Who Learns Fastest,Wins: Lean Startup and Discovery Driven Growth

Abstract

Most entrepreneurial ventures fail. Most corporate ventures fail too, often more expensively. Against this backdrop, Lean Startup and Discovery-Driven Growth (DDG) are methods that emphasize rapid learning, resource parsimony, and an intense focus on validating assumptions as ways of reducing the cost and risk of failure. Lean Startup had its roots in and makes a contribution to entrepreneurship; Discovery-Driven Growth emerged instead from the study of corporate innovation efforts. Both acknowledge that planning methods based on low-uncertainty situations fall short when faced with high-uncertainty contexts. DDG suggests five design steps that interact: defining success, checking for realism, defining operations, documenting assumptions, and planning through checkpoints. Similar to Lean Startup, it emphasizes an experimental approach to learning. Different than Lean Startup, it is less prescriptive about the method and embraces wider uncertainties than Lean Startup's focus on product-market fit. In a context that has been described as an “innovation arms race,” both methods are a major advance over traditional planning processes because they both emphasize rapid learning. As is rapidly becoming clear, in more and more parts of the evolving digital economy, whoever learns the fastest wins.