Abstract
PurposeThe goal of this research is to investigate the relationship between two different sets of practices, lean startup and business planning, and their relation to entrepreneurial performance.Design/methodology/approachThe authors collected data from 120 entrepreneurs across the US about a variety of new venture formation activities within the categories of lean startup or business planning. They use hierarchical regression to examine the relationship between these activities and new venture performance using both a subjective and objective measure of performance.FindingsThe results show that talking to customers, collecting preorders and pivoting based on customer feedback are lean startup activities correlated with performance; writing a business plan is the sole business planning activity correlated with performance.Research limitations/implicationsThis research lays the foundation for understanding the components of both lean startup and business planning. Moreover, these results demonstrate that the separation of lean startup and business planning represents a false dichotomy.Practical implicationsThese findings suggest that entrepreneurs should engage in some lean startup activities and still write a business plan.Originality/valueThis article offers the first quantitative, empirical comparison of lean startup activities and business planning. Furthermore, it provides support for the relationship between specific lean startup activities and firm performance.
Highlights
No business plan survives first contact with a customer – Steve BlankThis quote represents the differing perspectives on the value of business planning relative to the value of lean startup methods proposed by Blank and others (Blank and Dorf, 2012)
We propose the following question: which individual aspects of business planning and lean startup methods are related to success? We study the components of both business planning and lean startup methods as there is some academic support for aspects of lean startup such as experimentation (Carmuffo et al, 2019), but limited empirical investigation into lean startup more broadly
We focus on the underlying activities that make up the processes of lean startup and business planning since our initial surveying showed that entrepreneurs often employ aspects of each
Summary
No business plan survives first contact with a customer – Steve Blank. This quote represents the differing perspectives on the value of business planning relative to the value of lean startup methods proposed by Blank and others (Blank and Dorf, 2012). Much of traditional entrepreneurial training centers on the business plan (Honig, 2004). The full terms of this license may be seen at http:// creativecommons.org/licences/by/4.0/legalcode
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