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A Theoretical Analysis of the Lean Start-up Method

The lean start-up method (LSM) advocates an iterative and adaptive product development and testing approach to innovation. It recommends firms to build test products, use them to learn about consumer preferences, and modify (or “pivot”) the product design accordingly. It is less straightforward to understand how effective LSM can be, however, not least because consumers’ responses to the test product are influenced by its quality, price, and design—that is, learning is endogenous to the features of the test product. This paper analyzes the build-test-learn cycle of LSM using an analytical model to understand its microfoundation and how best to implement it. We find that an optimal test product that maximizes learning should aim either to confirm a more likely product design or to rule out a less likely product design as being the most desired by consumers, have a vertical quality that is neither too high nor too low, and have a higher quality when aiming to confirm than to rule out. We also identify the product-market conditions for which the LSM is more effective. Conceptualizing the LSM via a formal model may help to improve its implementation in practice and to advance further academic research.

Ketersediaan

Informasi Detail

Judul Seri

MARKETING SCIENCE; Vol.40 No.3 May-June 2021

No. Panggil

-

Penerbit

: .,

Deskripsi Fisik

p. 395 - 412

Bahasa

English

ISBN/ISSN

-

Klasifikasi

-

Tipe Isi

-

Tipe Media

-

Tipe Pembawa

-

Edisi

-

Subjek

ENTREPRENEURSHIP
BAYESIAN LEARNING
NEW PRODUCT DEVELOPMENT
LEAN START-UP METHOD
CUSTOMER DISCOVERY

Info Detail Spesifik

https://doi.org/10.1287/mksc.2020.1269

Pernyataan Tanggungjawab

Onesun Steve Yoo, Tingliang Huang, Kenan Arifoğlu

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