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The  Lean  Startup  Method:  a  new  road  for  

entrepreneurs?  

Bachelor thesis to obtain: BSc Business Administration

Stijn Frankfoorder – 10216715 Amsterdam, June 29, 2015  

Faculty of Economics and Business Administration Department of Business Administration

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This document is written by Stijn Frankfoorder, who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Table  of  content    

BACHELOR  THESIS  TO  OBTAIN:  BSC  BUSINESS  ADMINISTRATION  ...  1  

ABSTRACT  ...  4  

1  INTRODUCTION  ...  5  

2  THEORETICAL  BACKGROUND  ...  7  

3  METHODOLOGY  ...  15  

4  RESULTS  ...  19  

           4.1  IMPLICATIONS  OF  THE  USE  OF  THE  LSM.  ...  20  

           4.2  THE  ELEMENTS  WITHIN  THE  LSM  ...  28  

         4.3  HOW  ORGANIZATIONAL  CHARACTERISTICS  INFLUENCE  THE  LSM.  ...  36  

5  SUMMERY  RESULTS  ...  43   6  DISCUSSION  ...  44   7  CONCLUSION  ...  47   8  REFERENCES  ...  48   9  APPENDIX  ...  54        

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Abstract

Schumpeter was the first researcher who proved the economic importance of

entrepreneurship. Since his research, many follow up researches are conducted to improve the success of entrepreneurs, which resulted in the ‘classical entrepreneur’. Eric Ries believed to have an improved method, called the Lean Startup Method, which cuts through uncertainty that surrounds entrepreneurs. Peter Thiel, on the other hand, believes there is no additional value in the Lean Startup Method. Both, Pieter Tiel and Eric Ries have no scientific evidence supporting their statements. In order to deliver scientific evidence on topic, the aim of this research is to answer whether the Lean Startup Method is an upright method for

entrepreneurs. The empirical research conducted, clarifies that a distinction needs to be made between a startup and corporate company. The data proclaims that the method is an upright method to use for startup companies. The LSM is, however, not an upright method for

corporate companies, because of the organizational characteristics like the lack of freedom of making mistakes and not taking responsibility within the corporation.

                                                   

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1 Introduction

 

The  historical  importance  of  entrepreneurship    

The first entrepreneur in history was called an “undertaker” by Richard Cantillon in 1755. “ A person that does not retreat from engaging in risky business ventures”. Jose Alois Schumpeter (1934) was the first who talked about entrepreneurship in a scientific way. In his paper he was one of the first economists who publicly recognized the importance of entrepreneurs within the economy. We are living in a complex and dynamic world in which innovation and

entrepreneurship are occupying a decisive role for economic development. ”The only function that is fundamentory in history is carrying out innovations” (Schumpeter, 1934).

Today the influence of entrepreneurship is not part of the discussion. Technological

innovation and entrepreneurship are considered to be key factors to national economic growth (Crosby, 2000; Solow, 1956; Nadiri, 1993). And according to Audretsch and Thurik (2001), the influence of entrepreneurship is getting bigger, as we move to an economy in which policies fostering creation and commercialization of new knowledge are central. To give you an idea: ‘Only startups create an average of 3 million new jobs annually’ (Kane, 2010).  

Failing  percentage      

Even though it may be clear that entrepreneurship is important, 50% of the startups fail within the first 5 years (CPB, the Netherlands; Cooper, Woo, and Dunkelberg 1988). A recent study in America even showed that 75% of all startups fail (Ghosh in Blank, 2013). One of the reasons for this high failure rate could be today’s fast changing environment, and the lack of understanding its dynamics (Heidi & Minna, 2014; Ries, 2011; Blank, 2013).

   

Failing  of  the  current  methods  

Because of this high failure rate in recent decades, more research was conducted. This research focused on what could improve the quality of entrepreneurship (Watson, Scott & Wilson, 1998; Barron & Hannan, 2002). This approach coincides with the traditional way of entrepreneurship, which is described as writing a business plan, pitching it to investors, assembling a team, introducing a product, and starting to sell as hard as you can (Blank,

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2012). But after years of using this traditional way of thinking, the only thing we are really sure of is (Blank, 2013):

Ø Business rarely survives after initial contact with customers, due misunderstandings of the customers wants.

Ø A (5 year) plan is impossible to predict;

Ø Small startups are not very different from big enterprises.

As a reaction to this traditional, slow way of starting an own business, entrepreneurs began to use the ‘just do it’ method. This method avoids all forms of management just by starting, but has the downside of being lead by chaos (Ries, 2011).

Introduction  of  the  Lean  Startup    

Recent years different methods were presented as a revolutionary method for entrepreneurs. None of them received so much positive attention as the method from Eric Ries. Ries (2011) believes both methods (the ‘classical method’ and the ‘just do it method’) are not the way to go. In his opinion successful entrepreneurship requires managerial discipline in order to harness the managerial opportunity we have been given.

As a consequence Ries published a new theory on entrepreneurship in 2011. His theory, called the Lean Startup Method (LSM), cuts through the uncertainty (caused by the fast changing environment) that surrounds startups. The heart of this theory is an innovation method for startup companies that claims that the most efficient innovation is the one that has an actual demand by the users (Müller & Thoring, 2012). As a critique, Peter Thiel (2014) calls the LSM a method that makes small changes to principles that already exist. In his book, Thiel says LSM is nothing new and therefor does not have any positive effect on startups. Here lies the contradiction: Ries states the LSM is a new and improved method for entrepreneurs, Thiel says it is not.

This contradiction brings us to the research question, which is: ‘From an entrepreneur’s point of view, to which extent is LSM a upright method for starting?’

Sub questions related to the research question are: 1. Is this method recognized as being useful?

2. Is there any dissimilarity in different types of organizations? 3. What could be an explanation for those dissimilarities?

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2 Theoretical Background

In order to answer the research question, a theoretical framework will be provided. First the foundations on which the LSM is built will be explained and it will become clear why the method is shaped in this particular way. Once the foundations are clear there will be a framework of the five most important elements of the LSM. How they are connected can be found within the model of the LSM, which will subsequently be presented. Lastly, in order to explain why there could be a difference in the implementation of this method, an explanation of the organizational differences between the corporate company and the startup company will be examined. All together this will create a framework, which can be used to analyze the data.

The  foundations  of  the  LSM   Entrepreneurship

In order to understand the foundations of LSM, a description of an entrepreneur is required. The personal characteristics of an entrepreneur highlight its qualities. Furthermore its demonstrates can add to an organization.

The entrepreneur is seen as an individual with unique personality traits. Risk taking, locus of control, autonomy, perseverance, commitment, vision and creativity are all personal

characteristics accredited by Gartner (1990) to entrepreneurs. Birch (1987) adds flexibility to this list. Caird (1988) believes that this list still misses characteristics like having a good nose for business and the ability to correct errors effectively. Also the ability to co-operate,

knowledge of market functions and manufacturing know-how are all associated with entrepreneurship (Casson, 1982).

Innovation is to be associated with entrepreneurship as the idea of doing something new; a new idea, product, service, market, or technology explored in a new or established

environment (Backman, 1983; Garner, 1990; Stevenson and Gumpert, 1985). These authors state clearly that innovation can flourish in both corporate and startup environment. This innovation creates fundamental change according to Murray (1984).

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Organizational creation is described by Gartner (1990) as all the behavior needed in order to create an organization, in a highly uncertain environment. Behavior is described as acquiring and integrating resources, but also as adding new businesses in order to create additional value. This accumulation of activities, combined with organizational structure creates an organization.

Activities include creating a business, transforming a business and growing a business in such a way that total value rises. According to Porter (1985) the value of a company is measured by its total revenue. Value can be obtained through activities resulting in products and

services that lower buyers’ costs or raise a buyers’ performance. Activities that increase value are associated with entrepreneurship.

Being a manager or owner in an ongoing (smaller) organization is often tied to

entrepreneurship. (Gartner, 1990). Therefore, in this research, ‘entrepreneurs’ are both entrepreneurs within a startup and intrapreneurs within a corporation (Antoncic and Hisrich, 2001).

Agile Software Development

The first concept, which is influential in the creation of LSM, is agile software development. Agile software development is a group of software development methods in which

requirements and solutions evolve through collaboration between self-organizing, cross-functional teams. It promotes adaptive planning, evolutionary development, early delivery and continuous improvement and encourages a rapid and flexible response to changes (Cockburn & Highsmith, 2001). Many of these characteristics can be found within the LSM as well.

In both methods a high degree of uncertainty is a central theme. This is because it is unclear what the exact goal is (Cohen, Lindvall & Costa, 2004). This principle can be found within the LSM, as entrepreneurs do not know who their customer will be or what the exact product should be like (Eisenmann, Ries and Dillard, 2012).

A consequence of this high degree of uncertainty is that finding out quickly what is exactly

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you are aware of what your customer really wants, the faster you are capable of producing that what is wanted by your customers. So the faster you learn, the faster you are certain. However, you should keep in mind that our world is constantly changing at a much quicker pace than ever before (Blank, 2013). Opportunities rise and fall. This makes it harder to find out quickly what your customers want, as customer’s preferences change just as fast. In order to meet these fast changing customer requirements, entrepreneurs need to work

closely with the customer, allowing them to change their minds and therefore understanding

what their customers want. (Poppendieck, 2002).

Creating a culture of continuous improvement is necessary to successfully implement agile software. Therefore the process needs to be allowed to change by learning from both successes and mistakes (Poppendieck, 2002).

Lean Thinking

Lean Thinking (LT) is another theory that had influenced the LSM. This theory starts with the customer and the definition of value. According to Naylor, Naim and Berry (1999) the idea behind LT to develop a value stream to eliminate all waste and to ensure a level schedule. So the most important principle in LT is the elimination of waste (Ohno, 1978). Waste can be seen as an activity that does not add any value to the customer (Melton, 2005). Here you can find the main connection between LT and LSM: waste from LT can be seen as every feature of a product or service of which a customer is not willing to pay for. It is the goal of

entrepreneurs to find all features that add value and lose the ones that don’t (Ries, 2011). The advantage of this is the optimization of all existing characteristics within the product. A big difference that lies between LSM and LT is that the latter focuses solely on the

improvement and the development of products and does not pay attention to innovation. This innovation advantage makes the LSM a useful method in today’s fast changing environment.  

   

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The  elements  of  the  LSM    

The LSM can be seen as a combination of foundations mentioned in the previous section. An entrepreneur is capable of creating an organization in a risky environment, while finding out what its customers want as quickly as possible. This is combined with the elimination of waste. “The goal of a startup is to figure out the right thing to build – the thing customers want and will pay for – as quickly as possible.” (Ries, 2011) The most important elements provided by Ries (2011) to reach this goal are described in the next part.

Get Out of the Building

The idea begins with the entrepreneur needing to know what their customers want, which is described as ‘getting out of the building’. This process has two meanings. The first meaning is the ability to gain inspiration for products or services by knowing which problems need to be solved. The second one is presenting new ideas to customers for their feedback (Bieraugel, 2015)

Preserve or Pivot

Starting a business means you might begin traveling along one path but sometimes changing the route is necessary in order to reach the destination. In fact, you might even need to change your destination entirely. Successful startups are attuned to this procedure (Mathews, 2012). The preserve or pivot decision is an element which differentiates classical entrepreneurship from the LSM. A pivot is a change that test hypotheses within the LSM, which is central to its success (Ries, 2011). The test involved determines what the customer thinks is valuable. These decisions will influence the MVP, which we shall discuss later. A pivot can mean significant changes in the MVP, possibly leading to the creation of an entirely new service (Bieraugel, 2015). When there is a positive outcome of the hypotheses, the entrepreneur should restrain from pivoting (Ries, 2011).

Fast Iteration

Fast iteration is needed within the LSM, because there is a need to constantly develop the product. Fast iteration is needed to keep track of the constant improvements you make within the cycle. The ultimate goal is to find out quickly which product requirements are desired, and which are not. (Mathews, 2012; Bieraugel, 2015)

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Validated Learning

Validated learning is described by Ries (2011) as ‘the process of demonstrating empirically that a team has discovered valuable truths about startup’s present and future business prospects. It is more concrete, more accurate and faster than market forecasting or classical business planning’. In my own words I would describe it as a process of learning of what adds (and what does not add) value to the organization. In this sense, organizational learning should be seen as part of validated learning. Cyert and March (1963) describe organizational learning as creating, retaining and transferring knowledge within the organization. This can be about a product or any other aspect of the organization. As you know, entrepreneurship

emerges in an environment where the future is unknown. In regards to organizational

learning, it may be stated that creation of service or product within an unknown environment is the main focus within the LSM. It is based on the idea that entrepreneurs should make their implicit assumptions about how their venture works and how the market works explicitly (Harms, 2015). In his assumption of the central theme of learning, Weiss (19990) describes it as “relatively permanent change in knowledge or skill produced by experience”. Another factor is gaining experience, which is crucial in LSM. Gaining experience provides insight on seeing whether you are on the right track. With the information received from your

experience, you are capable in answering the critical question such as whether or not to preserve or pivot your hypotheses Ries (2011).

Minimum Viable Product.

The idea within LSM is that there is a constant product development, which is caused by validated learning. Theories regarding product development can be of great value in

understanding why it is important to the LSM, and how constant product development can be attained. The definition of product development is as follows: ‘from market opportunity into a product to sell’ Krishnan, Viswanathan, and Ulrich (2001). Keep in mind that every startup begins with an idea within an environment that is uncertain (Ries, 2011).

Customer needs and wants are therefore important to know. This particular view is also included in the ‘new view’ of product development, which means customer needs are a priority in regards to product development. So the main principle used by the LSM is that of the ‘new view’, which means that, customers are included as fast as possible in the

development of a new product. (Ries, 2011). The idea of the MVP is to launch your product, even if you feel like it is not ready yet. When it’s good enough, go for it. The reasoning behind this is that the MVP is in a constant state of beta (Mathews, 2012).

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Once you start of with the MVP, you allow the organization to start learning validated lessons. Once the MVP is built and launched, customers will use the MVP and the organization will assess how well it works (Bieraugel, 2015)

All these characteristics can be summarized into this loop diagram below. The build-measure-learn loop explains how these elements are mutually dependent. The validated build-measure-learning is the learn part; the MVP is the build part; and the preserve or pivot is the measure part. All parts are characterized by the fact that fast iteration is needed in order to be successful.

Figure 1: The Loop

Organizational  characteristics  that  influence  the  LSM    

The research question is to find out whether the LSM is an appropriate method for

entrepreneurial use. As a sub question, it is taken into consideration if there is any difference between the implementation of the LSM between the startup and the corporate company. This difference is described by Buckland, Hatche and Birkinshaw (2003) as the ‘venture paradox’. Elements explained in this framework are taken from the venture paradox and help in

answering the sub question. Eric Ries (2011) states that an entrepreneur in the corporate company is called an intrapreneur. Other researchers support this statement. Koiranen (1994) expands on this by saying that the responsibility for innovation is a crucial characteristic for a good intrapreneur. Flexibility (Korainen & Pohjansaari, 1994), risk-taking, autonomy and

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competitive spirit (Antoncic et al., 2003) are all desired characteristics for an intrapreneur. If we compare this to the previous description of an entrepreneur, it may be concluded that an intrapreneur has similar characteristics. However, both types act in different environments. So in order to answer the research question, an explanation is needed to explain the difference in organizational characteristics.

There exist many differences between corporate companies and startups. While there are many differences listed, the three most important organizational differences are: financial freedom, freedom of making mistakes and taking responsibility.

Financial Possibilities

First of all there are various financial possibilities that an entrepreneur can explore in a corporate company or a startup company. Smith and Watts (1992) state that a corporate company can be easily financed, as oppose to financing a startup. This is a result of a corporate company having more potential financial resources. Skinner (1993) states that the more financial assets a corporate company has, the more it is incentivized to invest in potential new opportunities. On the other hand startups have a limited amount of potential financial resources. From this the conclusion can be drawn that there is more financial freedom for an intrapreneur than an entrepreneur.

Freedom of Making Mistakes

The culture of a company influences its contribution to innovation (Martins & Terblanche, 2003). According to Ries (2011), having the space to make mistakes is a requirement for innovation. Supporting creativity means supporting alternative solutions. Thus within the corporate company, a supporting culture is desired.

Responsibility

It is generally assumed are of a larger size, determined by the number of its employees. The larger the size, the greater the responsibility the company has to its employees, leading to multiple layers of management (Buckland et al., 2003). A negative consequence of this corporate structure is the possibility of employees escaping their responsibility. This lies in contrast with a startup, which consists of a small team directly responsible for the initiation of the startup.

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Summery  of  the  theory  

The foundations of the LSM theory are found within the theory of entrepreneurship. By describing an entrepreneur as a person who is willing to take risks and persevere, the theory focuses on its ability to succeed in creating an organization. This is combined with the idea of agile development, which finds out what your customers want by working together with them. Furthermore lean thinking, which has the characteristics of eliminating all waste, streamlines the process of the LSM.

These foundations together lead to the LSM, which consist of these important elements: getting out of the building, the preserve or pivot decision, fast iteration, validated learning and the MVP. It is important to understand that all these elements in this model are mutually dependent.

To add to this, organizational differences are highlighted between corporate and startup companies that aim to adopt the LSM. Central themes in declaring organizational differences are the freedom of making mistakes, taking responsibility and financial opportunities.

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3 Methodology

Participants    

As stated in the introduction, this research is conducted to find out whether the LSM is good method to use for entrepreneurs. In order to conduct accurate research, it is required that all participants are familiar with the LSM. All participants were selected on the criteria that they have a connection with the LSM in both a startup and a corporate environment. The

connection is that the participants have working experience in both types of organizations. The amount of experience had working with both corporate and startup companies, is not an important factor within this research. The scope of this research is set at an industry level, which includes both business-to-business and business-to-consumer companies. The aim is to conduct interviews with five different companies.

The participants will be selected through several channels. First of all I have made use of my personal network and beyond. This included my thesis supervisor, family, friends and

colleagues. Moreover I contacted the Lean Startup Community within Amsterdam to gain access to companies that use the LSM.

In this research, interviews were performed in Dutch. To retain the meaning of the statements made by the participants in this research, quotes are not translated into English.

All participants in this research are located in the Netherlands. Four of the participants are located in Amsterdam, and one is located in Delft.

A handout will be given to participants to inform them of the aim of the research, with the option to choose to participate. Sent in the form of an e-mail, there will be a brief explanation about the nature of the research and the requirements of taking part in it. (Saunders et al., 2007)

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Data  collection  

Empirical qualitative research will be conducted in order to answer the research question. This means the research will be an observation and a measurement of phenomena that will derive knowledge from actual experience rather than from theory or assumption

(www.libraries.psu.edu). Qualitative research as a methodological choice was made in order to ensure that the results would explain the social phenomena between these two different types of companies (Saunders, Lewis & Thornhill, 2007).

Case study is as follows: ‘research strategy that involves the empirical investigation of a particular contemporary phenomenon within its real-life context’ (Saunders et al., 2007; Eisenhardt, 1989; Yin, 1994). A case study is particularly suitable for research questions that are of a how/why-character (Bryman & Bell, 2007) and do not require the control of

behavioral events and instead focuses on contemporary ones (Yin, 2009). A case study is therefore an appropriate research design where large amounts of data are collected to provide a deeper understanding of challenges associated with the LSM (Gustafsson & Ovillberg, 2012).

The main advantage of a case study is the in-depth understanding it provides of the

phenomenon (Eisenhardt & Graebner, 2007). The disadvantage here is the fact this type of research is time consuming and is hard to generalize. Moreover there is a concern regarding the scientific generalization of this type of research. Case studies can lose focus as a result of theories becoming too convoluted, contributed furthermore by too much data (Eisenhardt, 1989; Gustafsson & Ovillberg, 2012).

Due to time constraints, this will be a cross-sectional study. Each interview will be a snapshot of present conditions within each respective company. The disadvantage of this is that future research in the same companies could produce different results (Saunders et. al., 2007). However conducting this type of research is a realistic way to provide insight into the use of the LSM models by companies and allows the researcher to include as many possible outcomes into account (Saunders et al., 2007).

Making use of semi-structured interviews will provide the data needed. This gives the opportunity to further build on responses and achieve a more in-depth insight (Cooper &

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Schindler, 2008 in Saunders et al., 2007). In order to gain further understanding, open questions will be used during the interviews (Saunders et al., 2007).

The semi-structured interview will be done through a face-to-face conversation. According to Wengraf (2001) this type of communication is more spontaneous and provides a level of ambiance to the interview. This requires a high amount of attention given by the interviewer because of the interactive nature of the conversation. In order to make the participant feel confortable, the interview will take place in their work environment. The structure of the interview will start with open, general question. Once the participant is engaged, probing questions will be used to explore responses regarding the research topic (Saunders et al., 2007).

The interview, which will last for about 30 minutes, will be entirely recorded. It is important during the interview however, to take notes. Firstly, all questions have to be answered. Secondly precautions are needed in case of a malfunctioning recorder and lastly, physical responses should be taken into account (Opdenakker, 2006). Unfortunately the downside of conducting face-to-face interviews is the that transcribing the interviews is time consuming (Bryman & Alan, 2001).

Data  analysis    

Once the interviews are performed, the data collected will provide quotes that will support the findings. The program that will be used to analyze and structure the data is NVivo. A deductive approach will be used to determine the framework regarding the LSM from the data (Yin, 2009). However, the connection between the type of organization and the

effectiveness of the LSM has never been researched before. Taking this into consideration, inductive characteristics will be used to expand on existing theories (Glaser and Strauss, 1967 in Saunders et al., 2007; Yin, 2009).

Initially there will be two of two interviews given, with a final interview providing a follow up. Each round will provide insights on the importance of the LSM to both types of

companies. After each round, the data obtained will be analyzed through the use of memos (Saunders et al., 2007). After each round, adjustments will be made to link the existing concepts to the newly found data (Glaser, 1978 in Saunders et al., 2007). These memos have

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the advantage of giving an overview of all concepts and ensuring that nothing is left out (Saunder et al., 2007). Miles and Huberman (1994, in Saunders et al., 2007) state that in order to give more structure, it might be useful to note the date and provide cross-references in the memos. Questions can be altered and improved upon after analyzing the results the previous round. The final round of interviews will complete the definitions of the concepts conceived. These concepts will be the variables used in answering the research questions.

Reliability    

The extent, to which this method of data collection will field consistent findings, depends on the transparency of how the research is gathered (Saunders et al., 2007). In order to avoid issues with reliability, the interviews will not be restrained by time and will take place within a safe and closed environment in which the participant feels comfortable. Preparation for the interview is vital, and a complete understanding of the concepts explored is necessary to ensure that the interview is successfully done. After each interview, the data will be checked for its clarity and relation to the research question.

   

Validity

Saunders et al. (2007) explains validity as “The extent to which data collection method accurately measure what they intended to measure.” In order to ensure content validity, we use careful definitions supported by extensive literature research (Saunders et al., 2007). Also the number of interviews conducted provides enough depth and understanding to the research.

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4 Results

Five interviews, six hours of recordings and 37 pages of transcription are the outcome of this qualitative research. These interviews supplied 45 codes, which are put into 15 categories and finally four themes, done by generalize all codes. In doing this research Nvivo was used to analyze the data and write down memos and annotations.

Codes  

45  

15  

Categories  

4  

Themes  

4  hours  

of  

interview

s

37  

pages  of  

transcip

tion

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The findings of the interviews all together give an overload of information. To make all this information more synoptic, the most important information is clustered into three main subjects. The first part is explaining what the consequences are of using the LSM. The second part will explain if all characteristics of the LSM are recognized and fully implemented in both types of companies. The last part is an explanation of the difference between the corporate company and the startup company. This will result in an advice, which is given in the conclusion.

To give more in-depth insights, schedules are used to show all relationships between variables. The ultimate goal is to understand how these variables influence the efficiency of the LSM (within the startup and corporate environment).

 

4.1 Implications of the use of the LSM.

This part will provide implications, experienced by the participants, as a consequence of the use of the LSM. There are both positive and negative consequences, which will be described. The sub conclusion of this part will be a comparison between the all consequences.

 

Positive  implications  of  the  use  of  LSM    

Participants see a lot of benefits in using the LSM. The next part is a description of the positive implications of the use of the LSM. These implications are applicable to both the corporate and the startup company. This part helps us to understand what the motivations are of using the LSM. These positive implications help answering the research question by exposing the benefits of using this method.

Confidence in making mistakes

The first implication of using the LSM is providing entrepreneurs the confidence to make mistakes. Classical entrepreneurship requires the product to be perfect before launching, and therefor gives entrepreneurs no space in making mistakes. The LSM however, gives

confidence in making mistakes by saying you should launch your product (MVP) as soon as possible. Changes can be made afterwards when needed.

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“Ten eerste het fouten maken en constant bijsturen”. – Cesar Zijp

This is a positive impact because there is no entrepreneur who does not make mistakes. They even make mistakes twice, because of enthusiasm. The LSM gives the lucidity to its users that making mistakes is part of the process of being an entrepreneur. The fact that the LSM gives this lucidity makes its users confident in making mistakes.

“Een ezel stoot zich in het algemeen niet meerdere keren aan dezelfde steen. Maar een ondernemer wel”. – Philip van Traa

“Kan je niet omheen, je maakt nieuwe fouten mee, je leert elke dag wel.” – Philip van Traa

“Ja en je moet ook een beetje op je bek gaan, ik heb in het begin alle bedrijven lopen afzeiken die een abonnement-structuur hadden”. - Cesar Zijp

“Want dat is wat mensen verwachten, dus toen hebben we kunnen zeggen van hee we zaten er wel gewoon naast en dat moeten we aanpassen. Dat hebben we ook gedaan, dat is wel

moeilijk maar je moet je ego inslikken en toegeven dat je fout zat”. - Cesar Zijp

“Het tweede is heel veel bluffen, daar komt Lean echt naar binnen. Wij hebben constant ons pakket aangepast aan klanten”. - Cesar Zijp

The consequence of this boost of confidence is the opportunity for entrepreneurs to transpose their boundaries, which is necessary to grow.

“Maar volmondig in een intake gesprek waar wij soms tegenover vier a vijf mensen zitten en zeggen ja dat gaan we doen dat is wel moeilijk jat is nog moeilijker zegt ja en je compagnon krabbelt terug”. – Cesar Zijp

“Dus die validatie geeft een stukje richting en zekerheid en een risicobeperking.” – Lonneke Boonzaaijer

“Ja dat is wel gegroeid ja. Sinds ik ermee begonnen ben, met Nerdalize. En heeft wel LSM aan bijgedragen dat dat eigenlijk is wat je doet. Die onzekerheden wegnemen uit je bedrijf en

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dat op een structureerde manier doen. Doordat je erna ook kunt aantonen dit was onzekerheid; zo aangepakt; we denken nu overtuigende argumenten hebben gevonden waarom niemand er zich zorgen over hoeft te maken”. – Mathijs de Meijer.

Organizational structure

Bringing organizational structure is another positive implication of the LSM. As stated in the theoretical framework, entrepreneurs are doing new things, of which the outcome is unknown. Bringing structure to this is essential for entrepreneurs to grow their business, because as stated by the one of the participants: ‘a good product on itself won’t make you grow’.

“Ten tweede een zaak hebben is ook een wetenschap op zich dus uhm in de Lean zie je dat alleen een product hebben het niet red”. – Cesar Zijp

“Weetje Lean Startup is gewoon een duidelijk organisatie”. – Florian Brunsting

“Het managen van je bedrijf”. – Cesar Zijp

“Maar het is mijn bevinding van vijf jaar … vijf jaar rolocoasteren nu met wat meer structuur erin en met meer een gericht doel”. – Philip van Traa

“Ik denk dat ik dat wel uit de het boek heb geleerd het aanmodderen gaat hem niet worden”. – Philip van Traa

The validation process the method contains brings structure to the organization. This helps its users finding out whether they are on the right track. This is helpful for its user, who operates in an uncertain environment.

“Dus die validatie geeft een stukje richting en zekerheid en een risicobeperking”. – Lonekke Boonzaaijer

“Nou de voordelen zijn dus dat je van tevoren al een vrij goed beeld krijgt van of je op de goede weg zit”. – Lonneke Boonzaaijer

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The self-reflection within the validation process, provide its users to become more self-critical.

“Continue jezelf een spiegel voorhouden. Kritisch naar jezelf zijn, wat ik net zeg kritisch naar jezelf, ik geloof soms te lang in dingen”. – Philip van Traa

“Je hebt het geprobeerd en als je alsnog het product in de markt wil zetten, het wordt niks, dan hoop ik dat je met Lean ook leert dat je met elimineren leert”. – Philip van Traa

Speed and costs of learning

The speed of learning is closely related to the fact you dare to make mistakes and being flexible at the same time. From the moment you release your MVP the aim is to learn validated lessons as quickly as possible. This is achieved by the fast interaction with your customers. Because your product needs minimum requirements, these products can be launched and features can be adjusted quickly.

“Dat snel leren gaat hand in hand met fouten durven maken”. – Cesar Zijp

“Dus hoe sneller je er achter komt wat wel of niet werkt, hoe beter. Dus ja, dat is het voor mij eigenlijk”. – Florian Brunsting

“Je kan er in principe in een weekend achter komen”. – Lonekke Boonzaaijer

“Versneld leren”. – Florian Brunsting

“Zo komen we er continue achter wat er wel werkt en wat er niet werkt. Zo is het een tijdrovend proces, maar het gaat sneller dan proberen bedenken van te voren hoe het in elkaar steekt. Dat werkt niet”. – Philip van Traa

“Het is meer gewoon een tool om er voor te zorgen dat je er sneller achter komt als het niet werkt”. – Florian Brunsting

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“En dit is een methode waardoor je vrij kosteloos en snel een bepaald idee of concept kan valideren”. – Lonneke Boonzaaijer

Here you see the combination of speed and cost: the LSM is described as a fast and therefore a cost-efficient way of doing business. Fast validation means being more cost-efficient. The cost of learning is obvious dependent from the business you are in. But no matter in which business you are, all participants agrees on the fact that this method is cheaper than the old method for which high investments are required.

“Daar is niet verder heel veel tijd of moeite of wat dan ook in gaan zitten. Eh… Niet een app. gebouwd of wat dan ook. Kantoor gekocht of gehuurd, mensen aangenomen bezorgers enso”. – Florian Brunsting

“Natuurlijk Lean was een optie waar je weinig resources voor nodig hebt, dus een logische optie”. – Florian Brunsting

The consequence of the lower costs is being less dependent from external financers from starting your business. Especially for startups, which have more financial limitations, this element of the LSM can be beneficial.

“Die mensen hebben meestal geen geld, helemaal in deze tijden waarin het moeilijk is om financiering op te halen bijvoorbeeld, investeerders vragen altijd om een proefconcept. En als je dat voor alle onzekerheden hebt weggehaald kan je naar een investeerder toe”. – Mathijs de Meijer.

Cautions  with  the  use  of  LSM.    

This part states warnings with the use of the LSM. Participants were asked if there are any negative consequences. What was found is not a critique on the method, but a warning to use this method with caution. Moreover there are arguments provided which support these warnings. All the arguments are applicable to both corporate and startup companies. The conclusion from this part is that the users of this method should remain careful and critical at all times, complete reliance on this method can be dangerous.

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LSM as an excuse for making mistakes.

As stated in the theoretical framework, one of the principles of the LSM is learning validated lessons. To do so, there needs to be space in making mistakes. However, this brings

difficulties along. What participants are experiencing is that there is only a thin line between skimping and making mistakes to actually learn a validated lesson. When are you learning? When are you doing something, which is not learning anymore?

“De kritiek die ik wel heb is dat Lean als een excuus wordt gebruikt voor onduidelijkheid”. – Cesar Zijp.

“Ja we zijn nog aan het stoeien met de concepten. Ik vind ik dat je je verantwoordelijkheid moet nemen voor je acties”. – Cesar Zijp

The lack of guidelines provided by the LSM on this topic, makes it extra hard. A consequence is the possibility for not taking your responsibility for actions taken, by calling them ‘learning’ while you are just skimping. In this sense LSM is being used as an excuse for not taking

responsibility. Participants admit they become insecure because of the absence of a strict guideline.

“Daar is natuurlijk ook veel kritiek op, dat mensen niet weten van oké 3/10 is dat genoeg, of moet het 9/10 zijn en dan is altijd het antwoord: ja dat hangt er vanaf”. – Florian Brunsting.

“Maar het moet wel, ik denk dat ik dat wel uit de het boek heb geleerd het aanmodderen gaat hem niet worden. Dat je aan de andere kant ook aan het aanmodderen om je vorm te vinden om daarna openlijk je koers te kunnen maken vind ik een andere, je hebt aanmodderen met het leren en omhoog te gaan en het aanmodderen wat je nog 10 jaar nog door kan blijven gaan maar het levert je niets op. De truc is om het heel secuur te kijken van welke welk welke niet”. – Philip van Traa

Not a complete method.

The participants use the LSM differently than the theory states it should. Ries claims it to be a method, which can build up an entire startup. No participant, however, uses it like this.

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“We gebruiken er onderdelen uit”. – Lonneke Boonzaaijer

“Ik zie het echt als een tool, in een toolboom en als je bezig bent met een eigen bedrijf op te zetten of juist een nieuw project of wat dan ook”. – Florian Brunsting

“Met een kleiner bedrijf is de LSM een tool”. – Cesar Zijp

A reason for not fully using this method is the fear to exclude other methods, which can generate new perspectives. By focusing on one method you limit your own opportunities, which is seen as risk enlarging. Being aware of the existence of other methods, gives the opportunity to development.

“Als je op 1 methode gokt, ben je blind voor andere dingen en dat maakt dat maakt je het risico veel groter. Dan voel je je niet meer wat volgens een andere methode ... je kan een business plan maken op 1 manier, je kan m op canvas maken. Wil niet zeggen dat als je het ene volgt dat je nooit meer naar iets anders hoeft te kijken. Hou altijd je ogen en oren open”. – Philip van Traa

“Wij gebruiken naast Lean Startup, de Lean Canvas ook op dit Business Model Canvas dat je van … oké wat is daarmee het volledige plaatje, value proposition canvas. Dat zijn wel dingen die je denk ik moet kunnen inzetten en moet kunnen begrijpen om er maximale waarde uit te halen”. – Philip van Traa

“Er is nu nog wel een nieuwe methode die ik met terugwerkende kracht aan het toepassen ben, dat is Jevelin Board”. – Lonekke Boonzaaijer

A potential pitfall, for which participants warn, is thought ‘if you use this method, everything will be fine’. This awareness, that the LSM is only a tool and every entrepreneur needs to be critical at all times, is there among all participants. As Philip van Traa states: ‘LSM means we are learning. We are making mistakes. We are not there yet, but we hope to get there more quickly’.

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“En wat je zegt een soort heilige graal, van als je je daar mee bezig houdt gaat het automatisch goed, dingen kunnen fout gaan”. – Cesar Zijp

“Volgens de lean methode wil toch niet zeggen dat het altijd maar goed is. Het is helemaal niet allemaal goed, het geeft aan: we zijn aan het leren en hoe we leren het geeft ook juist aan dat je fouten aan het maken bent. Dat je er nog niet bent, dat je hoop dat daardoor een

versnelling komt, maar het is ook niet een garantie. Het is allemaal maar een methode.” – Philip van Traa

Devaluation.

As it is with everything what is getting popular, the value of the term LSM will reduce once there are people who misuse its brand name. When the LSM is seen as something of great value, more people will be interested in using it to add value to their business. There is a danger in this development: with the term LSM getting more popular, devaluation of the term is possible, as people are starting to use it because of its good name.

“Ik denk zelf dat het een soort populaire term wordt, (niet Aimforthemoon) maar bedrijven die cool proberen te doen”. – Cesar Zijp

As one participant commented: be aware of Leanwashing! In which companies claim to be Lean, but in reality only use it as marketing tool.

“Leanwashing!” – Philip van Traa

Conclusion of the implications of the LSM

The main conclusion of this part is that the use of the LSM is being experienced as rather positive. The most positive implications of the method are the confidence it provides, the organizational structure, which is brought by this method, and the fast and therefore cheap validated lessons you learn. There is no sound critique on the method. However, participants do have some warnings about the use of this method. First of all the lack of guidance by the method, which results in an excuse for making mistakes. Moreover the LSM is seen as a tool

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(and not a complete method), which should be combined with other tools. And last of all the warning of ‘leanwashing’, which means to use the term as a marketing objective.

4.2 The elements within the LSM

This part will clarify the elements of the LSM, which are recognized as important in practice. Additionally it will become clear whether both types of companies are capable of fully implementing the method. There shall be a distinction between the corporate and the startup company, based on the “venture paradox” from theoretical framework. This will help in answering the sub-question whether there is a difference in the efficiency between both types of companies. It becomes vibrant that there is a difference between the two types of

companies. Reasons for this difference will be provided in the next part, where there is a comparison of the different organizational structures and its influence on the method. Preserve  or  pivot  

The preserve of pivot decision is explained in the theoretical framework as ‘testing your hypotheses, based on the outcome of this hypotheses whether to preserve or pivot’. Asking the participants if they use this element form the LSM every participants answers positive. They find it useful to use this element while it provides the opportunity to be self-reflective and gives guidance in growing your business. This is both applicable to the startup company and the corporate company.

“Continue jezelf een spiegel voorhouden. Kritisch naar jezelf zijn, wat ik net zeg kritisch naar jezelf, ik geloof soms te lang in dingen”. – Philip van Traa

A critique however, is that this element is more applicable to software companies, than it is to non-software companies.

“Het tweede wat mij opviel eraan was dat me deze methode heel handig lijkt als je een software startup hebt. Als je een app maakt. Dan zie ik veel manieren om automatisch hypotheses te testen”. – Mathijs de Meijer.

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How this method exactly is being used, differs per type of company. Where the corporate company bases this decision mainly on their monthly budget, the startup company uses their ‘gut-feeling’ to make this judgment. In this the warning ‘not having an exact guideline to make the decision based on hard fact’ is applicable.

“Met Aimforthemoon hebben we heel duidelijk het budget per week opgedeeld op hun verzoek, en per week een evaluatie. Aan het einde van het project verwaterd dit en is er meer

vertrouwen van beide kanten. En de eerste drie a vier weken hebben we gewoon gemeet. Toen we met corporate bezig waren: dit vinden we leuk, dit moet anders, volgende week praten we verder. Toen was wel duidelijk zo’n evaluatie moment”. – Cesar Zijp.

“Nee dat was eigenlijk op basis van een uitgebreid financiële forecast waarin we zagen dat joh als we die servers bij mensen thuis plaatsen dan koelen ze met lucht, dan moeten we ze in de zomer uitzetten”.- Mathijs de Meijer.

“Dat was heel erg het maandelijkse bedrag, hee toen we klein waren was het leuk om tegenaan te trappen dat grote bedrijven abonnementen aanbieden maar nu we zelf grotere klanten krijgen dan moeten het onderdeel van ons worden, want dan kunnen we grotere klanten binnen halen, toen moesten we echt 180 graden draaien omdraaien om te zeggen van dit gaan we nu schrappen”. – Cesar Zijp

“Nou ja uh… Idealiter zeg je van tevoren wat je experiment is en bij welke resultaten je tevreden bent. Daar is natuurlijk ook veel kritiek op, dat mensen niet weten van oké 3/10 is dat genoeg, of moet het 9/10 zijn en dan is altijd het antwoord ja dat hangt er vanaf. Wat je zelf wil. En uh… Ja voor ons hebben wij dat niet op die manier helemaal afgebakend, van dat moet binnen een maand zoveel aanmeldingen hebben of mensen moeten het zo vaak gebruiken anders dan anders gaan we er mee door. Uh… gaan we er niet mee door of stappen we naar een ander model. Dus dat hebben wij persoonlijk niet gedaan. Dus wij doen het denk ik iets meer intuïtief”. – Florian Brunsting

It can be concluded that both types of companies use the ‘preserve or pivot’ element from the LSM. But the startup companies experience the element as rather unclear caused by the lack of guidance provided.

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MVP    

The idea of the Minimum Viable Product (MVP) is that the entrepreneur launches its product, having only marginal product characteristics. In this element lies a significant difference between the startup and the corporate company. Within the startup company the MVP may be considered as valuable, but due to the risk of damaging your image, corporate companies are not fund of using this element from the LSM.

Imago-schade – Lonekke Boonzaaijer.

“Ja als ik kijk … met Philips opgetrokken, en die durfde helemaal geen fouten te maken.” – Philip van Traa

While in the startup companies this element is being seen as valuable element to test the products and the related assumptions.

“Ja enorm, ons eerste prototype was een houten doos met daarin een consumenten pc

gemeubeld die lucht opwarmde voor je. Dat was om te laten zien en te testen hoe valt dat idee, die was met de hand gemaakt en op een gegeven moment zijn we overgestapt op een andere koeltechniek gebaseerd op vloeistof”. – Mathijs de Meijer

“En gewoon te kijken hoeveel mensen het nu uiteindelijk echt gaan gebruiken”. – Florian Brunsting

“In het begin moetje gewoon eerst kijken of je, of het wel een probleem is. En als je dat probleem gevonden hebt, ja oplossingen ervoor, kan je daarna nog verder gaan

optimaliseren”. – Florian Brunsting

Some participants even only had an idea, and launched it, pretending, as it already exists. In this way they tested their idea even for free.

“Ja precies, we hebben het gewoon gelanceerd alsof het al echt … alsof het al echt bestond. Maar het was eigenlijk nog niet zo heel veel. Het was een landing page en een formulier waarop mensen zich konden aanmelden”. – Florian Brunsting

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These adjustments made to the MVP are done by listening to your customers, one of the most important techniques provided by the LSM and used by all. A reason for this importance is the need for the constant development of the product.

“Voordat we een technisch product hadden we een samenwerking met MPK, een

onderzoeksbureau die ook allerlei klantenonderzoeken doen. Dan kan je met een focusgroep in een ruimte worden gestopt. En dan leiden zij het gesprek zo dat je kan achterhalen van joh ‘waar zit dat probleem nou’. En niet alleen wat vinden mensen belangrijk? Wat zijn hun kern waarden? Hoe gaan ze met warmtesystemen om? Wat voor gedrag hebben ze nou? Daar hebben we veel tijd aan besteed om het goed in kaart te brengen voordat we het product zijn gaan bouwen. Zodat we niet domme beginnersfouten aan het maken zijn waarbij we mensen in de weg zaten”. – Mathijs de Meijer.

“Ons product is eigenlijk dat je je niet meer echt druk hoeft te maken over alles op het internet. Ja dat Minimum Viable Product is de dienst op zichzelf en het Lean idee is dat we met iedere klant passen we wel iets aan”. – Cesar Zijp

“Dus zo hebben we op grond van alle gesprekken die we met onze klanten voeren, al die intake gesprekken, met een beetje bluf en een beetje lef hebben we langzaam ons pakket verandert”. – Cesar Zijp

“Ik denk ook dat je in deze fase in een zekere mate altijd in een bèta blijft zitten. Je zult nooit echt een finaal eindproduct hebben, omdat het iets is dat te snel ontwikkeld. Dus je moet dit constant blijven toepassen, het is een doorlopend proces”. – Lonneke Boonzaaijer

From this data the conclusion can be drawn that the MVP is seen as effective within the startup company. Corporate companies, however, have less incentive to use this element because of the potential damage in their image.

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Validated  lesson    

In the theoretical framework, validated learning is described as the process of learning what adds and what does not add value to the entire organization. Both types of companies

recognize its usefulness and implement this element. There was no difference found between the two types of companies on this element. Participants did mention however new techniques to learn these validated lessons. Only talking to your participants is being mentioned as a way to learn these validated lessons by Ries. This is also the most frequently mentioned technique by the participants.

“Afnemers zijn eigenlijk de bedrijven die de betrekken we er heel erg bij. Onder andere doordat Isabel al onze klanten interviewde. Wat vind je van ons, wat vind je van onze

concepten? Waar denk je dat het fout gaat? Wat vind je leuk? Wat niet, wat is goed? Wat kan beter?” – Philip van Traa

“Dus zo hebben we op grond van alle gesprekken die we met onze klanten voeren, al die intake gesprekken, met een beetje bluf en een beetje lef hebben we langzaam ons pakket verandert”. – Cesar Zijp

“Ja uh.. das de forecast die we hebben gedaan, dus veel mensen interviewen”. – Florian Brunsting

Another technique mentioned by participants is looking at similar products in the market.

“En de enige manier waarop je het zou kunnen valideren is door het kijken in de markt naar wat voor soort gelijke producten er zijn. Dus dat hebben we gedaan, daar hebben we ook heel veel uh… pagina’s in de vorm van een Facebook page en websites en offline ruilfeestjes. Dus je kan op die manier wel zien dat de behoefte daar dus zit”. – Lonneke Boonzaaijer

Also using the media for validation is a way for learning validated lessons.

“En dit hebben we, ja toen hebben we heel veel pers aangeschreven en gewoon dat eruit gestuurd om te kijken van of ze hier over zouden schrijven en of er dus een reactie op zou komen”. – Florian Brunsting

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Validated lessons are not only figuring out what works, it is also figuring what does not work. As Philip van Traa states: ‘we had a nice conversation, but it does not work for us. Because of this and this reason.’ That is a validated lesson, because this information can prevent them from making the same mistake in the future.

“Eergister gesprek met Baut gehad, daar hebben we een tafel, een kleine tafel staan. In het begin harstikke enthousiast. We kregen maandag een belletje, zeiden ze: ‘ja we stoppen ermee.’ Kan ik met zak en as gaan zitten.. maar wat heb ik eraan? Dan hoor ik dat, hebben we een harstikke leuk gesprek, maarja werkt niet bij ons. Deze reden en om die reden. Dat is belangrijke data, het moet niet alleen maar negatieve gesprekken te horen. Maar als je dat wel terug krijgt weet je dat je concept niet klopt. En dan mag ik terug naar de tekentafel en hem elimineren”. – Philip van Traa

“Nou daar hebben we dus twee rondes mee gedaan en daar kwam allemaal informatie uit, waaruit bleek dat we iets gemaakt hadden wat niet heel handig was”. – Lonneke Boonzaaijer

“Wij merkten dat twee a drie smaken werden gewoon vies gevonden”. – Philip van Traa

So it may be concluded that there is no significant difference in the element of learning validated lessons between the startup company and the corporate company. What can be concluded is that there are more techniques to learn validated lessons than the theory states there are.

Iterate  fast      

Fast iteration is one of most important elements from the LSM. The data tells us that fast iteration is desired, but not always possible. Here is a significant difference between the corporate and the startup company. Only startup companies seem to understand the crucial impact of this element within the model.

“Je kan er in principe in een weekend achter komen: oké hier moet ik mee doorgaan of hier moet ik mee stoppen of ik moet het anders gaan aanpakken”. – Lonneke Boonzaaijer .

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“Dat snel leren gaat hand in hand met fouten durven maken”. – Cesar Zijp

“Daar is niet verder heel veel tijd of moeite of wat dan ook in gaan zitten”. – Florian Brunsting

Corporate companies have more trouble with the fast iteration and seem not capable of implementing this element in the desired way.

“Het tempo is wel veel trager”. – Cesar Zijp

“Snel leren wordt semi-snel leren”.– Cesar Zijp

“Hoe inflexibeler en lastiger de methode te implementeren is. Omdat er dus altijd weer managementlagen tussen zitten”.– Lonekke Boonzaaijer

Getting  out  of  the  building  

It becomes obvious from interviews that getting out of the building is important in order to find a realistic problem, which needs to be solved. Inspiration in getting started as an entrepreneur is found outside the walls of your office. This element seems to be more applicable to the startup company than the corporate company. This is, however, possible because all the participants started their own company by being inspired. While getting particular assignments from the corporate company as they are being hired. So where the business idea comes from, within the corporate company is not known by the participants. Therefore no legitimate conclusion can be provided on the difference between the two types of companies. What can be stated is the importance of this function by means of quotes of the participants from their own startup company.

“Dus we zijn aan het experimenteren met verschillende dingen, maar een van de dingen die we nu aanbieden en ook waar we mee in het nieuws komen is eigenlijk de bezorging van je pakketje, wanneer je eigenlijk thuis bent. Dus mensen sturen hun pakketje naar ons toe en dan whatsappen wij ze, vragen we wanneer de bezorging uitkomt en dan kunnen ze zelf een datum en een tijdstip uitkiezen wanneer ze weten dat ze thuis zijn. Dan komen wij het langsbrengen”. – Florian Brunsting

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“Omdat het blijkbaar echt een pijnpunt is voor heel veel mensen, dat die pakketjes bezorging diensten irritant vinden. Dus daar kwam toen heel veel response op. Daardoor kwamen ook heel veel aanmeldingen, dus toen zijn we eigenlijk van de een op de andere dag al die pakketjes gaan bezorgen”.- Florian Brunsting

“Weten waar je eten vandaan komt, hoe wordt het gemaakt, zelfkweek noem het maar op. Het bedacht omdat ik altijd tuinen aanlegde, en omdat ik meer en meer de vraag kreeg: ‘hee kunnen we geen eetbare planten doen?’ Vind ik zo leuk vind ik zo lekker, wil ik meer van weten. Daar is het allemaal ontstaan”. – Philip van Traa.

“Dus hoe wij het hebben gedaan: we kwamen met het idee en toen hebben we zelf eigenlijk, met wat verschillende tools een eigen eenvoudige website in elkaar gezet. Met een formulier waar mensen, gewoon zich aan konden melden. En dit hebben we, ja toen hebben we heel veel pers aangeschreven en gewoon dat eruit gestuurd om te kijken van of ze hier over zouden schrijven en of er dus een reactie op zou komen. Daarom schreven heel veel mensen uiteindelijk over, dat kan je ook op onze site zien. Dus daar hebben we een paar van die opgezet. Omdat het blijkbaar echt een pijnpunt is voor heel veel mensen, dat die pakketjes bezorging diensten irritant vinden. Dus daar kwam toen heel veel response op”. – Florian Brunsting

“Originele idee was toen ik samen met Boaz, een van onze co-founders in een huis woonde, toen studeerde ik nog. Toen heeft hij tijdens de verbouwing van ons huis de thermostaat van de muur gesloopt. Die was niet meer te fixen, toen werd het ijskoud. Het was midden in de winter. Op een gegeven moment zat ik onder een deken met mijn laptop een spelletje te spelen, om het nog een beetje warm te houden. Toen was het idee geboren, joh staan er niet data centra vol met servers warmte te produceren? Terwijl wij hier zitten te vernikkelen zouden we niet die servers in huis moeten plaatsen. Vanaf daar zijn we met de rekenmachine en pen en papier aan de slag gegaan om te kijken of dat niet alleen in energetische zin maar ook economische zin te halen was. En elke keer dat we daar dieper in doken bleek het idee nog steeds een goed idee. Nog steeds rendabel. Op een gegeven moment de knoop doorgehakt, want op papier ziet het er zo goed uit. Als we dit niet doen dan zijn we sowieso idioten”. – Mathijs de Meijer.

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There can be no conclusion drawn, regarding the difference between the corporate and the startup company, from the element of ‘getting out of the building’. Participants are not capable of answer motivational questions regarding the corporate company. What can be concluded is that the ‘getting out of the building’ element is crucial for the start of a startup company.

What can be concluded from this part is that the element ‘preserve or pivot’ is useful for both types of companies. However, the startup companies experience the element as unclear, due the lack of guidance provided by the method. Only within the startup company, the MVP is seen as valuable elements in the development of the organization. Corporate companies see this element as a potential danger for damaging their image. Validated lessons are important in both types of companies. Conspicuous is the fact that participants have more techniques for learning these validated lessons that described by the theory. The most striking conclusion is that fast iteration is essential for this method to succeed, but corporate companies are not capable of doing so. Since participants are not able to answer motivational questions

regarding the corporate company, no conclusion can be drawn the element of ‘getting out of the building’.

4.3 How organizational characteristics influence the LSM.

As we saw in the previous chapter, there are some reasons why the implementation of the LSM seems to be more effective within the startup company than it is in the corporate company. These reasons can be explained by the organizational differences, of which the most important elements are explained in the theoretical framework. This part shall test whether the theory provided on organizational differences regarding the financial possibilities, responsibility and the freedom of making mistakes are true.

This part helps in answering the question: ‘what are the arguments for differences between the implementation of the LSM between corporate and startup companies?’

   

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Financial  freedom      

A first major influence of working in a corporate environment was the financial freedom it offers. The experience is that a corporate has more money to invest, which provides freedom to test your ideas. There is, within the corporate, a minor chance that a test is unfinished due to lack of money. Startups however, have less financial freedom for making mistakes. One of the reasons corporates are willing to put more money (and therefore time) in a project is their experience within the field. They have the understanding that the first version of a product is often not even close to the final version of the product. To get to the final version, there needs to be financial freedom.

A consequence of financial freedom is the freedom to think bigger. It gives participants the opportunity to think what could be of added value and improve their products or services.

“Maar wat je merkt bij corporate … dat komt doordat er gewoon simpel gezegd, we

zwemmen in het geld. Met een kleine startup die persoonlijk is… Ik werk met een startup die persoonlijk wordt gefinancierd. Dan zegt die niet, hee hier heb je 2000 euro, ga maar wat fotoshoppen en kijk maar waar je uitkomt. Dat heb je dan niet. Dus wat voordeel is bij Aimforthemoon, als een groot achter je staat dan die lachen zich dood van 5000 – 10000 euro. Het is leuk om een beetje te oriënteren. Dan is ook ruimte om te gaan oriënteren”. – Cesar Zijp

“Dat is best wel raar maar grotere bedrijven hebben daar meer ervaring mee en zien wel de waardering erin en die hebben misschien ervaring dat de eerste versie amper wat te maken heeft met de uiteindelijke versie”. – Cesar Zijp

“Maar bij corporaties weten we dat er ruimte is, als er dan een offerte is doen we bij wijze van spreken alles x 2,5 omdat we inschatten dat we alles twee en een half keer moeten doen”. – Cesar Zijp

“Dus zeker nu we genoeg geld hebben kunnen we veel ruimer denken, ‘hee laten we eens een training volgen over … en kijken of we daar wat mee kunnen.’ Met die financiële vrijheid kunnen wij ruimer denken en meer gaan kijken om ons heen”. – Cesar Zijp

(38)

Startups however, have less financial freedom for making mistakes.

“En als je je eigen geld moet maken, dan zie je iedere euro branden voordat die de deur uit gaat”. – Cesar Zijp

As a consequence, most of the startups do not have the financial luxury to spend all of their time on their own startup. They combine their jobs. One of the negative consequences of not having the financial freedom is the fact that it is sometimes expensive to generate a first user crowd.

“Het nog lastig is om een first-users crowd te genereren”. – Lonneke Boonzaaijer

“Kijk het zit zeg maar zo: wij werken allemaal al fulltime om dit te kunnen doen in de avonduren en de weekenden. Dus om de gehele methode toe te passen is dat vrij lastig als je niet fulltime beschikbaar bent”. – Lonneke Boonzaaijer

Regarding financial freedom, it may be concluded that the corporate company has an advantage over the startup company regarding the financial freedom it brings. The financial freedom of corporate company gives the opportunity to make more mistakes, and therefor gives more financial opportunities to learn validated lessons. However, they weight of this financial advantage is minor within the LSM. As participants state that there is only a minimum of finance required to start using the LSM.

“Je kan er in principe in een weekend achter komen”. – Lonneke Boonzaaijer.

The conclusion from this part is the fact that corporate company indeed has more financial freedom. The question remains however what the exact influence of this conclusion is. The theory of the LSM finds its strengths above all in the low implementation costs. Therefore it can be stated that less financial freedom makes it harder for the startup company to implement the LSM, but not impossible.

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