To get out of the building or not? That is the question: The benefits (and costs) of customer involvement during the startup process
Newbert, S; Tornikoski, E; Augugliaroa, J
Date: 17 November 2020
Journal
Journal of Business Venturing Insights
Publisher
Elsevier
Publisher DOI
Abstract
Nascent entrepreneurs are frequently advised to “get out of the building” and consult with
customers before any serious efforts to develop a new product or service are undertaken so they
can understand what their potential customers really want/need. Despite the intuitive nature of
this advice, it lacks theoretical and empirical ...
Nascent entrepreneurs are frequently advised to “get out of the building” and consult with
customers before any serious efforts to develop a new product or service are undertaken so they
can understand what their potential customers really want/need. Despite the intuitive nature of
this advice, it lacks theoretical and empirical bases. As such, the worldwide popularity of the
movements this approach has spawned, such as Customer Development and Lean Startup, seems
to rest on the unfounded assumption that the benefits of involving customers outweighs the costs.
Thus, we theorize about the pros and cons of involving customers early on in the startup process
and empirical test our model using data from the PSED II. Our findings suggest that while
involving customers early will help entrepreneurs create offerings customers are willing to pay
for, it also results in potentially costly delays in the launch of those offerings. We also find that
these benefits and costs are magnified when innovativeness is high.
Management
Faculty of Environment, Science and Economy
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