to optimize their experience and outcomes from this method.