Chapter 3 New Venture Planning and Lean Start-up Activities: A Longitudinal Empirical Study of Entrepreneurial Success, Founder Preferences and Venture Context

In this chapter, we examine two theorized approaches to entrepreneurial activity: experiential versus prediction based strategies. We empirically assess the comparative performance of several commonly recommended approaches – researching customer needs, researching the competitive landscape, writing a business plan, conceptually adapting the business plan or experimentally adapting the primary business activity. We found that the majority of nascent entrepreneurs began with a business plan, but only about a third adapted their plan in later stages. We also found that talking with customers and examining the competitive landscape were normative activities. Those who started a plan were more likely to create a venture, although the effects much stronger for those who changed their plan later on, as well as for those who researched customer needs. Our results show that the selection of these activities is both ubiquitous and driven by pre-start-up experience and new venture characteristics. The activities themselves do not robustly link with successful new venture foundation. Hence, pre-start-up experiences, venture characteristics, and the institutional environment are more important in explaining successful performance than recommended activities. Implications for research, practice, and pedagogy are discussed.