New research on Lean Startup: hypotheses good; MBAs bad
New research on the Lean Startup methodology finds that a business school background (i.e. an MBA) can hinder a founder’s ability to adapt to new evidence in an early-stage lean startup context, if they don’t embrace the hypothesis-testing approach through customer discovery interviews. On the other hand, if they do embrace the approach — getting out of the building and gathering evidence from customers — they move faster than non-MBAs.
As an MBA graduate who runs startup accelerators and teaches a Lean Startup course much like the one in the research, I am very interested in what this means. So, let’s dig in!
The research by Michael Leatherbee and Riitta Katila is published in the Strategic Entrepreneurship Journal, which is paywalled — but they discuss the findings in this Stanford podcast, joined by Steve Blank. The research covers 388 teams who went through an 8-week experiential lean startup course.
I’ve read the published journal article and highlight some of the key findings, with my comments in italics, below:
1. Probing hypotheses via customer interviews leads to faster convergence, both through invalidating hypotheses and discarding them, and also inspiring new hypotheses and new business ideas. But also that as more aspects of the business model are validated, the generation of new hypotheses slows: we “find that convergence leads to fewer new hypotheses; that is, there is a natural stopping mechanism.”
In other words, talking to customers can open up pathways you hadn’t considered, and inform your pivots.
2. More hypotheses isn’t better. Teams that generated more hypotheses tested fewer of them. The researchers propose that this means there should be an emphasis on quality rather than quantity.
I disagree. I think ideation and divergence is an important part of the process, and especially in a team setting it allows everyone’s ideas to be shared and have a chance to be considered. I would instead focus on the process of ideating and the process of selecting which hypotheses to test and which to abandon.