Lean Startup as a Tool for Digital Business Model Innovation : Enablers and Barriers for Established Companies

University essay from Jönköping University/IHH, Företagsekonomi

Abstract: Background: The rapidly changing world of digital technologies forces many companies to undertake a digital shift by transforming existing business models into digital business models to achieve sustainable value creation and value capture. Especially, for established companies, that have been successful leaders before the dot-com bubble (1995-2000) and whose business models have been threatened by the emergence of digital technologies, there is a need for a digital shift. We refer to this digitization of business models as digital business model innovation. However, often adoption and implementation of digital technologies require tremendous changes and thus, can be challenging for established companies. Therefore, agile methods and business experimentation have become important strategic elements and are used to generate and test novel business models in a fast manner. We introduce lean startup as an agile method for digital business model innovation, which has proven to be successful in digital entrepreneurship. Thus, it requires further empirical investigation on how to use lean startup in established companies for successful digital business model innovation. Purpose: The purpose of our study is to identify enablers and barriers of lean startup as a tool for digital BMI in established companies. Thus, we propose a framework showing how established companies can be successful in digital business model innovation by using lean startup. Method: We conducted exploratory, qualitative research based on grounded theory following an abductive approach. Using a non-probability, purposive sampling strategy, we gathered our empirical data through ten semi-structured interviews with experts in lean startup and digital business model innovation, working in or with established companies, shifting their business model towards a digital business model. By using grounded analysis, we gained an in-depth understanding of how lean startup is used in practice as well as occurring barriers and enablers for established companies. Conclusion: We emphasize that successful use of lean startup for digital business model innovation is based on an effective (1) lean startup management, appropriate (2) organizational structures, fitting (3) culture, and dedicated (4) corporate governance, which all require and are based on solid (5) methodical competence of the entire organization. Furthermore, (6) external influences such as market conditions, role of competition, or governance rules indirectly affect using lean startup as a tool for digital business model innovation.

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