Abstract

Digital startups in the early stages of their development frequently undergo innovation to their value architecture and Business Model. A set of pragmatic methods drawing on lean and agile principles has recently been proposed to support digital entrepreneurs facing Business Model Innovation (BMI), known as Lean Startup Approaches (LSAs). However, the theoretical and practical relationship between BMI and LSAs in dynamic digital environments has seldom been investigated. To fill this gap, our study draws on an exploratory multiple-case study based on three digital multisided platform startups to craft a unified framework that can disclose the relationship between BMI, LSAs and Agile Development (AD), within the context of Strategic Agility. Our findings, which emerge from the unified framework, show that LSAs can be employed as agile methods to enable Business Model Innovation in Digital Entrepreneurship. These findings are then organized around a set of propositions, with the aim of developing a research agenda directed towards integrating BMI, LSAs and AD processes and methods.

Introduction

In the early stages of their development, new ventures and startups frequently undergo change and innovation (McDougall & Oviatt, 1996), because of their need to tackle resource scarcity and align their internal acquired resources to the external conditions (Hanlon & Saunders, 2007; Katila & Shane, 2005). This is particularly true for startups operating in a dynamic and uncertain digital context (Courtney, Kirkland, & Viguerie, 1997; Sirmon, Hitt, & Ireland, 2007), where the impact of pervasive and multipurpose digital technologies increases the pace of change, leading to significant transformations in a number of industries (Bharadwaj, El Sawy, Pavlou, & Venkatraman, 2013; Ghezzi, Cortimiglia, & Frank, 2015; Kalakota & Robinson, 1999).

Within such a dynamic context, innovating is an intricate exercise that demands idiosyncratic and seemingly divergent approaches and tools which digital startups can select as required, depending on the direction they intend to take when embarking upon their innovation process.