Mvp - Entrepreneurship

1. Compare and contrast the basic principles in both effectual entrepreneurship and lean start up.

Similarities between effectual entrepreneurship and lean start-up

1) How entrepreneurs start - effectual thinking vs. hypothesis-driven

Both effectual entrepreneurship and lean start-up start without a specific goal or business planning, but rather a blur vision or business hypothesis. And way they generate the vision or ideas are mostly random and based on their own personal experiences and resources.

2) Minimize loss and risks - affordable loss principle vs. minimum viable products

While effectual entrepreneurship emphasizes on affordable loss principle and lean start-up on minimum viable products, the goal of both is to minimize loss and risks.

Effectual entrepreneurs tend to find ways to reach the market with minimum expenditure of resources such as time, effort, and money. Sometimes, they could even start selling to customers without having the products. Lean start-up emphasize on avoiding waste. Entrepreneur starts with falsifiable business model hypotheses, and then tests those hypotheses using a series of minimum viable products (MVPs). MVP would produce the product with minimum features and functionalities in order to save time, money and resources. Additionally, by validating the hypothesis before launching the product, they avoid premature scaling and reduce the sunk costs on the development of unfit product for the market.

3) Product development - customer engagement and agile product development

While effectual entrepreneurship and lean start-up seem to have different methodologies in product development, both of them actually emphasize on customer engagement and agility.

Effectual entrepreneurship lives and breathes execution. Their plans are revised and recast through action and interaction with others on a daily basis. They value the partnership with customers. Lean start-up emphasizes “get out of the building”...