Testing business model assumptions in an early stage startup using lean principles: A reflexive case study examining the application of lean startup approaches applied retroactively

Lean startup approaches have been widely adopted by entrepreneurs worldwide in recent years, yet little is known about the effectiveness of such strategies when applied to startups retroactively; that is, when a startup has already launched a product without using such methods to guide and grow their venture.

This study aims to explore the suitability of Lean Startup Approaches (LSAs) for existing startups that were founded and developed without incorporating such approaches and assessing the empirical costs and benefits of doing so. In order to explore this question a case study was conducted with PeopleHawk - a SaaS startup based in the United Kingdom.

In the case of PeopleHawk, the benefits derived from integrating LSAs include: the ability to identify when to pivot their business model; possessing a systemized process for gathering, distilling, and integrating primary data from future users; and ultimately co-creating, with future users, a product that they need and are willing to pay for. Another benefit of implementing such LSAs retroactively, in PeopleHawk’s case, was that they already had a functioning platform. This allowed potential users to experience the platform immediately, in turn expediting the time of customer discovery and MVP development.

The costs of integrating such LSAs include: the amount of time spent internally establishing a new common language, practices, and processes; and the time it takes to recruit, interview, and connect with a substantial number of participants. These are sunk costs that ultimately prove wasted when the company achieves a greater understanding of the customer, opportunity, and necessary value proposition.

In conclusion, there is still significant value derived from adopting LSA strategies, despite consuming a significant amount of time. Moreover, the insights uncovered contribute heavily to validating their business model and growth trajectory.