Hypothesis-Driven Entrepreneurship: The Lean Startup

Posted: 9 Apr 2012

See all articles by Thomas R. Eisenmann

Thomas R. Eisenmann

Harvard University - Entrepreneurial Management Unit

Eric Ries

affiliation not provided to SSRN

Sarah Dillard

Harvard University - Business School (HBS)

Date Written: March 9, 2012

Abstract

Firms that follow a hypothesis-driven approach to evaluating entrepreneurial opportunity are called "lean startups." Entrepreneurs in these startups translate their vision into falsifiable business model hypotheses, then test the hypotheses using a series of "minimum viable products," each of which represents the smallest set of features/activities needed to rigorously validate a concept. Based on test feedback, entrepreneurs must then decide whether to persevere with their business model, "pivot" by changing some model elements, or abandon the startup. This note describes, step-by-step, how to follow the hypothesis-driven approach when evaluating entrepreneurial opportunity; explains how the approach mitigates cognitive biases that otherwise can contribute to poor decisions; and considers conditions that are best suited for lean startup methods.

Learning Objective: To describe the rationale for employing a hypothesis-driven approach to evaluating entrepreneurial opportunity and the processes used with such an approach.

Suggested Citation

Eisenmann, Thomas R. and Ries, Eric and Dillard, Sarah, Hypothesis-Driven Entrepreneurship: The Lean Startup (March 9, 2012). Harvard Business School Entrepreneurial Management Case No. 812-095. Available at SSRN: https://ssrn.com/abstract=2037237

Thomas R. Eisenmann (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

Cambridge, MA 02163
United States

Eric Ries

affiliation not provided to SSRN ( email )

Sarah Dillard

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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