Many debate whether entrepreneurship is simply an art or a science that can be taught. University of Utah faculty member Todd Zenger has an answer: it can definitely be taught as a science, but the scientific approach you choose matters, and through ongoing research, he is exploring the most effective one.
Zenger’s professional life has been dedicated to academics. Graduating with degrees from Stanford University and UCLA, Zenger spent the following years developing his expertise in the fields of strategy, entrepreneurship, and organizational design. He is widely published in various research publications and journals.
Now, as a faculty member in the Department of Entrepreneurship and Strategy and one of the original designers of the Master of Business Creation program at the David Eccles School of Business at the University of Utah, he continues to investigate how entrepreneurs can be more effective.
“A Scientific Method for Startups” is one of his latest research efforts, published in the Journal of Management. This ongoing research poses a question: what can a founder do to increase the probability that their entrepreneurial venture will be successful?
The paper posits that we need a “scientific method” for startups. Zenger and his colleagues then highlight the lean startup and theory-based approaches as two leading scientific approaches in entrepreneurship and make a case for the superiority of the latter one.
The lean startup movement argues that entrepreneurs should jump quickly into customer interaction, building a minimum viable product to facilitate this. Doing so, they say, reduces “information asymmetries between entrepreneurs and customers.”
“(Lean startup believes that) customers have vital information or knowledge that a startup needs to somehow elicit, access, or incorporate into their nascent product, service, or value offering,” Zenger and his coauthors write. The lean startup belief is that “The sooner the entrepreneur engages with the customer, the quicker this information asymmetry can be reduced.”
Founders then quickly learn from their environments and adapt – getting ideas from consumers, developing products, soliciting feedback, updating the products, until the startup either launches or shutters.
For the lean startup, customer feedback is “a form of lookup table for the validated truth,” the article said.
The theory-based perspective takes a very different approach, arguing that a founder’s role is to find an unsolved problem and compose a novel theory about how to solve it, Zenger and his coauthors argue.
“From a theory-based perspective, entrepreneurs do not want to (just) mirror their environments … entrepreneurial decision-making necessarily aspires to be generative,” the article said. An entrepreneur’s aim is often to solve a problem that customers don’t recognize they have or to deliver a solution they have never even considered. “Startups are essentially trying to render something true that is currently untrue … seeking to create sources of value” with which customers are quite unfamiliar. While lean startup pushes entrepreneurs to develop rather incremental new products that are easily built into MVPs to which customers can respond, the theory-based perspective pushes entrepreneurs to articulate causal paths to solutions to novel problems that are more difficult to quickly address through MVPs and customer feedback.
In the theory-based approach, entrepreneurs are encouraged to lean into their contrarian beliefs. Steve Jobs’ belief that computers would become a mass-market product is an example of this.
“(This) contrarian belief was central for initiating the process of value creation,” the article said. “At this point in time, it was by no means obvious that personal computers would become a mass-market product. The data at the time seemed to suggest that Jobs’ belief in the possibility of personal computers was wrong, if not delusional.”
While lean startup is a less conceptual process that is inherently easier to implement, Zenger and his co-authors developed a practical framework for the theory-based view called “the Value Lab.” The Value Lab asks entrepreneurs to take up three conversations where they articulate their beliefs, frame problems based on those beliefs, and develop a causal logic for how to create value.
“The theory-based view of startups is a form of ‘meta’-theory that does not prescribe or emphasize any one way of validation, experimentation, team building, or governance,” the article said. “Rather, (it provides) entrepreneurs with the scaffolding to come up with their own theory and startup-specific causal logic, and then to align or ‘match’ the right activities and practices to validate and compose value with that theory.”
Various randomized control trials and empirical studies cited throughout the article validate this point – “training startups to develop their own theory of value will yield the best results,” it concludes.
As Zenger continues to examine approaches to entrepreneurship, the goal remains the same: build “normative models to help startups improve their decision-making and performance outcomes.”
