Towards understanding startup product development as effectual entrepreneurial behaviors

TL;DR

This paper explores how effectual entrepreneurial behaviors influence software startup product development challenges, revealing that startups often focus on short-term feedback and local solutions, which impacts their development outcomes.

Contribution

It applies behavior theory to understand startup challenges, highlighting the role of effectual decision-making in software product development.

Findings

Startups emphasize short-term feedback over long-term strategies.

Vague prototype planning and throw-away prototypes are common.

Effectual behaviors influence technical challenges in startups.

Abstract

Software startups face with multiple technical and business challenges, which could make the startup journey longer, or even become a failure. Little is known about entrepreneurial decision making as a direct force to startup development outcome. In this study, we attempted to apply a behaviour theory of entrepreneurial firms to understand the root-cause of some software startup s challenges. Six common challenges related to prototyping and product development in twenty software startups were identified. We found the behaviour theory as a useful theoretical lens to explain the technical challenges. Software startups search for local optimal solutions, emphasise on short-run feedback rather than long-run strategies, which results in vague prototype planning, paradox of demonstration and evolving throw-away prototypes. The finding implies that effectual entrepreneurial processes might require a more suitable product development approach than the current state-of-practice.