Good Practices of the Lean Startup Methodology: Benefits, challenges and recommendations

Abstract

Most companies strive to capitalize on new business opportunities to innovate and develop new business models. The recent popularity of Lean Startup methodology in the startup scene suggests its potential applicability for the creation of new businesses in a corporate context. Therefore, this thesis identifies how to apply Lean Startup practices in software companies.

The research was conducted as a literature review and a qualitative study, including semi-structured interviews from three Finnish software companies. Furthermore, the study provides a within-case and cross-case analysis of the positive and negative effects and recommendations for applying Lean Startup practices in software companies.

The results indicate that there is resistance to change towards a more innovative company culture, insufficient knowledge and understanding of the Lean Startup, and its practices require time to be learnt. Moreover, the lack of proper communication of the Lean Startup benefits creates rejection from external teams. Nevertheless, the results reveal that the top management commitment to communicate and demonstrate early on what the Lean Startup is can help software companies and customers accept more readily the methodology and shift the company culture mindset towards a more innovative mindset. Furthermore, the results confirm that the Lean Startup application adds customer validation to the product development process, enabling faster product/market fits and data-driven decision-making that improves the process accuracy and speed. Moreover, the innovation accounting practice supports the learning about customer behavior. In contrast, the results show that teams not working together in the same location, customers rigidness and low or high volume of feedback can reduce the product development process speed.

Consequently, software companies should communicate and demonstrate very early on the benefits of the Lean Startup methodology to employees and customers to help them understand, learn and adopt its practices while embracing a more innovative culture.