Lean Internal Startups for Software Product Innovation in Large Companies: Enablers and Inhibitors

TL;DR

This paper explores how large companies can adopt Lean startup methods internally to foster software product innovation, identifying key enablers and inhibitors through empirical case studies.

Contribution

It provides one of the first empirical investigations of Lean startup in large firms and introduces a general process model with enablers and inhibitors.

Findings

Top management support is crucial for success.

Cross-functional teams enable effective Lean internal startups.

Different challenges and inhibitors exist depending on the team and product type.

Abstract

To compete in this age of disruption, large companies cannot rely on cost efficiency, lead time reduction and quality improvement. They are now looking for ways to innovate like startups. Meanwhile, the awareness and use of the Lean startup approach have grown rapidly amongst the software startup community in recent years. This study investigates how Lean internal startup facilitates software product innovation in large companies and identifies its enablers and inhibitors. A multiple case study approach is followed in the investigation. Two software product innovation projects from two large companies are examined, using a conceptual framework that is based on the method-in-action framework and extended with the previously developed Lean-Internal Corporate Venture model. Seven face-to-face in-depth interviews of the employees with different roles are conducted. Within-case analysis and cross-case comparison are applied to draw the findings from the cases. A generic process flow summarises the common key processes of Lean internal startups. The findings suggest that an internal startup that is initiated management or employees faces different challenges. A list of enablers of applying Lean startup in large companies are identified, including top management support and cross-functional team. Both cases face different inhibitors due to the different process of inception, objective of the team and type of the product. Our contributions are threefold. First, this study is one of the first attempt to investigate the use of Lean startup approach in large companies empirically. Second, the study shows the potential of the method-in-action framework to investigate the Lean startup approach in non-startup context. The third is a general process of Lean internal startup and the evidence of the enablers and inhibitors of implementing it, which are both theory-informed and empirically grounded.