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Modelling the lean startup: A simulation tool for entrepreneurial growth decisions

Paper presented at 16th EURAM Conference 2016, Manageable cooperation?, Paris, France, 1-4 June 2016
: Täuscher, Karl; Abdelkafi, Nizar

Fulltext urn:nbn:de:0011-n-5096950 (1.1 MByte PDF)
MD5 Fingerprint: 69deac06481139d3933bd5bc21144e1d
Created on: 11.9.2018

2016, 39 pp.
European Academy of Management (EURAM Conference) <16, 2016, Paris>
Presentation, Electronic Publication
Fraunhofer IMW ()

Growth-oriented ventures face the challenge of focusing their limited resources on a suitable growth strategy. Extant research argues that successful startups build their growth strategy around reinforcing feedback loops. The “lean startup” literature suggests that entrepreneurs should identify the dominant feedback loop driving the growth of their business and consequently focus their resources on this “engine of growth”. The framework gains increasing popularity among entrepreneurs and investors; yet, they struggle to objectively assess and compare the strength of different feedback loops. This research therefore develops a decision support tool to support entrepreneurs in their strategic growth decisions. The tool builds on a System Dynamics simulation model that allows experimenting with different future scenarios and growth assumptions. The paper applies the decision tool to compare the growth potential of three stylized startups. Based on the modelling practice and simulation runs, it derives implications for entrepreneurs aiming at growing their business. Finally, it makes propositions on how to advance the underlying theoretical framework.