See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/289345716

A Startup Cockpit for the Proof-​of​‐Concept

Working Paper · October 2015

DOI: 10.13140/RG.2.1.1276.9363

CITATIONS READS

0 682

1 author:

Sven Ripsas
Hochschule für Wirtschaft und Recht Berlin
12 PUBLICATIONS 132 CITATIONS

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Startup Cockpit View project

Rolle des Businessplans im Gründungsprozess View project

All content following this page was uploaded by Sven Ripsas on 05 January 2016.

The user has requested enhancement of the downloaded file.

 A  Startup  Cockpit  for  the  Proof-­‐of-­‐Concept  
Sven  Ripsas,  Birte  Schaper,  Steffen  Tröger1  

Table  of  Content  

 

Abstract  .........................................................................................................................  2  

1   Introduction  ............................................................................................................  3  

2   Business  Model  Development  in  Startups  ................................................................  4  

2.1   Definition  of  Entrepreneurship  and  Startup  ...................................................................  4  
2.2   From  Traditional  planning  to  Lean  Startup  .....................................................................  4  
2.3   From  Lean  Startup  to  the  Proof-­‐of-­‐Concept  ...................................................................  6  

3   Articulation  of  a  Startup  Cockpit  ..............................................................................  8  

3.1   Metrics  in  Business  Model  Accounting  of  Internet  Startups  ...........................................  8  
3.2   KPI-­‐Clusters  in  Online  Startups  ....................................................................................  10  

4   Possibilities  and  Limitations  of  Startup  Cockpits  ....................................................  13  

5   References  .............................................................................................................  14  

 

September  2015

                                                                                                                       
1
 A  big  thank  you  to  Christian  Tegge  und  Jonas  Vossler  for  their  support  during  our  research.  
  1  
  

Abstract  
More   and   more   innovative   new   ventures   step   away   from   the   traditional   business   plan   centred  
model   and   follow   the   “Lean   Startup   Idea”.   This   paper   introduces   a   measurement   tool   -­‐   the  
Startup  Cockpit  -­‐  that  helps  startups  on  their  way  from  an  idea-­‐based  organization  to  a  company  
with  a  profit-­‐generating  business  model.  It  is  based  on  the  Customer  Development  model  of  Blank  
(2006),  the  Lean  Startup  methodology   of  Ries  (2011),  and  Maurya  (2012),  the  Lean  Analytics  con-­‐
cept  of  Croll  and  Yoskowitz  (2013),  and  Faltin´s  ideas  (2013,  2008).  All  of  those  authors  introduced  
a  number  of  crucial  processes  and  meta-­‐principles  that  promote  successful  business  model  devel-­‐
opment  for  startups.    

In   an   innovation-­‐driven   market   a   business   plan   is   not   always   the   instrument   of   choice   in   the   early  
days   of   a   business.   Many   Internet   startups   have   established   a   key   performance   indicators   (KPI)  
oriented  process  and  successfully  refined  their  business  model  or,  as  Faltin  calls  it,  the  entrepre-­‐
neurial  design  (cp.  Faltin  2008).  This  paper  analyses  the  foundations  of  the  Lean  Startup  process:  
the  discovery-­‐driven  planning  and  the  hypotheses-­‐driven  planning  approach  and  the  application  
of  those  principles  in  Ries’  Lean  Startup  methodology  and  Blank’s  Customer  Development  model.  
A  business  plan  still  is  a  necessary  tool.  But  it  comes  later  in  the  startup  process,  after  the  proof-­‐
of-­‐concept.  

In  our  research  we  found  patterns  in  the  usage  of  numbers/metrics/KPIs  to  support  the  business  
model   design  process  -­‐  a  Startup  Cockpit  seems  to  be  within  reach.  But  it  is  often  said  that  „every  
entrepreneur  is  unique”.  That  makes  it  difficult  to  define  a  “one-­‐size-­‐fits-­‐all”-­‐set  of  KPIs  that  helps  
startups   from   different   industries   and   in   different   development   stages.   Nevertheless,   a   generic  
Startup   Cockpit   can   be   outlined.   But   according   to   our   findings   it   has   to   be   adjusted   to   each  
startup´s   situation.   The   main   determinants   are   the   development   stage,   the   business   model,   the  
strategy,  and  the  financing  structure.    

We  prefer  the  term  “cockpit”  over  “dashboard”  as  the  later  has  become  directly  linked  to  online  
business   models   whereas   our   approach   is   to   find   a   generic   approach   to   manage   the   process   from  
an   idea   to   the   proof-­‐of-­‐concept.   In   the   same   way   every   airplane   pilot   and   every   car   driver   only  
tracks   a   selected   set   of   information   such   as   speed,   engine   temperature,   and   gasoline,   an   entre-­‐
preneur  has  to  think  about  and  find  those  elements  of  information  that  best  reflect  the  core  of  his  
or  her  business  model  to  achieve  a  better  understanding  of  the  process  to  the  proof-­‐of-­‐concept.  
   

  2  
  

1 Introduction  
In   the   mid-­‐20th   century,   the   combination   of   venture   capital   and   startup   entrepreneurship   en-­‐
couraged  the  formation  of  a  startup  industry  comprised  of  numerous  Internet  ventures,  initially  
clustered   in   Silicon   Valley.   Today,   a   series   of   IT-­‐/Internet   startups   such   as   Apple,   Google,   Amazon,  
Alibaba   and   Zalando   has   triggered   a   reorganization   of   the   global   economy.   The   advanced   com-­‐
moditization  of  technology  through  infrastructure  like  open  source  software,  software  as  a  service  
(SaaS)   or   cloud   hosting   makes   it   less   expensive   and   less   risky   than   ever   before   to   establish   a   tech-­‐
nology  startup  (cf.  Herrmann  et  al.  2012,  Faltin  2008;  Ries,  2008).  Decreased  barriers  to  entry  in  
combination   with   the   increasing   economic   importance   of   new   businesses   (Kane   2010)   have  
sparked  enormous  interest  in  entrepreneurship  and  facilitated  the  emergence  of  startup  ecosys-­‐
tems  all  over  the  world.    

Despite   the   increasing   significance   of   innovative   startups   in   the   global   economy,   management  
scholars   and   professionals   to   a   great   extent   have   failed   to   stay   abreast   of   these   developments.  
Only  51  percent  of  new  firms  survive  five  years  or  more  (SBA  Office  of  Advocacy,  2012).  While  sta-­‐
tistics  on  business  dynamics  and  longevity  may  vary,  depending  on  the  industry  and  type  of  new  
firm,   it   is   argued   that   the   relatively   high   failure   rate   among   newly   created   ventures   is   evidence   of  
the   management’s   inability   to   translate   the   founder’s   vision   into   a   scalable   and   profitable   busi-­‐
ness   during   the   early   stages   of   an   emerging   firm’s   development   (cf.   Blank   and   Dorf   2012;   Ries  
2011;  Cooper  and  Vlaskovits  2010).    

Since  Harvard  University  awarded  its  first  master  of  business  administration  (MBA)  in  1908,  MBA  
graduates  have  been  taught  and  can  draw  from  an  extensive  array  of  formal  management  tools  to  
help  them  execute  and  administer  large  companies.  With  respect  to  strategic  planning  and  strate-­‐
gy   development,   this   set   of   management   instruments   has   been   mostly   exclusively   derived   from  
ideas   of   the   prescriptive   school   of   strategy   (Mintzberg   1990).   The   concept   of   creating   a   5-­‐year-­‐
business   plan   is   essentially   a   prescriptive   planning   model   with   the   phases   of   analysis,   strategy   de-­‐
velopment,  implementation,  and  control.  But  strategies  do  not  only  develop  as  planned  strategies  
(deliberate   strategies),   but   can   also   develop   unplanned   (emergent   strategies).   Emergent   strate-­‐
gies  are  not  explicitly  formulated  and  are  often  based  on  single,  unrelated  acts  in  an  unintended  
order.  Emergent  strategies  can  however  become  a  coherent,  strategic  pattern  (cf.  Müller-­‐Stewens  
and  Lechner  2011,  pp.  53).    

In   Germany   in   the   90s   and   00s   founders   of   startups   first   adopted   the   dominant   strategic   planning  
approaches   of   general   management   that   had   originally   been   designed   to   build,   run   and   grow  
large   businesses,   and   wrote   business   plans   to   demonstrate   that   they   found   an   opportunity   to  
build  a  value  generating  business.  But  the  more  innovative  a  business  idea  is  the  more  uncertain  
is  success  because  a  great  part  of  the  idea  is  built  on  assumptions  and  not  facts.    
   

  3  
  

2 Business  Model  Development  in  Startups  

Recent  literature  on  startups  has  identified  a  set  of  processes  and  meta-­‐principles  that  promote  
successful   business   model   development   for   new   ventures   (e.g.   Blank   and   Dorf   2013,   Maruya  
2012,  Ries  2011,  Faltin  2008).  In  order  to  clarify  on  what  this  research  is  focussing  on,  the  follow-­‐
ing  chapter  presents  definitions  of  entrepreneurship  and  startup.  

2.1 Definition  of  Entrepreneurship  and  Startup    

Startups   are   the   result   of   entrepreneurial   activity.   For   Kirzner   entrepreneurs   discover   profit-­‐
generating  opportunities  because  they  see  things  others  do  not  see  (Kirzner  1973,  p.  11f).  And  for  
Stevenson  et  al.  „entrepreneurship  is  the  pursuit  of  opportunity  without  regard  to  resources  cur-­‐
rently  controlled“  (Stevenson  et  al.,  1994,  p.  5).  Both  definitions  are  based  on  the  exploitation  of  
arbitrage  based  opportunities.  But  modern  startups  do  more  than  just  seize  opportunities  –  they  
also   create   opportunities   themselves.   And   so   an   extension   of   the   entrepreneurship   definition  
seems   necessary.   Faltin   and  Ripsas   (2011)  suggest   that   the   design   of   a   business   model   is   the   core  
of  the  entrepreneurial  process.  Entrepreneurship  can  therefore  be  defined  as  the  process  of  devel-­‐
oping  an  innovative  and  value  creating  business  model,  of  starting  and  leading  a  company  to  serve  
customers  and  users  with  new  products  or  services,  and  of  changing  the  way  companies  and  peo-­‐
ple  work  and  live.  

Blank  and  Dorf  define  a  startup  “…  as  a  temporary  organization  in  search  of  a  scalable,  repeatable,  
profitable   business   model”   (Blank   and   Dorf   2012,   p.   xvii).   A   more   detailed   definition   is   given   by  
the  German  Startup  Monitor  (Ripsas  and  Tröger  2014,  p.  14)  that  defines  a  startup  as  follows:    
§ A  startup  is  a  young  company  that  is  less  than  10  years  old.      
§ A  startup  has  an  innovative  business  model  and  /  or  deploys  innovative  technologies.    
§ A  startup  shows  significant  growth  either  in  the  number  of  employees  or  in  turnover.    
The   first   criterion   and   one   of   the   last   two   criteria   have   to   be   fulfilled   by   a   company   in   order   to   be  
qualified  as  a  startup.  The  definition  of  the  German  Startup  Monitor  stresses  the  fact  that  startups  
are   not   just   young   companies   and   that   entrepreneurs   are   different   to   small   business   owners.  
Whereas  the  later  start  their  businesses  mostly  in  established  industries  and  have  the  generation  
of  a  steady  stream  of  income  as  a  goal,  entrepreneurs  who  found  startups  want  to  contribute  to  
the   change   of   an   industry   through   innovation.   The   innovation   aspect   is   also   the   reason   for   the  
ten-­‐year  threshold  which  has  been  chosen  in  order  to  include  potential  venture  capital  exits  that  
on  average  happen  after  approximately  7  years.  

2.2 From  Traditional  planning  to  Lean  Startup  

The   traditional   business   plan   implies   the   application   of   conventional   general   management   tools  
that  do  not  take  into  account  the  fundamental  differences  between  a  startup  and  an  existing  firm.  
The  underpinning  logic  of  the  business  plan  idea  was  causation.  Causation  logic  rests  on  the  no-­‐
tion   that   predictions   about   the   future   are   expected   to   be   accurate,   as   they   are   based   on   solid  
knowledge  rather  than  assumptions.  The  availability  of  accurate  information  enables  firms  to  exe-­‐
cute   a   predefined   business   model.   Following   this,   an   elaborate,   formal   business   plan   has   often  
served   as   the   central   document   to   describe   the   execution   strategy   of   startups.   However,   as   far   as  
new  venture  creation  in  the  21st  century  is  concerned,  the  circumstances  of  Knightian  uncertainty,  
Marchian  goal  ambiguity,  and  environmental  isotropy  render  irrelevant  much  of  the  information  
available  to  new  firms  (cf.  Sarasvathy  and  Dew,  2005;  Knight,  1921).    

  4  
As   a   consequence   of   the   unsatisfying   results   with   long   business   plans   the   paradigm   shift   away  
from  causation-­‐based  planning  and  towards  an  effectuation-­‐  and  “lean  startup”-­‐based  approach  
is  on  its  way.  Effectuation  logic  stipulates  a  proactive  planning  process,  involving  firms’  constant  
interaction  with  their  external  environment,  which  allows  management  to  react  to  contingencies  
and   improves   the   founders’   ability   to   deal   with   and   to   control   uncertainty   (Mauer   and   Grichnik  
2011).   The   central   insight   of   this   novel   planning   approach   is   that   in   an   entrepreneurial   setting  
founders   can   only   make   assumptions,   as   opposed   to   predictions,   about   the   various   elements   of  
their  strategy  and  business  model.  A  startup’s  initial  business  model  is  often  built  upon  (a  series  
of)  untested  hypotheses.    

Pioneers  of  this  new  approach  suggested  that  management  tools  for  startups  should  acknowledge  
the   difference   between   planning   for   new   innovative   ventures   and   planning   for   an   established  
company   with   a   “more   conventional   line   of   business”   (McGrath   and   MacMillan   1995,   p.   4).  
McGrath   and   MacMillan   introduced   the   concept   of   “Discovery-­‐Driven   Planning”   (DDP)   as   an   al-­‐
ternative  to  what  they  called  “platform-­‐based  planning”.  DDP  conceptualizes  strategy  formulation  
as  an  ongoing  learning  process  involving  uncertainty,  experimentation,  intuition,  and  discovery.  

Research  and  management  realized  that  “startups  are  not  simply  smaller  versions  of  large  com-­‐
panies”  (Blank  and  Dorf  2012,  p.  1).  The  traditional  platform,  with  its  prescriptive  planning  meth-­‐
odologies   was   developed   for   existing,   predictable   and   well-­‐understood   markets,   mainly   large  
companies,   and   is   now   replaced   by   a   step-­‐by-­‐step   concept   that   helps   to   realize   innovation   in   rap-­‐
idly  changing,  uncertain  environments.  As  mentioned  there  is  an  emerging  management  discipline  
for  which  the  main  contributors  have  coined  various  different  terms,  including  the  Science  of  En-­‐
trepreneurial   Management   (Blank   and   Dorf   2012),   Modern   Entrepreneurship   or   New   Entrepre-­‐
neurship  (Ries  2011),  Hypothesis-­‐Driven  Entrepreneurship  (Eisenmann  et  al.  2012)  or  Lean  Startup  
(Maurya  2012,  Ries  2011).  It  is  ultimately  the  distinction  between  the  execution  of  a  pre-­‐defined  
strategy  on  the  one  hand  and  the  iterative  development  of  a  new  business  model  on  the  other.  

This   new   discipline   in   entrepreneurial   management   adopts   a   dynamic   perspective   and   puts   the  
business   model   instead   of   the   business   plan   into   the   focus   of   the   entrepreneur´s   work  
(Faltin/Ripsas   2011).   Developing   innovative   business   models   is   inherently   risky   (McGrath   and  
MacMillan,   1995,   p.   4)   and   by   definition,   it   requires   entrepreneurs   and   managers   to   “envision  
what   is   unknown,   uncertain   and   not   yet   obvious   to   competition”   (ibid.,   p.   3).   It   was   in   1997   when  
Hannon   /   Atherton   pointed   out   that   while   the   planning   process   might   be   important,   the   resulting  
document,  the  business  plan,  is  not  (Hannon  and  Atherton  1997,  p.  102).  Hannon/Atherton  add  
that  the  writing  of  a  business  plan  distracts  entrepreneurs  from  working  on  the  business  model  
(ibid.,  p.  102).  

At   the   beginning   a   business   model   consists   of   a   set   of   assumptions   that   have   to   be   tested   in   mar-­‐
ket  experiments  followed  by  a  constant  process  of  iteration,  evaluation  and  adaptation  based  on  
trial-­‐and-­‐error  learning  (Maurya,  2012,  Sosna  et  al.,  2010,  Blank  2006).  As  McGrath  and  MacMil-­‐
lan   (1995)   have   argued,   “new   ventures   are   undertaken   with   a   high   ratio   of   assumptions   to  
knowledge”   (p.   4).   It   is   thus   the   goal   of   every   startup   to   reverse   this   assumption   to   knowledge   ra-­‐
tio  by  systematically  testing  the  assumptions  and  thereby  turning  them  into  knowledge.  However,  
the  notion  that  firms  should  use  their  interaction  with  the  market  to  turn  guesses  into  facts  and  to  
learn  over  time  is  not  completely  new.  As  early  as  1968  Austrian  economist  and  Nobel  Prize  lau-­‐
reate  Friedrich  August  Hayek  (1899-­‐1992)  described  competition,  “as  a  procedure  for  discovering  

  5  
facts   which,   if   the   procedure   did   not   exist,   would   remain   unknown   or   at   least   would   not   be   used”  
(Hayek,  2002,  p.  9).    

The  core  element  of  the  DDP  process  is  the  “list  of  assumptions”.  In  order  to  reduce  the  risks  in-­‐
volved  in  new  innovative  ventures  (financial  risk  for  investors;  time  and  reputation  for  the  entre-­‐
preneur)   McGrath   and   MacMillan   suggested   to   explicitly   name   all   those   aspects   of   the   future  
market  that  have  to  materialize  and  to  validate  them  one  by  one.  More  and  more  scholarly  con-­‐
sensus  within  recent  entrepreneurship  literature  indicates  that  a  prescriptive  planning  model  with  
a   rigid   business   plan   at   its   core   lacks   the   capability   to   facilitate   strategy   formulation   and   decision-­‐
making  in  the  context  of  new  venture  creation  (cf.  Ripsas  and  Zumholz,  2011;  Faltin,  2008).    

2.3 From  Lean  Startup  to  the  Proof-­‐of-­‐Concept  

So  instead  of  taking  only  one  early  investment  decision  and  investing  solely  based  on  a  business  
plan,  the  Lean  Startup  approach  with  its  focus  on  the  design  of  a  business  model  suggests  to  build  
a  venture  step  by  step  –  by  an  iterative  process  of  explicitly  formulating  and  testing  all  assump-­‐
tions.   The   Lean   Startup   idea   of   Ries   (2010)   and   Maurya   (2012)   was   inspired   by   the   pioneering  
work   of   Blank   on   Customer   Development   (2006).   Starting   an   innovative   company   knowing   that  
there  is  still  a  lot  to  be  learned  about  the  market  is  also  in  line  with  Hayeks  theoretical  idea  of  the  
market  as  a  discovery  process.  As  a  consequence  Lean  Startup  focuses  on  the  development  of  a  
sound  business  model  instead  of  the  business  plan.    

Blank’s   concept   of   Customer   Development   (Blank   2006,   see   also   figure   1)   encompasses   a   struc-­‐
tured  process  for  testing  the  hypotheses  underlying  the  business  model.  The  central  tenet  of  the  
philosophy  is  to  “get  out  of  the  building”  as  early  as  possible,  to  gather  feedback  from  potential  
users   or   buyers.   The   Lean   Startup   approach   allows   startups   to   adjust   components   of   their   busi-­‐
ness   model   in   close   to   real   time.   Failing   fast   and   cheap   is   a   mantra   in   the   startup   community.   Piv-­‐
oting,   meaning   to   adapt   the   business   model   according   to   market   reactions,   is   a   success   factor  
write  Herrmann  et  al.  (2012).    

Figure  1:     Customer  Development  Process  According  to  Blank  and  Dorf  (2012,  p.  56)

The  different  phases  of  Blank´s  Customer  Development  process  may  have  inspired  Ries  to  formu-­‐
late   the   basic   “Build-­‐Measure-­‐Learn”   feedback   pattern   (Ries   2011,   Figure   2)   and   Maurya   to   de-­‐
scribe  the  three  phases  of  a  startup  (also  Figure  2).  In  the  early  stages,  successful  startups  com-­‐
plete  the  business  model  iteration  loop  various  times  until  the  learning  and  insights  derived  from  
customer  feedback  give  enough  evidence  that  the  business  model  is  profitable  and  scalable.    

  6  
Figure  2:  Three  Stages  of  a  StartupAaccording  to  Ries  (2011,  p.  75)  and  Maurya  (2012,  p.  10)

But  still,  what   is   a  business  model  exactly?  Osterwalder  and  Pigneur´s  business  model  canvas  that  
was  influenced  by  Stähler  (2001)  and  the  Balanced  Scorecard  approach  (Kaplan  and  Norton,  1992)  
became   a   worldwide   acknowledged   approach   because   it   is   a   simple   and   visual   tool.   The   canvas  
equips  entrepreneurs  with  a  shared  language  for  analysing  and  describing  business  models  as  it  
was  intended  to  create  a  „common  visual  language  for  envisioning,  visualizing  and  talking  about  
business  ventures,  a  springboard  for  innovation“  (Osterwalder  and  Pigneur,  2010,  p.  13).  It  con-­‐
sists  of  nine  so-­‐called  building  blocks:  customer  segments,  value  proposition,  channels,  customer  
relationships,   revenue   streams,   key   resources,   key   activities,   key   partnerships,   and   cost   structure.  
Steve  Blank  and  Bob  Dorf  (2012)  point  out  to  the  fact  that  each  one  of  the  nine  building  blocks  
comprising   the   business   model   canvas   directly   translates   into   a   set   of   Customer   Development   hy-­‐
pothesis.   These   must   be   put   into   a   sound   relation   to   each   other   and   continuously   tested   and   vali-­‐
dated  to  refine  the  business  model  in  a  rigorous  and  systematic  way.  As  such,  Blank  and  Dorf  sug-­‐
gest  using  the  Business  Model  Canvas  as  a  launch-­‐pad  for  setting  up  the  hypotheses  that  are  to  be  
tested.   Thus   they   have   incorporated   the   Canvas   into   a   “scorecard”   to   visually   track   progress   as  
founders  iteratively  search  for  a  viable  business  model  –  a  first  idea  for  a  dashboard  or  cockpit.  

For  the  purpose  of  innovative  startups  the  Osterwalder/Pigneur  canvas  was  not  optimally  suited  
so   Ash   Maurya   came   up   with   a   new   canvas:   the   Lean   Canvas   that   provided   a   more   process-­‐
oriented  adaptation  of  the  canvas  (Maurya,  2012,  p.  18).  Maurya´s  Lean  Canvas  supports  founders  
not  only  in  documenting  the  business  model  but  also  in  measuring  progress  and  communicating  
the  results  with  the  company’s  stakeholders  (ibid.,  p,  12).  Ries  and  Maurya  presented  a  compre-­‐
hensive   framework   designed   to   offer   entrepreneurs   guidance   with   testing,   refining   and   scaling  
their  ideas  in  order  to  develop  a  repeatable  and  profitable  business  model.  And  although  Faltin´s  
work  is  rooted  in  a  completely  different  context  his  idea  of  the  “entrepreneurial  design”  shows  a  
lot  of  similarities  to  the  business  model  design  approach  and  the  lean  startup  concept  of  Maurya  
and  Ries  (cf.  Faltin  2008).    

It   is   worth   mentioning   that   Maurya´s   Problem/Solution   Phase   (Maurya   2012,   p.   10)   is   similar   to  
Blank´s  Customer  Discovery.  It  ends  when  founders  have  identified  a  problem  worth  solving  and  
have  defined  a  first  solution  that  potential  customers  have  validated.  The  result  is  called  a  Mini-­‐
mum  Viable  Product  (MVP).  An  MVP  conveys  the  value  proposition  of  the  intended  product  in  a  
simplified   way,   and   during   Customer   Discovery,   founders   present   a   first   version   of   the   MVP   to  
prospective  customers.  An  MVP  has  the  smallest  possible  feature  set  that  will  allow  the  product  
  7  
to  be  used  for  testing  the  hypotheses  of  the  underlying  business  model.  The  learning  and  selling  
that   takes   place   during   the   Customer   Discovery   process   should   focus   on   a   small   group   of   early  
customers  who  have  bought  into  the  founders’  vision,  the  so-­‐called  “earlyvangelists”  (Blank  and  
Dorf  2012,  p.  58).  The  term  earlyvangelists  describes  customers  who  are  willing  to  buy  products  
with   a   limited   scope   because   they   have   encountered   a   problem   and   feel   a   strong   need   to   fix   it   or  
actively   seek   to   be   the   first   to   find   a   solution.  It   is   the   return   of   those   early   customers   (retention)  
that  can  be  considered  the  proof-­‐of-­‐concept.  This  discussion  also  fits  with  Clayton  Christensen’s  
ideas  discussed  in  the  „Innovator’s  Dilemma“  with  respect  to  the  adoption  of  disruptive  technolo-­‐
gies  (see  Christensen  1997.)  

Last  but  not  least  it  is  important  to  understand  that  the  Lean  Startup  process  helps  to  reduce  the  
risks  of  financial  failures  because  the  size  of  the  next  investments  is  limited  to  what  is  necessary  
to  validate  an  assumption.  So  in  order  to  proof  that  an  innovative  a  product  or  service  will  be  ac-­‐
cepted  in  the  market,  a  startup  can  let  the  customer  test  the  innovation  early  in  the  process.  By  
offering  the  customer  an  MVP  the  entrepreneur  can  observe  and  measure  the  customer´s  reac-­‐
tion.  Thus  the  entrepreneur  gets  immediate  feedback  and  either  succeeds  or  has  to  pivot.  By  do-­‐
ing  this  a  failure  occurs  fast  and  cheap.  And  only  after  the  new  products  have  been  well  received  
by  customers  (retention),  bigger  investments  into  the  brand  or  infrastructure  (i.  e.  in  fixed  costs)  
should  be  made  (an  idea  Blank  also  included  in  his  customer  development  process).  

3 Articulation  of  a  Startup  Cockpit  

Based  on  the  aim  to  enable  startups  to  create  not  only  customer-­‐oriented  products  and  services  
but   also   a   profitable   business   model,   this   chapter   is   dedicated   to   the   articulation   of   a   Startup  
Cockpit   for   the   proof-­‐of-­‐concept.   The   process   of   developing   an   innovative   company   needs   a   flexi-­‐
ble  tool  to  track  progress  and  avoid  unnecessary  costs.    

3.1 Metrics  in  Business  Model  Accounting  of  Internet  Startups  

Eric  Ries  (2012,  p.  75)  describes  the  core  of  the  Lean  Startup  method  as  follows:  “[...]  The  products  
a  startup  builds  are  really  experiments;  the  learning  about  how  to  build  a  sustainable  business  is  
the   outcome   of   those   experiments.   For   startups,   that   information   is   much   more   important   than  
dollars,  awards,  or  mentions  in  the  press,  because  it  can  influence  and  reshape  the  next  set  of  ide-­‐
as.”  The  number  of  customers,  the  real  costs  of  goods  sold  (COGS),  the  efficiency  of  online  mar-­‐
keting  channels,  and  all  the  results  of  the  experiments  generate  data  that  help  to  verify  (or  falsify)  
the  hypotheses  the  entrepreneur  has  at  the  beginning  of  his  or  her  journey.  Similar  to  agile  soft-­‐
ware   development,   the   design   of   a   business   model   (or   entrepreneurial   design)   is   an   iterative   pro-­‐
cess  that  consists  of  several  sub-­‐processes  (“sprints”).  

The   testing   of   the   assumptions   is   carried   out   based   on   indicators   according   to   the   Lean   Startup  
method.   Ries   points   out   to   the   challenges   in   „Innovation   Accounting“:   „Unfortunately,   standard  
accounting   is   not   helpful   in   evaluating   entrepreneurs.   Startups   are   too   unpredictable   for   forecasts  
and  milestones.”  (Ries  2011,  S.  115).  Maurya  (2013,  2012)  picks  up  the  accounting  idea  and  adds  
the  AARRR-­‐Metrics  from  McClure  (AARRR  stands  for  Acquisition,  Activation,  Retention,  Revenue,  
and  Referral):  „The  power  of  these  macro  metrics  is  that  they  provide  leading  indicators  to  reve-­‐
nue  before  revenue  is  actually  realized.”  (Maurya,  2013a).  But  not  every  number  a  business  gen-­‐
erates   is   a   KPI   (key   performance   indicator)   or   a   relevant   metric.   Startups   should   focus   on   those  
  8  
metrics   that   have   a   proven   impact   on   future   results,   the   so-­‐called   „actionable   metrics“   (cf.   Ries  
2011,   p.   130).   “An   actionable   metric   is   one   that   ties   specific   and   repeatable   actions   to   observed  
results.“  (Maurya  2012,  p.  121-­‐122).    

In  line  with  this  process-­‐oriented  business  model  design  approach  Croll  and  Yoskowitz  (2013)  sug-­‐
gest  that  entrepreneurs  should  systematically  test  the  core  assumptions  underlying  their  business  
model   by   conducting   data-­‐driven   experiments   and   measuring   progress   by   using   benchmarks.  
Cooper   and   Vlaskovits   (2010)   emphasize   the   need   for   a   regular   review   of   the   assumptions   and  
point  to  the  need  for  the  development  of  measurable  criteria:  „You  can´t  test  your  hypotheses  un-­‐
til  you  create  them.  Write  down  what  you  believe  to  be  true  about  your  business  idea  and  why  it  is  
a   winning   one”.   The   objective   is   to   discover   a   scalable   and   repeatable   model   that   works   –   the  
“plan   B”   as   Mullins   and   Komisar   (2009)   called   it.   This   “plan   B”   approach   also   resonates   with  
Drucker’s  observation  that  if  “a  new  venture  does  succeed,  more  often  than  not  it  is  in  a  market  
other   than   the   one   it   was   originally   intended   to   serve,   with   products   and   services   not   quite   those  
with   which   it   had   set   out,   bought   in   large   part   by   customers   it   did   not   even   think   of   when   it   start-­‐
ed,  and  used  for  a  host  of  purposes  besides  the  ones  for  which  the  products  were  first  designed”  
(Drucker  1985,  p.  185).    

To  give  an  example  one  instrument  to  measure  an  actionable  metric  is  the  cohort  analysis  many  
Internet  startups  perform  regularly  (cf.  Maurya  2012,  p.  124-­‐126).  In  order  to  track  user  behaviour  
users  are  summarized  in  cohorts  (groups)  according  to  their  week  of  registration.  Although  other  
criteria  are  also  possible  the  week  of  registration  is  by  far  the  most  commonly  used  criterion.  With  
the   help   of   the   cohort   analysis   a   startup   can   measure   whether   certain   marketing   initiatives   led   to  
success  or  not.  

Figure  3  shows  a  cohort  analysis  that  displays  the  retention  rate  of  different  user  cohorts  of  a  real  
startup  during  a  period  of  seven  months  for  customers  that  signed  up  for  the  service  between  Oc-­‐
tober   14th   and   November   17th.   As   one   can   see   the   activity   of   the   latter   user   cohorts   is   higher   than  
the  one  of  the  earlier  what  confirms  that  the  measures  taken  during  those  weeks  were  correct.  

 
Figure  3:  Example  of  a  Cohort  Analysis  (according  to  Maurya  2013b)  

Another  example  of  experiment  is  the  split-­‐test  (or  A/B-­‐Testing):  “Although  split  testing  often  is  
thought  of  as  a  marketing-­‐specific  [...]  practice,  Lean  Startups  incorporate  it  directly  into  product  
development”  (Ries  2011,  p.  137).  For  an  A/B-­‐Test  users  are  divided  into  two  different  groups  one  
of  which  receives  the  product  with  a  new  feature  (hypothesis)  the  other  does  not.  If  the  average  
user  reaction  to  this  new  element  is  positive,  the  hypothesis  is  confirmed  and  the  new  element  
might  be  offered  to  all  customers.    
  9  
Cohort  analysis  and  A/B  test  are  just  two  examples  of  potential  tools  in  business  model  account-­‐
ing.  And  of  course  an  A/B-­‐Test  is  only  meaningful  when  there  already  is  a  high  number  of  users.  
This  kind  of  testing  is  not  new  and  a  classical  tool  in  the  marketing  departments  of  big  companies.  
The   new   dimension   is   that   because   of   the   Internet   even   startups   in   their   early   days   reach   enough  
customers  or  users  to  deploy  A/B-­‐Test  during  the  customer  development  and  /  or  business  model  
design  process.    

So   when   there   is   a   common   understanding   of   the   iterative   process   of   describing   and   building   a  
business   model   and   when   there   are   methods   to   measure   the   hypotheses   of   an   innovative   ven-­‐
ture,  what  might  a  Startup  Cockpit  look  like?  

In   order   to   understand   how   Internet   startups   apply   the   Lean   Startup   method   and   the   idea   of  
business   model   accounting,   BerlinStartupInsights   organized   an   expert   workshop   in   March   2013   in  
Berlin.  The  exploratory  and  qualitative  research  framework  called  for  four  startups  that  presented  
their  business  models  in  separate  working  groups  to  10  experts  (venture  capitalists,  serial  entre-­‐
preneurs,   business   angels,   and   researchers).   As   Stewart   et   al.   (2007,   p.41)   point   out,   focus   groups  
are  particularly  well  suited  for  exploratory  studies.    

The   startups   that   had   been   invited   to   present   at   the   workshop   had   to   be   recently   founded   and  
had  to  have  an  innovative  business  model  and  a  substantial  growth  orientation  (see  definition  in  
Ch.  2.1).  They  also  had  to  have  a  first  external  seed  financing  but  no  Series  A  (<  1Mio  €)  round  yet.  
This  last  criterion  was  to  gain  an  objective  validation  that  they  really  are  startups  in  the  sense  of  
the  definition  used  in  this  paper.    

The  startups  chosen  also  had  to  represent  different  business  models.  A  representative  from  each  
group  of  the  Croll  and  Yoskowitz  typology  (E-­‐Commerce,  Marketplace,  Software  as  a  Service,  and  
Mobile   App)   was   chosen   (cf.   Croll   and   Yoskowitz   2013,   pp.   63-­‐152).   The   task   all   groups   at   the  
workshop  had  to  solve  was  to  answer  two  questions:    

• How  can  startups  reduce  the  time  needed  for  developing  profitable  business  model?    
• Which  KPIs  should  the  startup  look  at?  

At  the  end  of  the  workshop  each  group  had  to  cluster  the  metrics  it  considered  relevant  and  had  
to  visualize  the  result.  All  discussions  were  recorded  and  transcribed  for  further  research.  

3.2 KPI-­‐Clusters  in  Online  Startups  

Figure   4   displays   the   answers   of   the   respective   working   groups   to   the   two   research   questions  
mentioned   in   Ch.   3.1.   The   KPI-­‐Clusters   are   shown   separately   for   each   business   model.   It   is   im-­‐
portant   to   mention   that,   when   it   comes   to   the   detailed   shaping   of   a   KPI   or   even   a   set   of   KPIs,   the  
cockpits   do   not   always   look   the   same.     This   reflects   the   unique   situation   of   every   startup.   But   the  
results  also  give  enough  evidence  for  the  assumption  that  there  are  common  metrics  or  at  least  
areas  of  metrics  that  every  startup  should  track.    

  10  
  
Figure  4:  Results  of  the  BerlinStartupInsights  Expert  Workshop  in  March  2013  According  to  Business  Models  
 
So,  if  the  customer´s  reaction  is  the  central  element  on  the  way  to  the  proof-­‐of-­‐concept,  the  ques-­‐
tion  is  how  startups  really  measure  this  activity.  Three  of  the  four  working  groups  created  a  clus-­‐
ter  with  a  clear  customer  focus.  But  the  specific  answer  to  the  question  “How  can  customer  activi-­‐
ty   be   measured   best?”   was   always   different.   For   a   "Real   Estate   Marketplace"   the   “Conversion  
Rate”  (“Sales  or  Engagement  Funnel”)  seemed  to  be  of  highest  relevance  whereas  for  a  "Software  
as  a  Service-­‐“startup  the  frequency  of  use  of  the  offered  service  seemed  to  be  of  elementary  im-­‐
portance.    

And  there  is  another  challenge.  Not  every  metric  with  the  same  name  is  handled  in  the  same  way  
in  two  different  startups.  A  good  example  is  the  number  of  active  customers/users  as  a  key  per-­‐
formance  indicator  because  there  is  no  objective  threshold  that  makes  a  “user"  an  “active  user”.  
For  some  startups  the  one  time  opening  of  their  app  in  a  given  period  (day,  week,  month)  makes  
an  ordinary  user  to  an  “active  user”.  Other  startups  define  that  a  customer  has  to  open  their  app  
twice  in  order  to  become  an  “active  user”.    

Concerning   the   financial   metrics   used   by   Internet   startups   it   was   obvious   that   in   the   beginning  
cash  related  KPIs  are  more  important  than  KPIs  reflecting  the  ROI.  Running  out  of  cash  before  a  
sustainable,   revenue   generating   business   model   has   been   found,   is   the   greatest   threat   to  
startups.   There   are   different   concepts   in   different   countries   (Germany´s   liquidity   first   to   third  
grade  vs.  the  USA  rule-­‐of-­‐thumb  known  as  “Time  to  out  of  Cash”  /  “Runway”)  but  the  ideas  be-­‐
hind  this  metric  are  the  same:  to  know  for  how  long  the  iterative  process  of  finding  the  right  busi-­‐
ness  model  can  be  prolonged.  The  dimension  of  the  metric  “Runway”  is  months  whereas  the  di-­‐
mension   of   the   burn   rate   (the   amount   of   money   a   startup   needs   to   pay   its   monthly   bills)   is   the  
currency  (Euro,  Dollar  …)  per  time.  Nearly  all  startups  track  their  “Runway”  and  “Burn  Rate”  in  or-­‐
der  to  ensure  that  they  have  enough  time  to  reach  the  next  development  stage.    

  11  
Last  but  not  least  there  is  the  “Process  or  Efficiency  Perspective”  where  all  kind  of  internal  per-­‐
formance  measures  become  relevant:  KPIs  of  product  quality  or  communication  efficiency.    

To  sum  it  all  up  our  analysis  revealed  that  there  may  be  three  areas  (“clusters”)  of  metrics  that  
seem  to  be  of  relevance  to  the  startups:  
§ The  Customer  Activity  (e.g.  “Customer  Satisfaction”,  “Recurring  Customers”  and/or    “Churn”)  -­‐  
Metrics  that  help  startups  to  measure  customer  activity  and  understand  how  the  customers  
perceive  the  delivered  benefits    
§ The  Financial  Perspective  (e.g.  “Liquidity”,  “Cash-­‐Flow”)  -­‐  At  the  beginning  the  financial  met-­‐
rics  are  those  that  secure  the  economic  survival  (e.  g.  liquidity  and  burn  rate);  later  there  are  
also  margin  analysis  and  ROI-­‐metrics  
§ The  Process  (or  Efficiency)  Perspective  (e.g.  “Learning  Curve”,  “Customer  Lifetime  Value”,  
“Customer  Acquisition  Costs”)  –  Indicators  (methods  and  procedures  such  as  production  qual-­‐
ity  and  process  efficiency)  that  help  to  improve  efficiency  
As  a  result  of  our  analysis  we  found  that  the  business  model  is  not  the  only  influencing  factor  to  
the  metrics  to  be  tracked  in  a  Startup  Cockpit.  In  total  there  are  four  factors  (determinants)  that  
seem   to   have   a   direct   influence   on   the   KPI   clusters   a   startup   should   use   for   business   model  
accounting:  the  development  stage,  the  business  model,  the  strategy,  and  the  financing  structure.  
One   example   for   the   growth   strategy   influencing   the   metrics   to   be   observed   is   the   decision  
whether  the  startup  management  should  focus  on  market  share  or  profitability.  Further  research  
will  have  to  clarify  on  whether  this  desicion  itself  depends  on  the  interests  of  the  investors  and  
therefore  on  the  financing  structure.    

 
Figure    5:  Determinants  of  KPI  Clusters  in  Online  Startups    

So  which  metrics  excatly  form  a  Startup  Cockpit?  As  often  in  business  the  answer  is:  it  depends.  
The   learning   from   the   literature   analysis   and   the   empirical   research   is,   that,   without   doubt,  
startups  should  try  to  measure  progress  and  keep  track  of  their  numbers.  But  there  is  no  general  
rule   for   a   cockpit.   The   most   important   cluster   in   a   startup´s   cockpit   is   customer   activity   (and  
satisfaction).   Using   IT   and   Big   Data   is   sometimes   necessary   and   helpful   –   for   some   business  
models   it   is   not.   Measures   can   also   be   saved   in   a   simple   excel   file   or   are   even   subjectively  
perceived  by  the  entrepreneur.  And  similar  results  can  be  found  for  the  other  two  clusters.  Not  to  
forget  that  the  four  determinants  have  a  substantial  influence  on  which  metrics  to  choose.    

The   lesson   is   clear.   It   is   more   important   to   establish   a   culture   of   “build-­‐measure-­‐learn”   than   to  

discuss  whether  it  is  really  an  actionable  metric  or  not.  In  order  to  reach  proof-­‐of-­‐concept  faster  
and   with   less   risks   entrepreneurs   should   apply   the   idea   of   building   an   own   business   model  

  12  
accounting   tool   and   keep   track   of   their   customers   activity,   the   financial   situation,   and   the  
efficiency.   They   have   to   learn   fast   and   the   good   founders   will   soon   find   out   what   the   right  
measures  are  in  their  situation    

4 Possibilities  and  Limitations  of  Startup  Cockpits  

The  idea  behind  the  cockpit  approach  is  to  help  entrepreneurs  to  test  their  assumptions  early  in  
the  process  of  developing  the  business  model.  A  Startup  Cockpit  can  be  an  integral  part  of  a  new  
type   of   well-­‐shortened   business   plan   as   entrepreneurs   seem   to   prefer   metric-­‐based   tools   over  
text-­‐oriented   business   plans   that   are   too   complex   to   be   updated   easily.   The   classical   40-­‐   to   60-­‐
pages  business  plan  represents  mainly  the  interests  of  the  investors  and  might  become  a  relic  of  a  
bygone  era  –  at  least  for  the  early  days  of  a  (lean)  startup.    

It   needs   an   iterative   process   of   searching   for   the   proof-­‐of-­‐concept   based   on   the   ideas   of   Blank  
(Customer   Development),   Ries   (“Build-­‐Measure-­‐Loop”),   and   Maurya   (Product-­‐/Market-­‐Fit).   We  
call  for  measurable  results  in  the  market  discovery  process  and  for  easy-­‐to-­‐adapt  planning  tools.  
The  three  KPI  clusters  of  our  “Startup  Cockpit”  can  be  considered  a  more  generic  version  of  the  
AARRR   “macro   metrics”   (cf.   Croll   and   Yoskowitz   2013,   p.   46).   Generally   speaking,   today   nearly  
every  startup  is  able  to  observe  its  customer  activity,  sometimes  well  before  the  buying  act.  Mod-­‐
ern  technology  is  offering  low  cost  tools  even  for  offline  retailers  (e.  g.  mobile  location  analytics  
for   retailer´s   point-­‐of-­‐sale   or   the   tracking   of   their   own   brand   in   social   media).   Not   using   these  
tools   might   become   a   disadvantage   on   the   way   to   the   proof-­‐of-­‐concept   as   not   understanding   the  
customer   as   fast   as   possible   might   lead   to   longer   business   development   processes   and   higher  
costs.  

The  search  for  KPIs  and  accounting  tools  in  the  field  of  SME  and  startups  is  not  new.  Because  of  
the   tremendous   number   of   variables   to   the   entrepreneurial   success   and   a   myriad   of   different  
business  models  and  strategic  interests  a  one-­‐size-­‐fits-­‐all  solution  of  a  Startup  Cockpit  is  not  very  
likely.  On  the  other  hand,  modern  technology  enables  even  very  small  companies  to  process  a  big  
amount   of   data   and   in   the   same   way   all   drivers   of   a   car   put   their   main   focus   on   a   few   displays  
(speed,  engine  temperature,  gasoline)  an  entrepreneur  has  to  find  his  /  her  individual  set  of  KPI.  
Our   Startup   Cockpit   is   a   first   selection   of   priorities.   Although   is   it   built   on   a   small   number   of  
startups   it   does   match   our   observation   of   how   startups   measure   their   way   to   the   proof-­‐of-­‐
concept.    

Further  research  will  have  to  show  whether  it  is  possible  to  identify  more  key  performance  indica-­‐
tors  that  are  relevant  to  all  startups.  One  example  is  liquidity  as  a  traditional  KPI  in  the  financial  
cluster.   Although   Internet   startups   coined   a   new   term   (runway),   the   idea   remains   the   same.   All  
entrepreneurs   have   to   know,   at   any   given   point   in   time,   how   long   their   financial   resources   last.  
Not   being   able   to   pay   a   bill   puts   the   company   in   danger.   On   the   other   hand   understanding   the  
customers   earlier   than   competitors   puts   you   in   better   position   and   might   lead   to   strategic   ad-­‐
vantages  that  are  even  more  important  than  short-­‐term  financial  goals.    

The  best  an  entrepreneur  can  do  is  to  develop  a  sense  of  urgency  for  metrics.  Apart  from  the  pas-­‐
sion  for  the  product  or  service  the  entrepreneur  needs  to  deal  with  numbers  and  needs  to  under-­‐
stand  the  economical  logic  of  his  or  her  business.  
   

  13  
5 References    
 
Blank,  S.  G.  (2006).  The  Four  Steps  to  Epiphany.  San  Mateo:  cafepress.com.  
Blank,  S.  G.  and  Dorf,  B.  (2012).  The  Startup  Owner’s  Manual  –  The  Step-­‐by-­‐Step  Guide  for  Building  a  Great  
Company.  First  Edition.  Pescadero,  California:  K&S  Ranch.    
Cooper,  B.  and  Vlaskovits,  P.  (2010).  The  Entrepreneur’s  Guide  to  Customer  Development.  E-­‐book  Kindle  
version  Self-­‐published:  http://custdev.com/.  
Cristensen,  C.  (1997):  The  Innovator´s  Dilemma  -­‐  When  New  Technologies  Cause  Great  Firms  to  Fail.  Har-­‐
vard  College  Press  
Croll,  A.  and  Yoskowitz,  B.  (2013).  Use  Data  to  Build  a  Better  Startup  Faster.  California:  O'Reilly  Media.  
Drucker,  P.  (1985).  Innovation  and  Entrepreneurship:  Practice  and  principles.  New  York:  Harper  &  Row.    
Eisenmann,  T.,  Ries,  E.  and  Dillard,  S.  (2012).  Hypothesis-­‐Driven  Entrepreneurship:  The  Lean  Startup,  Har-­‐
vard  Business  Review,  March  2012.    
Faltin,  G.  (2008).  Kopf  schlägt  Kapital.  München:  Carl  Hanser  Verlag.    
Faltin,  G.  and  Ripsas  S.  (2011).  The  entrepreneurial  design  as  the  core  aspect  of  Entrepreneurship.  Unpubli-­‐
shed  english  version  based  on  „Das  Gestalten  von  Geschäftsmodellen  als  Kern  des  Entrepre-­‐
neurship,  Working  Paper  Institute  of  Management  Berlin  04/2011.  
Faltin,   G.   (2013).   Brains   Versus   Capital:   Entrepreneurship   for   Everyone   -­‐   Lean,   Smart,   Simple.   Berlin:  
Stiftung  Entrepreneurship.  
Glaser,  B.  and  Strauss,  A.  (2012).  The  Discovery  of  Grounded  Theory.  Strategies  for  Qualitative  Research,  
7th  ed.  originally  published  1967.  New  Jersey:  Transaction  Publishers.  
Hannon,   P.   D.,   Atherton,   A.   (1997).   Small   firm   success   and   the   art   of   orienteering:   the   value   of   plans,   plan-­‐
ning,  and  strategic  awareness  in  the  competitive  small  firm.  In:  Journal  of  small  Business  and  
Enterprise  Development,  Vol.  5,  No.2,  p.  102-­‐119.  
Hayek,  F.  A.  (2002).  Competition  as  a  Discovery  Procedure.  Translated  from  the  original  (Hayek,  1968)  by  
Marcellus  S.  Snow.  The  Quarterly  Journal  of  Austrian  Economics,  p.  9-­‐  23.  
Herrmann,  B.  L.,  Marmer,  M.,  Dogrultan,  E.  and  Holtschke,  D.  .  (2012).  Startup  Ecosystem  Report  2012,  
Part  One,    http://cdn2.blog.digital.telefonica.com.s3.amazonaws.com/wp-­‐
content/uploads/2012/11/Startup-­‐Ecosystem-­‐Report-­‐2012.pdf    
Kane,  T.  (2010).  The  importance  of  startups  in  job  creation  and  job  destruction.  Kauffman  Foundation  Re-­‐
search  Series:  Firm  Formation  and  Economic  Growth  (July).  
Kaplan,   R.   and   Norton,   D.   (1992).   The   balanced   scorecard–measures   that   drive   performance.   Harvard   Busi-­‐
ness  Review,  70,  71-­‐79.  
Kirzner,  I.  M.,  (1973).  Competition  and  Entrepreneurship.  University  of  Chicago  Press.  
Knight,  F.H.  (1921).  Risk,  Uncertainty,  and  Profit.  Boston,  Massachusetts:  Hart,  Schaffner  &  Marx;  Houghton  
Mifflin  Company.  
Marmer,  M.,  Herrmann,  B.  L.,  Dogrultan,  E.  Berman,  R.,  (2012).  Startup  Genome  Report  Extra  on  Prema-­‐
ture  Scaling.  
http://gallery.mailchimp.com/8c534f3b5ad611c0ff8aeccd5/files/Startup_Genome_Report_ve
r  sion_2.1.pdf.,  accessed  on  08.09.2014  
Mauer,  R.  and  Grichnik,  D.  (2011).  Dein  Markt,  das  unbekannte  Wesen:  Zum  Umgang  mit  Marktunsicher-­‐
heit  als  Kern  des  Entrepreneurial  Marketing.  In:  Zeitschrift  für  Betriebswirtschaft,  Special  Issue  
on  Entrepreneurial  Marketing,  p,  59-­‐82.  
Maurya   A.   (2012).   Running   Lean   –   Iterate   from   Plan   A   to   a   Plan   That   Works.   Second   Edition.   Sebastopol,  
California:  O’Reilly  Media.    
Maurya,  A.  (2013a).  Innovation  Accounting,  http://practicetrumpstheory.com/innovation-­‐accounting/,  ac-­‐
cessed  on  15.07.2014.  
Maurya,  A.  (2013b):  3  Rules  to  Actionable  Metrics  in  a  Lean  Startup,  
http://practicetrumpstheory.com/2010  /07/3-­‐rules-­‐to-­‐actionable-­‐metrics/,  accessed  at:  
01.04.2013.    
McClure,  D.  (2007).  Startup  Metrics  for  Pirates:  AARRR!,  
http://500hats.typepad.com/500blogs/2007/09/startup-­‐metrics.html,  accessed  on  
15.08.2014  
McGrath,  R.  G.  and  MacMillan,  I.  C.  (1995).  Discovery  Driven  Planning.  Harvard  Business  Review,  73.,  p.  44.  
Mintzberg,  H.  (1990).  The  design  school:  Reconsidering  the  basic  premises  of  strategic  management.  Stra-­‐
tegic  Management  Journal,  11(3),  171-­‐195.  
  14  
 Müller-­‐Stewens,  G  and  Lechner,  C.  (2011):  Strategisches  Management,  4.  Aufl.,  Stuttgart:  Schäffer  Poeschel  
 
Mintzberg,  H.  and  Waters,  J.  (1985).  Of  strategies,  deliberate  and  emergent.  Strategic  management  journal,  
Wiley  Online  Library,  p.  257-­‐272.  
Mullins,   J.   and   Komisar,   R.   (2009).   Getting   to   Plan   B:   Breaking   through   to   a   better   business   model.   Boston,  
Massachusetts:  Harvard  Business  School  Press.  
Osterwalder,   A.   and   Pigneur,   Y.   (2010).   Business   model   generation:   a   handbook   for   visionar-­‐   ies,   game  
changers,  and  challengers.  Hoboken,  New  Jersey:  Wiley.  
Ries,   E.   (2008).   Principles   of   Lean   Startups,   presentation   for   Maples   Investments.   Online   available   at:  
http://www.startuplessonslearned.com/2008/11/principles-­‐of-­‐lean-­‐startups.html.    
Ries,  E.  (2011).  The  Lean  Startup:  How  Today’s  Entrepreneurs  Use  Continuous  Innovation  to  Create  Radical-­‐
ly  Successful  Businesses.  New  York:  Crown  Business.  
Ripsas,  S.  and  Tröger,  S.  (2014).  Deutscher  Startup  Monitor  2014.  Published  by  KPMG  Deutschland,  Berlin.  
Ripsas,  S.,  Vossler,  J,  and  Tegge,  C.  (2013).  Lean  Business  Model  Development  for  Startups  –  The  Case  of  
Instagram.  Unpublished  working  paper.  Berlin  School  of  Economics  and  Law.  
Ripsas,   S.   and   Zumholz,   H.   (2011).   Die   Bedeutung   von   Business   Plänen   in   der   Nachgründungsphase.   Corpo-­‐
rate  Finance  Biz,  p.  435-­‐444.  
Sarasvathy,  S.  (2008):  Effectuation:  Elements  of  Entrepreneurial  Expertise.  Cheltenham:  Edward  Elgar.  
Sarasvathy,  S.  and  Dew,  N.  (2005).  New  market  creation  through  transformation.  Journal  of  Evolutionary  
Economics,  Springer,    p.  533-­‐565.  
SBA  Office  of  Advocacy  (2012).  Frequently  asked  Questions.  U.S.  Small  Business  Administration,  Office  of  
Advocacy.  Online  available  at:  http://www.sba.gov/advocacy/,  accessed  on  17.07.2012.    
Sosna,   M,   Trevinyo-­‐Rodriguez,   R   and   Ramakrishna   Velamuri,   S.     (2010).   Business   model   innovation  
through   trial-­‐and-­‐   error   learning:   The   Naturhouse   case.   Long   Range   Planning,   Elsevier,     p   .  
383-­‐407.  
Stähler,  P.  (2001).  Geschäftsmodelle  in  der  digitalen  Ökonomie:  Merkmale,  Strategien  und  Auswirkungen,  
Academic  Dissertation,  University  of  St.  Gallen  HSG.    
Stevenson,  H.,  Roberts,  M.  J.  and  Grousbeck,  H.  I.  (1994).  New  Business  Ventures  and  the  Entrepreneur.  
Boston:  IRWIN.  
Systrom,  K.  (2010).  What  is  the  genesis  of  Instagram?  Post  on  Quora  by  the  CEO  and  co-­‐founder  of  Insta-­‐
gram.   Online   available   at:   http://www.quora.com/Instagram/What-­‐is-­‐the-­‐genesis-­‐of-­‐
Instagram.  
 

  15  
View publication stats