When Lean Startup Meets Complex Societal Problems: Challenges in Startup Early-Stage Experimentation

Abstract

In today's rapidly evolving entrepreneurial landscape, addressing complex societal challenges, or has emerged as a crucial area of focus for startups. On the other hand, startups are often encouraged to adopt experimental lean approaches, which emphasize focusing on a customer problem and developing hypotheses to envision a viable value proposition and business model. However, while lean methodologies prioritize quick iterations and scalability, they may fall short when tackling complex issues that require long-term commitment, collaboration across diverse stakeholders, and careful consideration of societal impact. The study's research question is centred on understanding how lean startup approaches can be applied to engage with stakeholders, pivot, and iterate their business models based on feedback received from various actors. To explore this, we select the mobility industry in Italy as the empirical setting for this study. Italy's urban mobility landscape presents a unique and complex context, characterized by a growing need for sustainable transport solutions, the presence of public and private sector collaboration, and the active role of diverse actors working to address these challenges. We employ an exploratory multiple-case study approach, examining five startups addressing mobility-oriented problems. A total of 13 in-depth interviews were conducted in two waves. Data was triangulated with secondary sources, such as podcasts, whitepapers, and press releases, to understand the stakeholder dynamics involved in the experimentation phase. Our findings suggest that: (i) startups typically begin with broad, ambitious goals, only to pivot toward more narrowly focused problems, thereby reducing the scope of their initial ambitions; (ii) startups addressing more complex problems tend to find support from public entities, while those focused on less wicked problems prioritize direct engagement with end-users and industry experts, as the lean startup approach suggests. Moreover, by adopting as an analytic device the three main categories derived from the lean Impact startup framework (value search, value creation, and value distribution), we identify specific challenges faced by entrepreneurs in the first two stages of the process. The study concludes by offering practical insights into how entrepreneurs can better navigate the complexities of stakeholder engagement when tackling wicked problems.