For example, Denoo et al. 2018) found that startups with a broader customer portfolio engage in more business model changes and larger changes. Previous research has shown that business model innovation leads to improved startup progress (Denoo et al., 2018) and performance (Cucculelli & Bettinelli, 2015; Zott & Amit, 2007). What activities, insights and narratives do entrepreneurs use throughout the business model innovation process.
Future research can build on the literature on learning and experimentation (Achtenhagen et al., 2013; Denoo et al., 2018; Foss & Saebi, 2017; McGrath, 2010) and structural and cognitive impressions (Snihur & Zott, 2019) to gain a deeper understanding of the antecedents of business model innovation. Interestingly, from a cognitive perspective, Martins et al. 2015) suggested how analogical reasoning and conceptual combinations can lead to business model innovation.
Building Block 4: Building Minimum Viable Products
Future research could explore the extent to which founders apply imagination and discipline to thought experiments to test a hypothesis of their startup's business model and the effects on their subsequent cognitions (including the formation of subsequent activities of research and development of the beginning story over time). Indeed, the shared dimension may require research from a cognitive perspective regarding a shared or shared mental model, and the understanding dimension may require research from a narrative perspective in the form of sense making from a founder to a focal stakeholder (ie, using an MVP to tell the audience a believable story of a potential opportunity). Thus, future research will need to look at combinations of a prototype's tangibility, pervasiveness, and comprehensibility to determine its effectiveness as an MVP for different audiences.
There are ample opportunities for future research to explore how an MVP functions as a boundary object by providing (a) a shared language for two parties to represent their knowledge to each other, (b) a means by which both parties can learn their differences know. and (c) a process whereby they collectively transform their knowledge (Carlile, 2002) in a way that enhances learning about the focal startup. That is, instead of (or in addition to) building an MVP as a boundary object for sharing, transferring, and transforming knowledge, a founder can use his or her business model itself as a boundary object. For example, a business model can function as a market instrument – “the material and discursive assemblage that intervenes in the construction of markets” (Muniesa et al., 2007).
In other words, a business model can represent an object that is flexible in its mix of narratives to communicate with heterogeneous stakeholders, but robust enough to represent a shared source of information and knowledge across boundaries (Latour, 1987; Star & Griesemer , 1989 ). What forms can these formal conceptual representations of a business model take; why are some formal conceptualizations more effective as boundary objects than others; and their effectiveness as boundary objects depends on founder characteristics, stakeholder characteristics, the nature of the business model and/or the dynamics of the external environment. That is, founders create a minimum viable business plan that represents just enough investment of time, energy, and other resources to provide a mechanism for exchanging information necessary to test the correctness of their business model.
How founders craft a crowdfunding message that offers the best mechanism for exchanging information to refine their business model (and not necessarily raise the most funds).
Building Block 5: Persevere or Pivot With Course of Action
Entrepreneurship research (past and future) can provide additional insight into turnaround or persistence decision. In one of the few empirical studies of pivots, Denoo et al. 2018) found that less than 40% of young companies changed their business model over a 10-year period. For example, future research could explore the information signals that indicate the need for specific pivots; the activities involved in introducing specific pivots; and the changes that pivots cause in startups' business models and communities of inquiry, and in founders' narratives.
Although refinement has been described in terms of “either a change in business opportunity (value creation), or a change in exploitation strategy (value delivery), or both” (Wasserman, 2012), future research could explore the extent of finer refinement. By considering the degree of refinement of pivots, future research can develop richer theories of the antecedents, mechanisms, and consequences of pivots. Future research could explore the conditions under which turnover (in its various forms and degrees) is more likely to provide information indicating the need for change, including the composition of the founding team and the culture of developing organizations.
While existing research has led to a focus on the factors that hinder change and how some can overcome these obstacles, future research could explore the opposite. Future research has the opportunity to unravel the idea of a runway and draw connections between the runway and turning, speed, learning, and costs. If “runway” refers to “the amount of time remaining in which a startup must either take off or fail” (Ries, 2011), future research could examine many of the same potential independent variables described above, but with differences in results between two dependent variables. variables – runway as number of turns and runway as remaining time.
In fact, future research can investigate the relationship between the number of points remaining and the amount of time remaining and explore the factors that strengthen or weaken this relationship.
Overarching Perspective: Examining the Lean Startup Framework
Third, with regard to contingency factors, it is important to understand under what circumstances applying the lean startup framework can lead to more or less favorable outcomes. How the availability of financial resources determines the relationship between the lean startup approach and performance is thus an interesting research question. In this sense, other internal contingency factors may influence the performance effects of the lean startup framework and pose interesting research questions.
In addition to these internal contingency factors, we propose a broader perspective on the boundary conditions and moderators that may affect the applicability of the lean startup framework. As pointed out above, the context may represent the boundary conditions of the lean startup framework beyond which the model no longer applies – perhaps for example in the context of low uncertainty and significant resource slack. Although there have already been calls for entrepreneurial research in communities of inquiry (Shepherd et al., 2015), here we highlight the criticality of this need given the lean startup framework's reliance on “external” participants to test (and reformulate) hypotheses using of MVPs.
Second, practitioners have offered the lean starting framework as a way to learn under conditions of uncertainty (Blank, 2013; Ries, 2011). Therefore, rather than assuming that all start-ups face the same environmental conditions (as they involve entrepreneurial action), there is an opportunity to explore how different levels of the different environmental dimensions affect the lean start-up process. Third, the natural environment is another key context in which startups are embedded and in which the lean startup process can play an important role.
In summary, the previous sections portrayed the various building blocks of the lean startup framework and outlined some important opportunities for future research.
Conclusion
Develop a narrative perspective of business models to generate new insights into the sense-making process, identify potential stakeholders, and develop a potential opportunity related to business model co-construction. Develop a more innovation-based perspective of business models to explore, for example, the interrelationships between activities, cognitions and narratives; the role of feedback, events and other external environmental changes in adapting or refining business models; and different paths of business model innovation. Research to explore founders' activities in researching, gathering and analyzing information to test a hypothesis, or set of hypotheses, and the role (if any) of narratives in the formation and subsequent testing of initial hypotheses.
Investigate whether founders with high empathic accuracy generate different hypotheses than those with low empathic accuracy, for example, seeking information, using the belief or skepticism approach to testing hypotheses, and interpreting the results of testing hypotheses. Learn how differences in founders' prosocial motivation influence the nature of hypotheses, hypothesis testing, and interpretation of hypothesis testing results, including the hypothesis testing process for hybrid startups. Examine the role of the termination decision in combination with the decision to change or persevere.
Examine the extent of a focal point and its implications for learning and performance, e.g. antecedents and/or consequences of the degree to which there is a change in the business opportunity and the degree to which there is a change in the exploitation strategy – a change in the business model • Explore the information signals of the need for a specific pivot, the activities involved in design a specific pivot and the changes the pivot leads to in the business model, the startup's community of inquiry, and the founder's narrative. That is, explore the conditions under which pivoting (in its various forms and degrees) is more likely given information that indicates the need for a change, including founding team composition and the culture of the new organization. Pull the plug or take the plunge: Multiple options and the speed of risk-taking in the Australian mining industry.
The role of the business model in capturing value from innovation: evidence from Xerox Corporation technology spin-offs. The "survival of the fittest" fallacy: Effects of extrinsic motivation on persistence decisions for failing firms. Technology-Market Combinations and Entrepreneurial Opportunity Recognition: An Exploration of the Opportunity-Individual Link.
