Innovating like a Startup

Context: Developing product innovation is a risky activity, but when successful, it enables established and large companies to create new market and entry barriers, to challenge market leaders, to accrue high pro fits and to leapfrog the competition. To compete in this age of disruption, companies cannot rely on the traditional way of advancement, which focuses on cost efficiency, lead time reduction or quality improvement. Startups are disrupting traditional markets and replacing well established actors with their innovative products. Corporate management is now looking for ways to innovate like startups. Along with it, recently, awareness and use of the Lean startup method has grown rapidly amongst the software startup community and large companies.

Objective: The research activities undertaken during this PhD study had had the aim to understand better how Lean internal startup empowers software product innovation in large companies.

Method: A multiple case study approach is followed in the investigation. Five software product innovation projects from four different companies are investigated. Twenty three in-depth interviews of the employees with different roles and responsibilities are conducted. To guide the study process, a conceptual framework based on method in action framework is developed. The conceptual framework serves as the theoretical lens for the investigation of the case, acting as a sensitising and sense-making device that guides the data collection and analysis processes. It was used to frame the interview questions, and enabled a holistic understanding of the dynamics between the internal startup and other entities inside the company.

Results: The case study results shows that Lean internal startup can be initiated bottom up by the employees or free initiative or top down by the corporate management or organised initiative. Free initiative is influenced by founders who owns the original ideas and de fined the scope. An organised initiative is a strategy exercise to look growth and revenue beyond the current offer. The top-down approach encounters the issue of no founder with a vision for the new product. Hence, the Lean internal startup searches for a problem to solve. In this ideation process, Design Thinking can complement Lean startup. A list of enablers and inhibitors of applying Lean startup in large companies are identified: top management support and cross-functional team as key enablers, breaking the rules and change of company direction as common inhibitors.

Conclusions: A generic process flow of Lean internal startup process summarises the common key processes of Lean internal startup in the context of large companies. In addition, a set of the enablers and the inhibitors of applying Lean internal startup have been identified. They are rooted in the method-in-action framework and resulting from the empirical study of real-world software product innovation process using Lean startup method. Three future search directions are suggested. First is to extend this study by addressing the limitation of the research approach. Secondly, future research could validate the list of enablers and inhibitors to a broader population. A third and final suggestion is to investigate the application of Lean startup method in a global software development setting.