Managing Early Stage Software Startups- Applying Lean Startup Principles in Practice

Abstract

Software startups are more popular than ever and growing in numbers. They operate under conditions of extreme uncertainty and face plenty of challenges, underlined by their high failure rate. Using Design Science Research, we set out to investigate (1) what the typical challenges are in terms of finding a product idea worth scaling, in early stage software startups and (2) what solution would serve to mitigate these challenges. A literature review showed that in recent years, several authors have suggested ways to increase the odds of succeeding as a startup, e.g. Customer Development and The Lean Startup. Interviews with industry professionals showed that working in a structured and organized manner is a big challenge, and that even though The Lean Startup offers guidance, many find the concepts difficult to implement in practice. The Early Stage Software Startup Development Model (ESSSDM) extends existing Lean Startup processes and is the suggested solution to the identified challenges. It is novel in that it supports investigating multiple product ideas in parallel, and provides clear criteria for when to move forward with product ideas. In addition, it gives advice on when to abandon product ideas and what techniques to use while validating them. Much of the model was used and successfully evaluated in a startup project co-founded by the authors. Further evaluation was done through interviews with industry professionals.