Page - 72 - in Digital Entrepreneurship - Impact on Business and Society

These learnings include the information on the falsification or corroboration of the tested assumption and guide the entrepreneurs’ decisionmaking to either pivot to a new/adapted idea or to persevere on the current path (Ries 2011; Bajwa et al. 2017). The challenge with the build–measure–learn loop is that the infinite char- acter of the loop gives entrepreneurs no guidance when to change the nature of experiments. It is not very practical nor useful to try to validate everything. But what is important is to validate the things that reallymatter to the business. It does not matter how many hypotheses an entrepreneur validates if none of them is critical for the success of the business. The ability to zoom out and clear the big picture is highly important to run successful iterations that matter. In practice, we see quite often entrepreneurs that use the iteration in an early stage to validate features—which is great in general—but forget to validate the value proposition first. This can be seen as premature scaling because an entrepreneur loses sight of the critical assumptions. Another important cornerstone of the lean startup approach is the development of experiments that create targeted learning at aminimum investment of time and money. One instrument to create this fast learning is a minimum viable product (MVP), which is a specific experiment (Ries 2011). There has been a lot of con- fusion on the termminimumviable product. Some authors and practitioners equal the MVP with every potential form of a business experiment (e.g., a customer interview), others equal an MVP with a prototype, etc. (Duc and Abrahamson 2016). This missing clarity does not reduce complexity but adds complexity for entrepreneurs and does thus not help to structure the development process of a venture. In the subsequent chapter, we aim to offer a structural approach to validate/invalidate the essential components of digital businessmodels. In addition, we aim to identify the specifics that different businessmodel types encounterwhen they are tested. Fig. 1 Build–measure–learn loop (reference to Ries 2011) BusinessModel Development and Validation… 75