UCL Discovery
UCL home » Library Services » Electronic resources » UCL Discovery

A Theoretical Analysis of the Lean Startup Method

Yoo, OS; Huang, T; Arifoglu, K; (2021) A Theoretical Analysis of the Lean Startup Method. Marketing Science , 40 (3) pp. 395-412. 10.1287/mksc.2020.1269. Green open access

[thumbnail of MKSC-18-0058_R4_v7withAuthorNames.pdf]
Preview
Text
MKSC-18-0058_R4_v7withAuthorNames.pdf - Accepted Version

Download (3MB) | Preview

Abstract

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.

Type: Article
Title: A Theoretical Analysis of the Lean Startup Method
Open access status: An open access version is available from UCL Discovery
DOI: 10.1287/mksc.2020.1269
Publisher version: https://doi.org/10.1287/mksc.2020.1269
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher's terms and conditions.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management
URI: https://discovery.ucl.ac.uk/id/eprint/10109214
Downloads since deposit
582Downloads
Download activity - last month
Download activity - last 12 months
Downloads by country - last 12 months

Archive Staff Only

View Item View Item