Following models are suggested methods to use for starting a venture or develop a product/service.
In this,– Business plan, Lean startup, Design thinking are the most popular among startup community. On the other hand effectuation leads as the most respected model among researchers.
Following are the three ways I would classify them
- Models 1 to 9 as Model Centric or Model driven
- Model 10 to 13 as Context driven(effectuation, bricolage, User-entrepreneurship, Copycat)
- Model 14 as structure driven
Here we go;
- Business Planning (Sahlman, 1997, Delmar and Shane, 2003 )
A business plan is a written document that describes in detail how a startup defines its objectives and how it is going about achieving its goals. Most of the latest authors like Sahlman were business plan reformists(include next two models).
- Contingency planning (Honig, 2004, Marc Gruber 2017)
Honig suggests that planning processes need to be governed by different planning regimes depending on the type of founding environment ie highly dynamic environments, less dynamic environments, etc. Thus planning must be adative. Gruber suggest that planning processes need to be governed by different planning regimes depending on the type of founding environment.
- Discovery-driven planning (McGrath and MacMillan, 1995)
Discovery-driven planning is an approach that combines business planning with learning through a series of steps that reveal key discoveries (McGrath and MacMillan 2000). The core premise of the method is that when there isn’t enough information to develop a conventional business plan, the thrust of planning must instead be on learning, while at the same time reducing cost and risk. Conventional planning tends to lock an organization in, too early, to a specific operational trajectory.
- Probe-and-Learn approach (Lynn et al., 1996).
Gary Lynn proposed the Probe-and-Learn approach in which companies develop products by probing potential markets with early versions, learning from the probes, and probing again. The initial product will not be the culmination of the development process but rather the first step.
- Lean start-up approach (Blank, 2013; Ries, 2011)
Lean startup is one of the most successful prescritive models in the technology startup ecosystem. This is promoted as a hypothesis-driven approach that focuses on experimenting rather than planning. It proposes engaging with customers through a minimum viable product, which is built iteratively and incrementally according to customer feedback.
- Theory Based View(felin et al, 2020)
The Theory based view stress on the importance of a theory to truly create new value. According to the authors, theory helps entrepreneurs see what others can’t see. Contrarian or unique beliefs provide the underlying raw material of a firm’s theory of value. Added to that theory allows entrepreneurs to be more scientific about value creation and to perform the right type of experiments.
- Disciplined Entrepreneurship. Sull (2004)
Donald Sull notes that instead of ignoring, avoiding or getting affected by uncertainty while trying to fight it, entrepreneurs should manage it by taking a disciplined approach. Bill Aulet (Aulet, 2013) also suggests the deciplinary approch but also offers a step-by-step( 24 steps) approach to creating products.
- Design thinking
Design and design science are broad terms with many different cannotations. In contract, design thinking means– the process approach developed for creating design solutions(products, services, etc.). Standford Design school proposed a process model of design thinking that includes 5 stages/steps ; empathize, define, ideate, prototype, and test. Even though it seems like a linier step by step process it’s proposed as a nonlinear and continues process.
- Design Cognition (Garbuio et al., 2017)
Design cognition is not a prescriptive model. It is just a design science based pedagogical approach proposed for entrepreneurship education. I added it here because of the diversity value. It is developed as a critical counter to other prescriptive models including design thinking. This perspective involves four cognitive acts from the design cognition research to opportunity creation. Following are the four; Framing, Analogical reasoning, Abductive reasoning, and Mental simulation.
- Effectual entrepreneurship (Sarasvathy, 2001)
This is one of the most popular and recognized models among entrepreneurship researchers. Effectuation suggest that entrepreneurs do not start with concrete goals as in the case of business plan, but constantly develop them on the fly through personal strengths and available resources. Effectual thinkers believe that “If I can control the future, I do not need to predict it.”
- Entrepreneurial bricolage: Baker, T., & Nelson, R. E. (2005).
This is not essentially a prescriptive model. It is included because of its prescriptive value. Bricolage is an action-oriented or hands-on approach (Fisher, 2012) that mitigates the limitations of the resource environment by using available resources in ways that were not originally intended and therefore reduces resource uncertainty. According to Baker and Nelson (2005:334) bricolage includes ”making do by applying combinations of resources at hand to new problems and opportunities”.
- User Entrepreneurship( and User Innovation) User entrepreneurship: Shah, S. K. (2007)
This is also not essentially a prescriptive model. It is included because of its prescriptive value. User entrepreneurship is the process by which lead users become entrepreneurs. When users experience a need in their own lives, they develop an innovative solution to address their need, and sometimes even openly share their solution with others before commercializing a product. This phenomenon has been labeled as user entrepreneurship (Shah and Tripsas 2007). This idea is grounded mostly on the early work of Von Hippel (Von Hippel 1988). His work has shown that users are an important and frequent source of innovation and user innovations may be qualitatively different than those of manufacturers.
13. Copy Cat Model(Check Scholar hits)
Copycat model, even though least appreciated, is one of the(or the) most successful way civilizations run business and trade. It is also a biologically consistent model. Even Steve Jobs once said a quote from Pablo Picasso. “Good artists copy. Great artists steal. ”essentially, appreciating copying.(not stealing)
14. Government or Authority Sanctioned, Structure driven
Traditionally business rights were often sanctioned by authorities. In India there were specialized caste groups who were doing business and nothing else. Even today there are many successful businesses that works under the government patronage.
For comprehensive review and understanding on entrepreneurship models/methods check following papers:
- Entrepreneurial Methods by Mansoori
- Demystifying the genius of entrepreneurship
- Effectuation, Causation, and Bricolage: A Behavioral Comparison of Emerging Theories in Entrepreneurship Research
- Comparing effectuation to discovery-driven planning, prescriptive entrepreneurship, business planning, lean startup, and design thinking
If you want to have a peek at few models from popular authors checkout the following video by Stanford’s Chuck Eesly.