The role of experiments in the quest for product/market fit: structuring business uncertainty through Agile methodologies

Abstract

Technological-based ventures are currently facing times of high uncertainty under conditions of lack of resources and time pressure. This leads them to “leaps of faith” decisions, highly endangering their chances to success and durability. Prior research discusses that, although under these conditions business models must be tested fast and thoroughly, classic planning methods are very likely to be inconsistent. The present paper’s objective is to understand how experimentation-led business model development processes are carried out in the face of uncertainty, with a particular focus on whereas and how the implementation of Agile methodologies within the venture contributes to its effectiveness in achieving product/market fit. Given the challenges in scaling up such methodologies, it attempts to answers questions regarding their evolution too. Through a qualitative grounded-based research conducted on five diverse Italian ventures, this paper contributes in unifying the gap between BMI, Entrepreneurial Approaches and the product/market fit milestone, towards strategic agility. Aside from extending current literature by re-framing unclear concepts such as product/market fit and discovery-driven learning, this paper adds several managerial implications, especially valuable for scaling-up ventures. Indeed, it highlights the benefits and challenges of implementing Agile methodologies to fuel the business validation process through customer feedback, especially in the start-up phase. In particular, it suggests ventures how to evolve their practices when entering the scaling-up phase, and to combine Agile with more human-centered processes to secure customer orientation, organizational flexibility and, ultimately, strategic agility.