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The road to entrepreneurial success: business plans, lean startup, or both?

Author

Listed:
  • Chris Welter
  • Alex Scrimpshire
  • Dawn Tolonen
  • Eseoghene Obrimah

Abstract

Purpose - The goal of this research is to investigate the relationship between two different sets of practices, lean startup and business planning, and their relation to entrepreneurial performance. Design/methodology/approach - The authors collected data from 120 entrepreneurs across the US about a variety of new venture formation activities within the categories of lean startup or business planning. They use hierarchical regression to examine the relationship between these activities and new venture performance using both a subjective and objective measure of performance. Findings - The results show that talking to customers, collecting preorders and pivoting based on customer feedback are lean startup activities correlated with performance; writing a business plan is the sole business planning activity correlated with performance. Research limitations/implications - This research lays the foundation for understanding the components of both lean startup and business planning. Moreover, these results demonstrate that the separation of lean startup and business planning represents a false dichotomy. Practical implications - These findings suggest that entrepreneurs should engage in some lean startup activities and still write a business plan. Originality/value - This article offers the first quantitative, empirical comparison of lean startup activities and business planning. Furthermore, it provides support for the relationship between specific lean startup activities and firm performance.

Suggested Citation

  • Chris Welter & Alex Scrimpshire & Dawn Tolonen & Eseoghene Obrimah, 2021. "The road to entrepreneurial success: business plans, lean startup, or both?," New England Journal of Entrepreneurship, Emerald Group Publishing Limited, vol. 24(1), pages 21-42, February.
    • Handle: RePEc:eme:nejepp:neje-08-2020-0031
    DOI: 10.1108/NEJE-08-2020-0031
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    Citations

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    Cited by:

    1. Reyna Rodarte-Arreola & Ana Maria Bojica & María del Mar Fuentes-Fuentes, 2024. "How does prosocial motivation influence the probability of an entrepreneur registering a new firm? An analysis of its interaction with business gestation activities," International Entrepreneurship and Management Journal, Springer, vol. 20(2), pages 1067-1088, June.
    2. Victor Otieno & Stephen Muathe, 2023. "A Reflection Approach on Business Incubation Services: Accelerating Startup Businesses in Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 1375-1400, May.
    3. Matthew Schwieterman & Chris Welter, 2023. "Supply chain from start to finish: the implications of supply chain management for entrepreneurs," International Entrepreneurship and Management Journal, Springer, vol. 19(4), pages 1947-1964, December.

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