Abstract
Startup, or a potential company looking for form and repeatable, scalable business model, has become an advocated mechanism for embracing high ambition, innovativeness, and growth. The success of a startup is often related to the time it takes the startup to develop their business model. When the entire business is based on extreme uncertainty the main business hypothesis of the business model must be continuously tested and improved. This main business hypothesis can be split into smaller business hypotheses and when one of these business hypotheses proves to be false, a change in the direction of the company – so-called pivot – must be considered. Readily made approaches exist to accomplish this, including in particular the Lean Startup framework, that aims at iteratively developing, experimenting, and validating business hypotheses. In this paper study how pivots can change business hypotheses shown as a segments in Lean Model Canvas, a strategic management tool for developing nbusiness models. As an empirical contribution, we describe this definition of pivots with three case companies – all small software startups from Tampere region, Finland – and map the pivot effects on the business hypotheses. We found out that the pivots can be identified by changes in the Lean Model Canvas, that pivots typically take place in groups, and that comprehensive pivots happen early in the startup’s life, whereas once the business model is clarified, fine-tuning is more likely to take place.
Keywords
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsReferences
Barquet, A.P.B., Cunha, V.P., Oliveira, M.G., Rozenfeld, H.: Business model elements for product-service system. In: Hesselbach, J., Herrmann, C. (eds.) Functional Thinking for Value Creation, pp. 332–337. Springer, Heidelberg (2011)
Blank, S.: Search versus execute (2012). http://steveblank.com/2012/03/05/search-versus-execute/
Blank, S.: The Four Steps to the Epiphany. K&S Ranch, Pescadero (2013)
Blank, S.: Why the lean start-up changes everything. Harvard Bus. Rev. 91(5), 63–72 (2013)
Blank, S., Dorf, B.: The Startup Owner’s Manual. K&S Ranch, Pescadero (2012)
Bosch, J., van der Veen, J.S.: Pivots and architectural decisions: two sides of the same medal? In: Eighth International Conference on Software Engineering Advances, ICSEA 2013, October 27-October 31 2013, Venice, Italy (2013)
Callele, D., Boyer, A., Brown, K., Wnuk, K., Penzenstadler, B.: Requirements engineering as a surrogate for business case analysis in a mobile applications startup context. In: IW-LCSP@ ICSOB, pp. 33–46. Citeseer (2013)
Dande, A., Eloranta, V.P., Kovalainen, A.J., Lehtonen, T., Leppänen, M., Salmimaa, T., Sayeed, M., Vuori, M., Rubattel, C., Weck, W., et al.: Software startup patterns-an empirical study. Tampereen teknillinen yliopisto. Tietotekniikan laitos. Raportti-Tampere University of Technology. Department of Pervasive Computing. Report; 4 (2014)
Fitzpatrick, R.: The startup toolkit: a canvas for you to sketch your business framework (2010). http://readwrite.com/2010/06/15/the-startup-toolkit-a-canvas-f
Martin, R.C.: Agile Software Development: Principles, Patterns, and Practices. Prentice Hall PTR, Upper Saddle River (2003)
Maurya, A.: Running Lean: Iterate from Plan A to a Plan that Works. O’Reilly Media Inc., Sebastopol (2012)
Münch, J.: Evolving process simulators by using validated learning. In: Proceedings of the International Conference on Software and System Process, pp. 226–227. IEEE Press (2012)
Osterwalder, A., Pigneur, Y.: Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Wiley, New York (2010)
Ries, E.: The Lean Startup. Penguin, New York (2011)
Runeson, P., Höst, M.: Guidelines for conducting and reporting case study research in software engineering. Empirical Softw. Eng. 14(2), 131–164 (2009)
Yin, R.K.: Case Study Research: Design and Methods. Sage Publications, Thousand Oaks (1994)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2015 Springer International Publishing Switzerland
About this paper
Cite this paper
Terho, H., Suonsyrjä, S., Karisalo, A., Mikkonen, T. (2015). Ways to Cross the Rubicon: Pivoting in Software Startups. In: Abrahamsson, P., Corral, L., Oivo, M., Russo, B. (eds) Product-Focused Software Process Improvement. PROFES 2015. Lecture Notes in Computer Science(), vol 9459. Springer, Cham. https://doi.org/10.1007/978-3-319-26844-6_41
Download citation
DOI: https://doi.org/10.1007/978-3-319-26844-6_41
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-26843-9
Online ISBN: 978-3-319-26844-6
eBook Packages: Computer ScienceComputer Science (R0)