Strategic Management Review > Vol 1 > Issue 2

The Interplay Between Open Innovation and Lean Startup, or, Why Large Companies Are Not Large Versions of Startups

Henry Chesbrough, Faculty Director, Garwood Center for Corporate Innovation, Haas School of Business, University of California, Berkeley, USA, chesbrou@haas.berkeley.edu Christopher L. Tucci, Imperial Business School, Imperial College London, UK, christopher.tucci@imperial.ac.uk
 
Suggested Citation
Henry Chesbrough and Christopher L. Tucci (2020), "The Interplay Between Open Innovation and Lean Startup, or, Why Large Companies Are Not Large Versions of Startups", Strategic Management Review: Vol. 1: No. 2, pp 277-303. http://dx.doi.org/10.1561/111.00000013

Publication Date: 16 Jun 2020
© 2020 now Publishers, Inc.
 
Subjects
Competitive strategy,  Collaborative strategy,  Corporate strategy,  Knowledge, innovation, and technology,  Organization and strategy
 
Keywords
Knowledge, innovation, and technologyorganization and strategycorporate strategycollaborative strategycompetitive strategy
 

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In this article:
An Introduction to Lean Startup
Lean Startup in Large Corporations: Tensions and Paradoxes
What Lean Startup Contributes to Open Innovation
What Open Innovation Contributes to Lean Startup
Conclusion
Acknowledgements
References

Abstract

This article considers the contribution of lean startup to the lack of practical advice for employing inside-out knowledge flows in open innovation. Lean startup offers a series of practical steps for exploring — and validating — potential new business models that might utilize otherwise neglected technologies, or potential general-purpose technologies that may be languishing. Open innovation has some contributions to offer to lean startup as well, particularly in the context where lean startup is employed inside large established firms. We describe the basic principles of lean startup philosophy and discuss how lean startup is implemented in large companies. This is highly related to business model reconfiguration, since in many cases, incumbent companies develop a new business model as part of their innovation efforts, often with great difficulty. This line of reasoning leads us to reconsider how lean startup might work in established companies, and why it is so difficult due to conflicts with many roles that already exist in the established companies. We then bring forward the idea that open innovation can contribute to the corporate venturing process and describe both outside-in and inside-out processes that may help ease the pain of a lean startup implementation in an incumbent firm.

DOI:10.1561/111.00000013

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Strategic Management Review, Volume 1, Issue 2 Special issue on Open Innovation
See the other articles that are part of this special issue.