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IJEBR
23,5
812
Received 23 June 2016
Revised 14 December 2016
13 February 2017
Accepted 10 March 2017
International Journal of
Entrepreneurial Behavior &
Research
Vol. 23 No. 5, 2017
pp. 812-838
© Emerald Publishing Limited
1355-2554
DOI 10.1108/IJEBR-06-2016-0195
Enacting the lean
startup methodology
The role of vicarious and experiential
learning processes
Yashar Mansoori
Department of Entrepreneurship and Strategy,
Division of Technology Management and Economics,
Chalmers University of Technology, Göteborg, Sweden
Abstract
Purpose – The purpose of this paper is to examine how the instructions of the lean startup methodology
influence entrepreneurs. It explores what happens when such instructions are enacted by entrepreneurs in the
context of a “prescriptive accelerator”. The goal is to shine a light onto the mechanisms by which these
instructions are acquired and then utilised by entrepreneurs and to outline in some detail the implications of
adhering to the lean startup methodology.
Design/methodology/approach – This paper employs an in-depth phenomenological semi-structured
interview design. Two rounds of interviews were conducted, one at the beginning and one at the end of the
programme with the CEOs and founders of 11 entrepreneurial ventures, totalling 22 interviews. The analysis
of the interviews resulted in five second-order themes that are discussed in light of the processes of
experiential and vicarious learning.
Findings – The findings suggest that through two distinct modes of vicarious and experiential learning, the
instructions of the lean startup methodology are acquired, internalised and consequently put into practice by
entrepreneurs. The paper further highlights the modifications to entrepreneurs’ governing variables and
action strategies, as well as the resulting consequences of these modifications. This provides insights into
possible outcomes of following the lean startup methodology in the context of a prescriptive accelerator where
a strong focus on adhering to a systematic entrepreneurial methodology is a characteristic feature.
Originality/value – This paper contributes to our understanding of the under-studied and novel phenomena
of the lean startup methodology and prescriptive accelerators. It complements the prevailing understanding
of entrepreneurial learning as being largely experiential by accounting for the vicarious learning processes
that occur in pedagogical settings such as prescriptive accelerators. It therefore shows that prescriptive
accelerators provide unique learning situations where the combination of vicarious and experiential learning
impacts the business development activities. Further, it provides a model of entrepreneurs’ theory of action as
the outcome of the interactions between the lean startup methodology and the two modes of vicarious and
experiential learning.
Keywords Experiential learning, Entrepreneurial learning, Entrepreneurs’ theory of action,
Prescriptive accelerators, The lean startup methodology, Vicarious learning
Paper type Research paper
Introduction
Scholarly calls for the development of systematic entrepreneurial methods (Fiet, 2001;
Neck and Greene, 2011; Sarasvathy and Venkataraman, 2011; Wiklund et al., 2011) have
resulted in a number of prescriptive contributions. These contributions include but are not
limited to several attempts developed in isolation by scholars (McGrath and MacMillan,
2000; Sull, 2004; Fiet, 2007) and practitioners (Brown, 2008; Ries, 2011; Blank and
Dorf, 2012). In these contributions, the recently introduced lean startup methodology that
rejects long-term planning and embraces experimentation and iterative learning has
attracted much attention from entrepreneurs, practitioners and academics (Ries, 2011;
Eisenmann et al., 2012; Harms, 2015). A growing number of prominent entrepreneurship
programmes (e.g. Stanford University, Harvard Business School, Berkeley, Columbia
University) and accelerators (e.g. Techstars, 500 Startups, Y Combinator) have begun to
favour the use of the lean startup methodology over business planning approaches Enacting the
(Christiansen, 2009; Blank, 2013). These programmes explicitly encourage and, in some lean startup
cases, require students and entrepreneurs to follow and adhere to the instructions of the lean methodology
startup methodology (Ladd et al., 2015; Hallen et al., 2016). However, largely due to having
been neglected by academic communities, there is very little insight into how these
instructions are manifested in reality. The prevalence of the lean startup methodology and
the lack of understanding of its impact on entrepreneurs demonstrate the need for studies 813
addressing this issue.
Against this backdrop, a phenomenological interview-based approach is employed to
explore what happens and how it unfolds when the instructions of the lean startup
methodology are enacted in the context of a “prescriptive accelerator” – an accelerator that is
structured and organised by a clear prescriptive approach. In total, 22 semi-structured
interviews with CEOs and founders of 11 startups as part of a national accelerator programme
provided insights into the impact of participating in the pedagogical context of a prescriptive
accelerator. The findings reveal that the changes to the entrepreneurs’ thinking and actions
were the result of the interplay between the lean startup methodology and two distinct modes
of learning, namely, vicarious and experiential learning processes. The paper presents a model
that demonstrates the outcome of this interplay between vicarious and experiential learning
resulting in the entrepreneurs’ theory of action which is, to a large extent, in line with the
explicit instructions of the lean startup methodology. Taken together, the findings of this study
make two major contributions. First, by exploring the novel empirical phenomenon of
“prescriptive accelerators”, the findings shine a light on how entrepreneurs internalise the
vicariously and experientially accumulated knowledge. Second, the paper makes a contribution
to the entrepreneurial learning literature. It provides insights into the learning mechanisms
that denote the process through which entrepreneurs adhere to instructions, adopt new
governing variables and action strategies and, therefore, update their theories of action.
The paper is organised as follows: the next section provides a brief review of vicarious
and experiential modes of learning, and Argyris and Schön’s theory of action. Next,
a section on research methodology including the research setting, research design and data
analysis is presented. This is followed by a detailed presentation of the findings of this
study along five salient themes. Thereafter, the analysis section elaborates on the
descriptive findings that provide the foundation for the discussion section focussing on the
analysis of the findings in light of theory. Finally, the implications of this research and
future research opportunities are outlined.

Theoretical framework
Vicarious learning in entrepreneurial settings
As people are capable of learning through modelling the behaviours of others, a great deal of
knowledge acquisition and subsequent learning occurs in a vicarious[1] manner (Holcomb et al.,
2009). Research has shown that people learn complex behaviours through observation (Nadler
et al., 2003) and that they then employ the coded knowledge as a reference for future actions.
It is also suggested that individuals learn more frequently in a vicarious way by observing
others’ successes and failures than from personal experiences (Bandura, 1965), specifically in
settings where uncertainty and ambiguity are prevalent (e.g. entrepreneurship). Bandura (1977,
p. 392) asserts that virtually “all learning phenomena resulting from direct experiences” can
take place in a vicarious mode of learning. This is specifically present in pedagogical contexts,
such as prescriptive accelerators, where entrepreneurs are exposed to many second-hand
experience episodes. This exposure helps them to avoid the cost of and obtain the benefits of
the accumulated experience and knowledge of other entrepreneurs (Kim and Miner, 2007).
In situations that are specifically unfamiliar and uncertain, vicarious learning can provide a
better and faster path to action than direct experiences (Holcomb et al., 2009). This is due to the
IJEBR undivided attention that entrepreneurs can allocate to specific situations, rather than dividing it
23,5 between observations and forming connections between action and outcomes. The experiences
of others create legitimacy and a standard that can mimic those gained from personal
experiences (Wood and Bandura, 1989). The primary basis of vicarious learning is the process
of “acquiring, developing or altering” existing patterns of behaviour (Gioia and Manz, 1985).
Vicarious learning can be facilitated in various ways. In the early stages of business
814 development, providing entrepreneurs with a context that offers some type of social support
is critical to facilitate learning. The process of learning in a social setting is determined by
how intentional and unintentional learning episodes are created and come to be (Brockbank
and McGill, 2006). Previous research suggests that in pedagogical situations where
vicarious activities precede direct experience, performance is enhanced (Hoover et al., 2012).
Therefore, various social activities can create a dynamic where entrepreneurs not only
reflect on their own but also on other entrepreneurs’ progress by listening to and discussing
it with them (Lévesque et al., 2009). This process of listening, reflecting and sharing is
influential in what is learned and how it is learned. Participating in educational lectures and
workshops can be seen as a means of facilitating vicarious learning (Bingham and Davis,
2012; Hallen et al., 2016). The learning can be both in the form of anecdotes and specific
experiences from the knowledge acquired through past experiences. There is a plethora of
opportunities for formal vicarious learning through participation in lectures and workshops
and informal vicarious learning through interacting with other entrepreneurs and investors
(Hallen et al., 2016). In the following section, a second mode of learning in entrepreneurial
settings, experiential learning, is briefly reviewed.

Experiential learning in entrepreneurial settings

Experiences account for a great deal of individual learning and development (Morrison and
Brantner, 1992). Experiential learning is viewed as the transformation of experiences into
knowledge, where knowledge structures are formed through the continuous interaction
between prior knowledge and new experiences (Kolb, 1984). This is achieved through
individuals internalising the experiences by making those specific experienced episodes
their own (Kolb et al., 2001; Kolb and Kolb, 2005). Research on entrepreneurial learning
suggests that much of the learning that occurs in entrepreneurial contexts can be considered
experiential (Minniti and Bygrave, 2001; Rae and Carswell, 2001; Cope, 2003; Politis, 2005).
This learning process is widely understood as a process that is situated in certain
entrepreneurial situations and contexts (Gibb, 1997; Rae, 2005; Cope, 2005b; Huovinen and
Tihula, 2008) and is conceptualised as a circular process where entrepreneurs move between
different phases of learning such as from acting to reflecting and from reflecting to
conceptualisation (Corbett, 2005). It is important to note that this learning is the learning
that is experienced by entrepreneurs during business development activities rather than a
particular style of learning distinguishable from other styles of learning (Ravasi and
Turati, 2005). For the experiences to be useful to entrepreneurs, they need to go through
certain processes of acquiring and assimilating.
During the process of acquiring and assimilating a method, a great deal of conversion from
the explicit instructions of the method into practical steps occurs (Nonaka et al., 1996). Prior
research suggests that this conversion process requires updating the beliefs and behaviours of
entrepreneurs in order to accommodate the necessary knowledge development (Politis, 2005;
Argyris, 1997; Tsai and Lee, 2006). Internalisation (a process including acquiring and
assimilating) of the instructions of an entrepreneurial method can, therefore, be understood as a
gradual process that feeds into the ensuing experiences (Landa, 1999). Research has also
emphasised that higher-level learning (Fiol and Lyles, 1985) occurs when entrepreneurs’
experiences force them to review their beliefs as well as their concrete behavioural patterns
and, if necessary, revise them (Argyris and Schön, 1978; Kolb and Kolb, 2009). Participation in a
prescriptive accelerator exposes entrepreneurs to a learning context where their fundamental Enacting the
beliefs may be tested and over-ridden (Politis and Gabrielsson, 2009). Such a context provides lean startup
an environment for entrepreneurs to update their beliefs and scripts for their behaviours methodology
through reflecting on the outcome of their actions in a more effective way (Cope and
Watts, 2000; Pittaway and Thorpe, 2012). In line with the above, Argyris and Schön’s theory of
action perspective is briefly presented as an explicit framework for addressing the changes to
underlying beliefs and behavioural patterns. This perspective that posits how both beliefs and 815
behaviours are modified during the cyclical learning processes of single-loop and double-loop
learning is briefly reviewed.

Argyris and Schön’s theory of action

All human actions accord with their respective theories of action. Theories of action are
everyday means used to assist our attempts to understand and control our environment, to
explain current and past situations and to predict future courses of action (Parsons et al.,
1965). The details of these processes differ but they all take the form of “if […] then […]”.
Thus, since deliberate individual behaviour can be viewed as the result of the theories of
action of those individuals, a full schema for a theory of action would be: “in situation S,
if you want to achieve consequence C, under assumptions a(1) […] a(n), do A” (Argyris and
Schön, 1974, p. 6).
Argyris and Schön’s (1974) general theory of action has three components that help
explain action, namely, governing variables, action strategies and consequences
(see Figure 1). Concepts such as values, assumptions, rules, attitudes, beliefs and feelings
are all examples of governing variables which individuals try to keep within acceptable
ranges. These ranges include the most worthwhile solutions which are in line with
governing variables (Argyris, 1976). Action strategies refer to specific scripts for actions to
be taken by individuals to keep governing variables within the ranges that they implicitly or
explicitly believe are acceptable. Acting in accordance with the action strategies inevitably
has consequences. Some of these consequences are intended (the results that individuals
expect) and some are unintended (by-products of specific actions not envisaged by the
individuals) and have implications for both the individual and others (Anderson, 1995).
Similar to any other setting, in an accelerator setting, changes to these components in
various ways and through different processes are expected to occur. Modifications to
any of these components have various consequences that impact entrepreneurs and the
people around them.
Argyris and Schön (1978) hypothesised that learning is the formation or modification of
theories of action. In this context, learning by implication involves the resolution of
incompatibility between the three components of individual theories of action through
adjustments of governing variables and action strategies. If the consequences of an activity
give rise to changes in action strategies, single-loop learning occurs. If the consequences
lead to changes to governing variables, then double-loop learning can be identified.
Single-loop learning emphasises modifications to action strategies to make them more
effective. Double-loop learning works in similar ways to single-loop learning but instead
of only modifying action strategies, first modifies governing variables and then corrects

Governing variables Action strategies Consequences

Single-loop learning

Figure 1.
Double-loop learning
Single and
double-loop learning
Source: Adapted from Argyris and Schön (1974)
IJEBR action strategies. As entrepreneurs often learn by reflecting on their experiences, which is
23,5 crucial for making informed decisions, double-loop learning can help to explain some of the
learning in entrepreneurial contexts (Argyris et al., 1985). These revisions to governing
variables and action strategies can be expected in contexts where the focus on learning is
evident. For instance, in a prescriptive accelerator setting, where entrepreneurs are being
trained to make their assumptions explicit, the likelihood of reflecting on and modifying
816 what governs their actions increases.
With the exception of the articles authored by Freeman and Knight (2011) and Tagg
(2007), the vast majority of the research that cite Argyris and Schön’s theory of action do it
only to highlight the occurrence of single-loop or double-loop learning, without
substantiating the underlying mechanisms of those occurrences. For instance, Freeman
and Knight (2011) document changes to the components of students’ theory of action by
only highlighting the modified components. The similarity of their study with the current
one is the pedagogical context where a theory of action is employed to explain the
phenomenon of interest. However, to the best of the author’s knowledge, the current study is
unique in how the theory of action perspective and single-loop and double-loop learning
processes are employed to capture some of the changes resulting from participating in the
pedagogical setting of an accelerator. This helps account for the processes through which
instructions are acquired and employed, and informs us about the consequences of adhering
to them.

Methodology
The research question in this paper is “how do the instructions of the lean startup
methodology influence entrepreneurs?” To answer this question, this paper explores how
the instructions of the lean startup methodology were enacted in the context of a
prescriptive accelerator. A qualitative approach was employed to purposefully generate
understanding of the learning experiences of the entrepreneurs (Gephart, 2004). Adopting a
learning lens enabled insights into the interactions and changes that took place within the
accelerator context.

Research setting: the BornGlobal accelerator programme

This study was conducted in the context of a Swedish technology startup accelerator
programme. Funded by a Swedish Government agency and run by academics at Chalmers
University of Technology, the programme aimed at helping startups find verified and
scalable business models. Experienced entrepreneurs, venture capitalists and university
professors were amongst the team that provided support to the entrepreneurs.
The programme required CEOs and at least one founding entrepreneur from each startup
to be actively engaged in the programme and offered dedicated coaches to each
startup during the programme. The programme consisted of nine modules in a workshop
format, with two- to three-week intervals between the modules. The general orientation of
the programme was in explicit accordance with the instructions of the lean startup
methodology, meaning that the majority of the activities within the programme were
structured in line with ideas characteristic to that methodology. During each module,
topics related to the business model canvas were introduced to aid the entrepreneurs in
formulating relevant testable hypotheses in regard to their business models. The author
was present during all the modules and accompanied the entrepreneurs on their Silicon
Valley visit. Table I presents additional details of the content covered in each module as
part of the accelerator programme.
As the lean startup methodology was an important and integral component of this
programme, the following section provides a brief introduction to the methodology.
Module Activities
Module1: introduction, business Lectures and workshops
model and customer segmentation
Module 2: Silicon Valley week Inspirational seminars, lectures,
visits to several startup HQs,
public pitch event
Module 3: business review 1 Presentation of ideas by
employing the business model
canvas
Module 4: revenue streams and Lectures and workshops
customer relationships
Module 5: distribution channels Lectures and workshops
Module 6: key resources, partnership, Lectures and workshops
activities and cost structure
Module 7: business review 2 Presentation of ideas by
employing the business
model canvas
Module 8: financing and funding Lectures and workshops
Module 9: demo day Final presentation in front of
serial entrepreneurs, public
funding agencies and venture
capitalists
and their purpose
Table I.
modules, activities
Description of the
Description
The business model as a concept and the business model canvas as a tool were introduced. In
addition, customer development as a process model for the lean startup methodology was
presented and discussed in detail. This was followed by an exercise aimed at taking a close
look at the entrepreneurs’ value propositions by matching the values their offerings provided
to their target customer segments
The whole cohort travelled to Silicon Valley for a week. They met with knowledge leaders in
the lean startup movement, including Steve Blank and Laura Klein as well as with founders
and venture capitalists familiar with the lean startup methodology. The cohort also visited
experts at Tesla, Andreessen Horowitz, Airbnb and Google and attended lectures on various
related topics. The visit concluded with entrepreneurs presenting their ideas at a public pitch
event in front of a panel of venture capitalists organised and moderated by the Swedish-
American Chamber of Commerce
During the business reviews, entrepreneurs received feedback on the current state of their
ideas from external coaches, serial entrepreneurs and venture capitalists – all well versed in
the lean startup methodology
Different ways and logics through which startups can generate income were discussed by
zooming into various aspects such as pricing and revenue models. Next, entrepreneurs
engaged in a workshop that focussed on how entrepreneurs could reach their customers and
manage and sustain relationships with them
During this module, channels through which products and services could be sold were
introduced. The organisers helped entrepreneurs to formulate a clear understanding of their
possibilities
This module concluded a thought-through and clearly defined business model by covering the
required key resources, available partnerships, essential set of activities and also an
estimation and optimisation of costs associated with keeping the startups running
During the business reviews, entrepreneurs received feedback on the current state of their
ideas from external coaches, serial entrepreneurs and venture capitalists – all well versed in
the lean startup methodology
This module covered different ways to raise funds for the continuation and growth of startup
operations as well as a workshop to prepare entrepreneurs to pitch in front of venture
capitalists
The demo day, a setting that provided opportunities for potential funding, was dedicated to
the presentations of the revised business models and entrepreneurs’ final achievements,
completing the accelerator programme. Entrepreneurs previewed their prototypes and final
products (depending on their progress)
817
methodology
lean startup
Enacting the
IJEBR The lean startup methodology
23,5 Inspired by the lean manufacturing principles (avoiding waste and optimising resource
spending) and Steve Blank’s (2006) ideas, Eric Ries introduced the lean startup
methodology. The ideas in this methodology are reminiscent of contributions such as
“disciplined entrepreneurship” (Sull, 2004), “discovery-driven planning” (McGrath and
Macmillan, 2000) and “probe and learn” (Lynn et al., 1996). The methodology benefits from a
818 set of tools taken from other theories and methods such as the customer development
framework (Blank and Dorf, 2012), rapid prototyping (Brown, 2008) and agile software
development principles (Dybå and Dingsøyr, 2008). Core to the lean startup methodology is
validated learning through purposeful experimentation. Validated learning is a term that
highlights progress through a process of testing a set of carefully formulated assumptions
and analysing solid empirical data obtained from real customers (Ries, 2011; Maurya, 2012).
The lean startup methodology as a cyclical process is grounded in three main sets of
activities. First, entrepreneurs map their business idea visually on the business model
canvas (Osterwalder et al., 2005) as testable assumptions. This graphic visualisation
contains all the key aspects that entrepreneurs should have a certain degree of certainty
about. Second, entrepreneurs engage in a process designed to test the assumptions that
constitute the business model (Ries, 2011). The sequence of these tests is determined by the
perceived criticality of the results of those tests for the continuation of the process. One way
to test the assumptions is by creating a “minimum viable product” (MVP). An MVP is the
version of the product with the smallest set of features built by using the minimum amount
of time and resources which provides entrepreneurs with the information to validate or
invalidate assumptions (Ries, 2011). Through rigorous evaluation of the results, the
invalidated assumptions are replaced and new assumptions are tested. This process
continues until a reasonable number of tests point to the validation of critical assumptions.
Finally, when all the remaining assumptions are validated, “product-market fit” is achieved.
The fit implies that the product idea has a market and, therefore, customers are willing to
pay for the value offered by the product (Blank and Dorf, 2012). The ultimate goal of the
methodology is to guide entrepreneurs in finding this fit. Figure 2 presents a comprehensive
step-by-step schematic of the process.

Research design
Interviewing as a common method in qualitative research (Bryman and Bell, 2015) is
believed to provide deep understanding by shedding light on the set of events, why they
happened, how they happened and with what results (Schramm and Roberts, 1974). This
study used semi-structured phenomenological interviews (Cope, 2005a; Berglund, 2015) to
gain an in-depth understanding of the lived experience of the entrepreneurs who
participated in a prescriptive accelerator programme, with a special focus on how they made
sense of and enacted the method prescribed (Easterby-Smith et al., 2012). The aim of
phenomenological interviews is to “carefully, and thoroughly capture and describe how
people experience some phenomenon – how they perceive it, describe it, feel about it,
remember it, make sense of it, and talk about it with others. To gather such data, one must
undertake in-depth interviews with people who have directly experienced the phenomenon
of interest” (Patton, 1990, p. 104). This study aims to understand the phenomenon of
prescriptive accelerators by investigating the perceptions and lived experiences of
entrepreneurs. This includes a two-stage interpretation process where “the participants are
trying to make sense of their world; [and] the researcher is trying to make sense of the
participants trying to make sense of their world” (Smith and Osborn, 2003, p. 53).
To capture change and, therefore, learning, two rounds of interviews, one at the beginning
and one at the end of the programme, were conducted. Similar to Bingham and Haleblian
(2012), all the interviews were loosely structured and consisted of both close-ended and
 Set vision Enacting the
lean startup
Translate the vision methodology
into falsifiable
hypotheses

Specify MVP tests 819

Prioritise tests

Run tests and learn

from them

Hypothesis Hypothesis
validated rejected

Persevere, pivot
Perish
or perish

Persevere: Pivot:
Have all Adjust vision to
hypotheses been accommodate
confirmed? learning

No: Yes: Figure 2.

test next product- The schematic of
hypothesis market fit the lean startup
methodology process
Source: Adapted from Eisenmann et al. (2012)

open-ended questions. Close-ended questions were related to the background information about
the entrepreneurs and helped the conversation to get going. Open-ended questions were primarily
intended to capture entrepreneurs’ experiences and their learning as a result of participating in
the accelerator programme. These questions sought to shine a light on the entrepreneurs’
thoughts about different aspects of their businesses and the set of activities conducted to
progress their business processes. This design allowed for the capture of their “initial” theory of
action and the “updated” one after having gone through the accelerator programme. Comparing
the entrepreneurs’ statements from the first and second rounds of interviews and also reviewing
the secondary data helped the identification of the learning processes.

Data collection
The primary source of data for this paper is a total of 22 semi-structured interviews
conducted either face-to-face or via Skype, recorded and transcribed verbatim (see Table II).
All the entrepreneurs from the startups that participated in the programme were invited to
be interviewed to both have the statements corroborated and to obtain possible alternative
points of views. The initial study design was based on interviews with all the entrepreneurs
in the accelerator programme. Entrepreneurs from 11 out of 18 startups were successfully
interviewed in two rounds of interviews. The initial round focussed on capturing how the
entrepreneurs conduct different activities and how they reason around those activities.
The second round focussed on exploring what and how it was learned during the
programme. Interviews were aimed at providing answers to questions such as what has
changed, where these changes came from and what the consequences of these changes were.
IJEBR LSMa
23,5 Firm Size Interviewees 1st interview 2nd interview Industry knowledge

A 3 Two co-founders Over Skype Over Skype Collectibles trading None

B 11 Three co-founders Over Skype Over Skype Online book publishing Some
C 6 Two co-founders Over Skype In person Idea management solution None
D 3 Three co-founders Over Skype Over Skype Interactive event management Little
820 E 2 Founder In person Over Skype P2P physical items lending None
F 4 CEO In person In person Interactive visualisation system None
G 4 CEO and founder In person In person Industrial measurement solution Little
H 7 Two co-founders In person In person 3D scanning technology Some
Table II.
Description of I 3 Two co-founders In person Over Skype Personal styling app None
entrepreneurs, their J 4 Two co-founders In person In person Physical interactive toys None
startups and data K 3 Three co-founders In person In person Home energy management Little
collection efforts Note: aThe lean startup methodology

The first cohort in the programme consisted of eight startups. Six interviews in the initial
round and six interviews in the second round were conducted with the entrepreneurs on-site
(at the accelerator) while each interview lasted on average about 60-70 minutes. The reason
for not interviewing the entrepreneurs from all the eight startups was simply lack of access
and availability, which led to the decision to exclude them from the study. The second
cohort in the programme included ten startups. After discussions with the programme
organisers, half of the cohort were selected for interviews. The criteria guiding the selection
were full participation in the programme, availability for interviews and openness to
sharing their experiences.
The interview data were complemented by weekly surveys, materials from presentations
in each module and the author’s observations during the programme. Weekly surveys
inquired about the activities conducted, the rationale behind them and the activities
planned. This provided the author with first-hand exposure to the phenomenon under
study, instead of sole reliance on the entrepreneurs’ accounts. It is important to note that
these three additional data sources were used to increase the author’s familiarity with the
entrepreneurs, to inform the interviews and to provide a better understanding of the
entrepreneurs’ progress.

Categorical data analysis

To facilitate the data analysis process, all the interview transcripts were coded using Atlas.ti,
a qualitative data analysis software. This allowed for a more effective process to keep
track of emerging labels and categories, as well as easier reference to similar concepts and
their respective statements. Throughout, the analysis of the data in this study can be
characterised as iterative because insights emerging from the data were held up against
published research. In line with Alvesson and Sköldberg (2000), this provided a way to
re-visit the data with categories and ideas inspired by theory. Through an open coding
process (Strauss and Corbin, 1998), transcripts were broken down into independent meaning
units. Each meaning unit was assigned a label or a simple descriptive phrase as close as
possible to the terms and language used by the entrepreneurs. After this process was carried
out for all the interviews, the labels were grouped under a large set of tentative categories.
Through re-visiting these tentative categories, some of the categories stayed intact, some
were merged to form new larger categories and others were divided into more detailed
categories. The decisions were made based on a number of simple rules: if the category was
inclusive in its content, i.e. all the statements, the category stayed intact; if the category did
not fully contain all the existing statements, the category branched out and formed a new
category; and if two or more categories communicated the same or very similar ideas they Enacting the
were merged and created a new larger category. This process resulted in 34 categories. The lean startup
categories that did not address change, learning and behavioural consequences were methodology
discarded, leaving the author with 25 first-order descriptive categories. Through a careful
process, categories were grouped and resulted in five theoretical second-order themes.
These five second-order themes were later revisited in light of Argyris and Schön’s theory of
action and their related first-order categories were then mapped into the three components 821
of the theory of action, organised as five sets of governing variables, action strategies and
consequences (see Table III).
Argyris and Schön’s definitions of governing variables, action strategies were used to
organise the first-order categories. If the categories contained concepts such as values,
assumptions, attitudes, beliefs and feelings which impacted the activities, the category was
considered a governing variable. For example, the category “learning as the main goal of the
process” is related to how the entrepreneurs assumed the nature of their activities. If the
categories implied specific courses of action or scripts that indicated a set of activities, that
category was classed as an action strategy. For example, the category “rigorous evaluation
of customer interactions” refers to a certain set of activities. If the categories signalled
consequentiality of action in terms of outcomes, the category was considered a consequence.
For example, the category “improved internal and external communications” indicates the
consequences of evaluation of customer interactions.
In the case of a mismatch among any of the governing variables and the action strategies
revealed in the first and the second interviews, a learning process was identified. If the
learning was a direct outcome of exposure to the instructions of the lean startup
methodology, without any involvement of concrete activities, a vicarious learning process
occurred. For instance, governing variable “technology is the most important component of
the product” was replaced by “do not focus only on your technology”. This was the outcome
of explicit instructions that the programme organisers repeatedly communicated. If the
learning was the result of reflecting on the outcome of actions undertaken by the
entrepreneurs, an experiential learning process was identified. In the case of a mismatch
between governing variables in the first and second interviews – brought about by
conducting certain activities – a process of double-loop learning was identified (e.g. the
move away from business plans to validated business models). If the mismatch involved
modifications to the action strategies, a process of single-loop learning was identified (e.g.
the change from perfecting the technology to focussing on activities that improved the
entrepreneurs’ customer knowledge). Table III presents the initial set of governing variables
and action strategies, and the updated ones as the outcome of participation in the accelerator
programme.

Findings
In what follows, the second-order themes are used to organise the presentation of the
findings as they capture the learning of the entrepreneurs in a meaningful way. These are
later used to serve as the basis of the entrepreneurs’ theory of action. The first-order
categories are mapped into the three components of the theory of action and are presented in
the following five sets.

Set 1: the importance of having contact with customers

Governing variable: “Understand customer needs and requirements”. The first governing
variable highlights customers as the most important factor to be taken into consideration
before major decisions are made. The lean startup methodology suggests that customers are
the best source of information as they are the ones who have the urge to solve their
 23,5

822
IJEBR

Table III.

theory of action
The entrepreneurs’
Updated
Initial governing governing
Theme variables Initial action strategies variables Updated action strategies Consequences

The Complete the product Utilise all the necessary Understand Keep close contact with customers to
More direct and indirect interactions
importance development and resources to make the customer needs obtain first-hand feedback (use all
with customers, more confidence in
of having customers will buy the complete offering available and requirements means necessary to enhance the viability of the business idea,
contact with product. Focus on after- as soon as possible to obtain familiarity with customers, raiseimproved internal and external
customers sale customer first-mover advantage awareness of the importance of communications, deeper
relationships customers’ role in the process) understanding of customers, task
overload
Handling of Changes are necessary if Disregard signals to change Allow for Rigorously evaluate and Important insights that were barely
changes they are explicitly that distract developmental frequent changes communicate the results of customer known to the entrepreneurs, large
indicated in the business efforts if necessary interactions (use analytical tools to number of changes during short
plan facilitate the dissemination of the periods of time, difficulty to maintain
results within the organisation and focus
among team members)
Accounting Technology is the most Try to perfect the Do not focus only Let customers decide what you offer A new process to set priorities based
for different important component of technology on your them (gather all the relevant on the insights from interactions
aspects of the product technology information about potential and with customers, introduction of new
business existing customers) activities
development
Maintaining Every interaction is an Take every opportunity to Focus on learning Employ the results from customer Informed decisions made through
a learning- opportunity to sell. sell to customers from day from customers interactions in making informed rigorous processes, easier to come to
oriented Customers do not know one rather than decisions (treat your customers as agreement amongst founding teams
mindset what they want selling to them information sources rather than in regard to future courses of action
income sources, design your
interactions with your customers in
ways that learning is maximised)
Embracing Focus on your business Organise to implement the Focus on Validate the hypotheses before Internal problems in regard to the
the plan as it covers all the business plan as the guiding searching for a proceeding with developmental assimilation of the method
experimental relevant aspects that manual business model efforts (set up hypotheses about the instructions within the organisation,
nature of the need consideration rather than different elements of your business interference of the method with
process executing a idea, design processes that provide already established processes,
business plan information about the viability of the conflicts with board members and
business model) investors
problems and, thus, are willing to pay to solve them. As the programme explicitly followed Enacting the
the methodology – and was heavily influenced by it – programme organisers and coaches lean startup
emphasised the importance of understanding customer needs. The entrepreneurs, therefore, methodology
allocated a great deal of time and attention to customer needs and maintained close contact
with their customers throughout their participation in the accelerator programme:
“We are trying to understand our customers better than we did before. We need to focus on the
pains and needs of our customers” (H); “We think inviting the most active users of the app to our 823
office, offering them wine and snacks and listening to their feedback is very important. We want to
ask them about what they want to see in our product” (A); “We have to stick really close to our
customers and their needs. Otherwise, we will not have a business at all” (C).

Action strategy: “Keep close contact with customers to obtain first-hand feedback”. The first
action strategy highlights the importance of having practices and processes in place to
systematically collect and analyse customer insights. In order to understand customers, the
entrepreneurs engaged in various activities to collect feedback. The first-hand feedback was
analysed and the insights gained were then used to convince the founding teams in regard
to contentious decisions that were deemed necessary but not intuitively relevant:
“After interviewing our customers we realised that we need to have the users of our product in
mind and therefore our approach should be bottom-up. This came to light after talking to a
sufficient number of our customers” (G); “We administered a survey and asked for feedback from
our most active users and followed up with them. The outcome of that inquiry helped us make some
necessary changes to the app.” (I); “We have been continuously hearing very good feedback from
our customers already from the start of the accelerator programme. This has become a very close
part of our culture. We constantly talk to our customers now” (A).

Consequences. Adopting the first governing variable and following the corresponding
action strategy influenced how the entrepreneurs communicated decisions and strategic
directions within their teams. This closer relationship with customers posed a challenge.
The entrepreneurs had to find solutions to adapt the internal culture of their teams to be
more accommodating to the new ways of working. For this, they first needed to make
explicit how decisions and strategic directions were communicated. By re-thinking it, they
arrived at different ways for communicating with each other and with others external to
their teams. Another consequent change was in relation to how customers were viewed:
from “customers” to “collaborators”. The entrepreneurs began to view their customers as
undetachable parts of their early processes, since without customer collaboration, they
believed that their businesses were “sentenced to failure” (E). One of the startups invited
their 100 most active users to their office to encourage their feedback and create a sense of
belonging. Activities such as administering surveys and organising trips to potential
customer sites provided the entrepreneurs with invaluable insights that were otherwise
very difficult to obtain. The positive and negative results of these interactions resulted in
some confusion; on the one hand, positive feedback created higher confidence as well as
higher success probability perceived by the entrepreneurs. On the other hand, negative
outcomes led to doubts and scepticism about the future of their business ideas and their
possible abandonment. The high demands of the lean startup methodology and the
programme also led to some entrepreneurs voicing their concerns about task overload and
possible burn-out:
“We can now communicate in a way that we could not do before. We now know what to say to
investors, to our customers, and to a lot of other people” (I); “Talking to customers and
learning about their needs, we are more confident about the core business idea” ( J); “We think
conducting customer interviews and analysing them are helpful practices but we also have
daily deliverables. We have the challenge of time” (B); “Adoption the [lean startup] methodology
IJEBR has changed quite a lot about how we internally discuss things among us co-founders. We think
23,5 it helped us move faster” (B); “We have more harmony at work, through more informed internal
communications” (F).

Set 2: handling of changes

Governing variable: “Allow for frequent changes if necessary”. The second governing variable
824 refers to both the explicit and implicit impact of the methodology’s instructions on commitment to
change. During the early stages of the business development processes, frequent changes
are expected. As the business idea is in the experimental stage, its minor and major elements are
subject to revision. This requires a mindset that is open to the possibility of and tolerates the
necessity for frequent changes. These necessary changes need to be warranted and prompted by
solid and valid stimuli. Therefore, the entrepreneurs were instructed that only warranted changes
should be embraced. Accommodating this governing variable required a high degree of flexibility
as well as a high tolerance for ambiguity. This equipped the entrepreneurs with the ability to
embrace sudden changes if reliable data from external sources pointed at the necessity of those
changes. This meant that the ideas or their elements were subject to frequent modification:
“We are not afraid to do pivots [major changes] anymore. This means that any change can happen”
(A); “We have changed a lot of things during this process, more than what we did before” (H); “Some
of us take every chance to make necessary changes. We too have been really trying to use all the
possibilities to change” (K).
Action strategy: “Rigorously evaluate and communicate the results of customer interactions”.
The second action strategy refers to the practices that the entrepreneurs followed to make
sense of the data collected from customers. Embracing frequent changes requires rigorous
evaluation of the evidence that indicates the necessity for change. It also requires effective
communication of the relevance of those changes. A rigorous evaluation process was,
therefore, adopted by re-visiting the documented interactions the entrepreneurs had had with
their customers. This process both enabled the entrepreneurs to obtain a better understanding
of customers and market and facilitated internal and external communications:
“We are definitely more structured in the way we work in comparison with how we worked before.
We have workshops at least once a week. Before we only focused on what we thought was relevant
and not what customers were interested in. But now we aim at evaluating all the interesting results
from different interactions” ( J); “What we do is to define the hypotheses that we want to test and
how we want to test them. After testing the hypotheses, we come back and say these are what we
got from the evaluation and this is what they mean” (E).
Consequences. The customer interactions often contained random, but nevertheless
interesting, insights. The rigorous evaluations facilitated more effective internal and
external communications by providing a space where implementing changes appeared to
become easier and more natural over time. Moreover, the need to rigorously evaluate customer
interactions added another layer to the existing organisational structures, contributing to the
complexity of their processes. Some of the entrepreneurs explicitly demonstrated that they
embraced all the possible opportunities to change to make sure that they were flexible enough
to accommodate their customers’ needs. This led to substantial changes both to the business
idea itself and the ways of working within the teams. One of the entrepreneurs stated that they
began to question all the assumptions they had held about their business model by analysing
the qualitative and quantitative evidence they meticulously collected:
“We are becoming more open to sudden and big changes if they appear to be rational and justified”
(H); “We are trying to use all the possibilities to change, if necessary. Nothing is fixed for us unless
validation comes from our customers” (A); “We turned everything inside-out based on the metrics
collected from our customers” (I).
Set 3: accounting for different aspects of business development Enacting the
Governing variable: “Do not focus only on your technology”. The third governing variable lean startup
refers broadly to the salient shift in focus from perfecting the underlying technology of the methodology
offering to greater consideration of customer preferences. Although the technological
aspects of what is offered by entrepreneurs are important in shaping the outcome,
customers often pay very little attention to the technology behind the surface. Therefore, it
does not greatly matter what the technology is and what possibilities it offers unless it helps 825
to solve customer problems. Adopting the lean startup methodology and adhering to its
instructions impacted what the entrepreneurs focussed on. Instead of spending excessive
amount of time on perfecting their technologies, they began to prioritise gathering detailed
feedback from their potential customers and testing their ideas before incorporating
technological specifications into their products. Suddenly, priority setting was not entirely
based on the urgency of technology optimisation but rather on the needs of customers. This
required fundamental changes in the entrepreneurs’ mindset and the logic guiding their
actions. Despite the importance of technology as the underlying enabler for providing the
offerings, the entrepreneurs came to realise that customers are less concerned with
technology than they had imagined:
“Before, we decided that a proposed feature is technologically feasible and agreed on pursuing what
was necessary to realise it, but now we believe that we need to know what our customers think
about that feature before making the decision to commit resources” (B); “We changed from the
mindset of ‘we have this great product or feature idea, who would not like it?’ to ‘this sounds
interesting. I wonder what our customers would think about it’ ” (E); “We have become more
customer-oriented. Before we were very much technologically focused. We have started to move
more and more to the customers’ side” (G).

Action strategy: “Let customers decide what you offer them”. The third action strategy refers
to the gradual move to involve customers and their insights in determining what values the
offerings provide. In line with the explicit focus of the lean startup methodology, the
entrepreneurs began to run systematic experiments and to engage in regular customer
interviews over extended periods of time to complement their knowledge about their
customers. By focussing more on understanding their customers, the entrepreneurs came up
with new ways to set priorities. The priorities were grounded on the results of the evaluation
of customer interactions. These priorities were later screened to ensure that they conformed
with the strategic direction of the startup:
“During customer interviews we told our customers “imagine that there is a magic solution for you,
what would that be?” They responded: “I would like to […]”. This gave us some ideas about what
our customers might need” (E); “We are not trying to push features on our customers anymore,
instead we are trying to get them to tell us honestly what they want us to do for them” (I); “We try to
put the interactions we have with our customers into use and get inspiration from them” (A); “We
will have follow up interviews to see how our customers found us, what they saw in our product,
what values we provide them, and what they need from us” (F).

Consequences. In order to gather relevant information, processes by which priorities were

agreed upon and therefore communicated within the teams were put into place. Changes to
priorities led to various activities such as customer interviews being valued highly and
being conducted more frequently, in turn leading to a deeper knowledge of market and
customers. Through this process, customers were given a new voice which was different
from before. They could directly influence the activities that required attention. In addition,
the new routines adopted as part of the programme such as conducting systematic
customer interviews, running rigorous experiments and gathering relevant information put
an extra burden on the entrepreneurs. This meant that there was a higher demand on the
IJEBR entrepreneurs in terms of expected responsibilities and made the process of setting priorities
23,5 integral to their processes:
“Based on customer feedback, we decide together whether or not we need to do activity x. Now we
need a new process to prioritise the activities. We have to adapt to the new reality” (B); “We ask
ourselves do we really need this feature in our offering or not? This is a major change in how we work.
The results of testing the MVPs with our customers allow us to become better in prioritising” (K).
826
Set 4: maintaining a learning-oriented mindset
Governing variable: “Focus on learning from customers rather than selling to them”. The fourth
governing variable denotes the change from viewing customers only as a source of income to
viewing them as a source of information and inspiration. Instead of treating the interactions
with customers as opportunities to “sell”, the entrepreneurs shifted their focus to use
interactions to learn and improve their understanding about customer needs and problems.
The entrepreneurs realised that they needed to allocate more time to activities that provided
learning opportunities about their customers, and to ensure that learning is the goal as well as
the outcome of those interactions. Soon, the importance of this change and the significant
consequences it had on how the entrepreneurs made decisions became apparent to them:
“We want to help our customers instead of only targeting them to sell our product” (F); “We realised
that we were pushing to sell our product to our customers and focus more on having a dialogue
instead of trying to force them into deals” (I); “We have shifted our focus from selling to learning.
We now focus on understanding the fit between our product and its features, and our customers’
needs” ( J); “Our meetings were more sales-oriented rather than attempts to understand the needs of
our customers. Now I think if we approach our customers with the mindset of understanding them,
we will get much more out of the interactions with them” (K).
Action strategy: “Employ the results from customer interactions in making informed
decisions”. The fourth action strategy refers to the employment of customer insights as
important inputs to steer decision-making processes. One of the main impacts the lean
startup methodology had on the entrepreneurs was the way in which they made decisions,
both at the individual and team level. Instead of relying on gut feelings and ad hoc internal
discussions, the entrepreneurs followed new routines to make informed decisions (decisions
grounded in information relevant to the context of the decision):
“The discussions, internally as well as externally, are more fruitful when we acknowledge that it is
not only the people present in the room who know the answer. We can indeed agree that our idea is
a good idea, but then we need to ask our customers before making important decisions” (B);
“We made our first pivot. We do not yet know if it was right or wrong, but from what we know
from customer interviews we believe it was” (D); “Drawing on the idea of product-market fit and
through our interactions with customers, I think we have successfully managed to tease out the
important issues before making decisions” (C).
Consequences. The information gathered through various channels was employed to
provide a neutral space where personal cognitive biases and logical fallacies were
consciously addressed. In this space, customers were not viewed exclusively as sources of
income but rather as providers of crucial information and insight. These insights were
highly valued and employed as input for making informed decisions. Moreover, the
entrepreneurs recognised the relevance of involving others in making decisions. They
appreciated how insights and opinions other than their own should be taken into
consideration before minor and major decisions were made. Even if their ideas appeared to
be sound on an intuitive level, they acknowledged the need to review alternative aspects of
their ideas. This change, directly induced by participation in the accelerator programme,
resulted in a higher perceived quality of decisions. Another important consequence was that
while the entrepreneurs’ views about the business development process had changed, their Enacting the
investors and board members still regarded the process as a linear process of following lean startup
business plans. This divide was detrimental to the development of the business ideas. methodology
On the one hand, entrepreneurs were encouraged to abandon their business plans and
follow an emergent process and on the other hand, they were required to show progress in
line with the projected goals in their business plans:
“We refocused directly based on the insights regarding what people were actually looking at 827
while browsing the app” (I); “The internal workshops for making strategic decisions are centred
around the insights that we gathered through interacting with our customers” (D); “We have been
very driven in generating income and getting the sales going. This is mainly from the goals and
income prognosis that our owners have set for us. However, we feel we are still in an iterative
process. Our investors are asking us to generate income according to the plan but we need more
time to learn. We are not on the same page as our investors” (I); “From the investors’ point of
view, we should have already sold the product. This creates some difficulty for us in following the
lean startup [methodology]. We get so many new inputs and we want to apply what we have
learned. When we discuss the insights with our investors they do not understand what we are
talking about” (G).

Set 5: embracing the experimental nature of the process

Governing variable: “Focus on searching for a business model rather than executing a
business plan”. The fifth governing variable concerns the importance of validating
business models. Traditionally, entrepreneurs were expected to write business plans not
only to raise money but also, among other reasons, to signal legitimacy. The explicit
distance of the lean startup methodology from long-term planning approaches disposed
the entrepreneurs to focus on formulating hypotheses about their customers and
organise activities to test them. The entrepreneurs no longer took for granted the
validity of highly speculative business plans that could prove to be wrong, especially in
the rapidly changing markets in which they were conducting business. Instead, they set
out to systematically verify the elements of their business models through rigorous
evaluation of the results of interactions with customers. This validation entailed the move
away from long-term planning and execution of their business plans to the search for a fit
between their offerings and customer needs. This move required a great deal of
adjustment in how the entrepreneurs viewed their business ideas and the set of activities
they needed to conduct:
“We had a launch date in our business plan. We wanted to execute it and be on time with our
projection. We thought we were ready to launch and to scale quickly. We presumed there was a
need out there for our product. We certainly would have failed if we had launched our product” (E);
“We had a really strong plan and wanted to stick to it and execute. Now we take one step back and
test things before executing” (B).
Action strategy: “Validate the hypotheses before proceeding with developmental efforts”.
The fifth action strategy deals with the need to acquire a thorough understanding of all
the various aspects of the business idea. To do so and to validate their assumptions, the
entrepreneurs began formulating working hypotheses aimed at answering the uncertainties
related to their core ideas. This helped to collect credible input feeding the advancement of
their processes. Some of the entrepreneurs delayed the initiation or continuation of the
development activities until they were assured of the match between their product ideas and
their potential customers’ needs:
“Together with our development team, we decided that we will not write a single row of code during
the first three months until we exactly know what our customers want” (C); “We began to set
explicit hypotheses about our business model. We are going to continue this approach of hypothesis
IJEBR testing” (F); “We think that our users want inspirational data. This was one of our hypotheses.
23,5 We tested it before proceeding with curating content” (I); “We have decided not to change anything
unless we validate the necessity to change” (D).
Consequences. While largely perceived as positive, adopting a hypothesis validation
strategy created a disconnect among some team members, especially among those members
of the startups with established organisational frameworks. Attempts to assimilate the lean
828 startup methodology were met with scepticism. Some team members became confused
about their responsibilities and found it hard to maintain the necessary balance between
participating in the validation of the newly formulated hypotheses and delivering to their
existing customers. Several entrepreneurs expressed concerns about how their attempts to
assimilate the instructions created a divide among employees and, therefore, hindered
progress. The conflict between delivering to existing customers while being flexible to
continuous changes and absorption of new insights disturbed the desired balance between
these two types of internal activities. This issue was less of a concern for those startups yet
to launch their products officially:
“We had a lot of discussions about how to adopt the instructions without dividing the company.
We have been very keen in involving the whole company in the process and let the employees
understand what we were doing” (B); “We think that the customer interactions are very helpful,
but what stops us from doing it more are the daily deliverables” (G); “We also need to run the
normal business in the meantime while changing, evaluating, and being adoptive to new ideas.
We are speaking to real customers, doing real projects and delivering to them. This is dealing with
the reality and deliverables at the same time as doing this developmental work” (D); “Everyone in
the company is frustrated that we cannot focus fully on validating hypotheses. There are a lot of
administrative issues to take care of” (H).

Analysis
This section shines a light on the mechanisms underlying the findings. First, the
entrepreneurs’ theory of action is presented and discussed by juxtaposing the initial
governing variables and action strategies with the updated ones. Next, the occurrences of
vicarious and experiential learning processes are substantiated.

The entrepreneurs’ theory of action

Table III documents the updated entrepreneurs’ theory of action as the outcome of
participation in the accelerator programme in juxtaposition with the entrepreneurs’ initial
governing variables and action strategies. The entrepreneurs’ theory of action is
comparable to the notion of “practical theory” (Shotter, 1993) in providing cognitive and
analytical devices to understand, decide and act in entrepreneurial situations. Although it is
relatively difficult to access theories of action, “experientially grounded narratives” can
provide systematic access to these theories (Pitt, 1998). The interactive effects of direct
experiences and the reinforcement of vicarious episodes inevitably take place together in
everyday activities (Bandura, 1977). Therefore, these theories include experientially and
vicariously accumulated knowledge (Agor, 1986) that manifest in and through contacts with
others and reflection on the experiences (Boyce, 1995). The five identified themes make
reference to micro-entrepreneurial theories of action as opposed to a “general theory of
action” (Parsons and Shils, 1962), collectively leading to a coherent set of governing
variables and action strategies. Here, the entrepreneurs’ theory of action refers to the set of
governing variables and action strategies that govern the entrepreneurs’ thinking and
actions in the process of creating a business. Revised in alliance with the lean startup
methodology, the entrepreneurs’ theory of action is practically stored in the minds of
entrepreneurs and is largely observable and retrievable from their business-related
practices (Argyris, 2002). In the following section, the learning processes that substantiate Enacting the
how the instructions of the lean startup methodology were enacted and eventually resulted lean startup
in the entrepreneurs’ theory of action are examined. methodology
Occurrences of vicarious learning
The social nature of the accelerator allowed the entrepreneurs to learn from observation and
second-hand experiences; both by listening to other entrepreneurs during the status updates 829
and by listening to their coaches through scheduled coach-entrepreneur meetings. Through
these exchanges of experience, a great deal of vicarious learning occurred. During the status
updates, sharing of experiences was encouraged and applauded. The entrepreneurs
reported their current status that included activities undertaken, number of customer
interactions, metrics collected through online customer interaction, how they were analysed
and more importantly their planned activities. Observing others’ progress created peer
pressure and encouraged the entrepreneurs to conduct more activities related to the lean
startup methodology. The status updates gradually turned into competitions where the
entrepreneurs sought to outshine each other. Another salient effect of these status updates
was the possibility they provided to receive feedback, referrals and assistance from other
entrepreneurs and coaches. These occasions helped the entrepreneurs to model others’
behaviours and experiences. As the entrepreneurs dealt with similar issues, the behaviours
modelled did not differ much in terms of content and complexity. This resulted in an
important outcome. By hearing about the attempts to adhere to the instructions, the
entrepreneurs succeeded in imagining possible scenarios in which they could use others’
experiences to fit their own specific situations. For instance, at times they followed other
entrepreneurs’ novel ways to collect and analyse information. By adapting those ways to
their own contexts and accounting for their available resources, they spared needless errors
and, therefore, managed to better utilise their limited resources.

Occurrences of single-loop and double-loop learning

Consider the following as an instance of single-loop learning. One of the main pillars of the
lean startup methodology is to understand and learn about customers. By vicariously
learning about this through participating in the educational lectures, the entrepreneurs
began to interact with their customers to obtain feedback. They, therefore, used all the
means at their disposal to improve their familiarity with their customers. By attaining and
maintaining close interaction with them and reflecting on the insights they provided,
the entrepreneurs continued to refine their business models. As the overall perception
of the consequences of these interactions was positive, the entrepreneurs internalised
the methodology’s instructions in relation to customers. Having customers in mind became
more embedded in the individual behaviour of the entrepreneurs as well as in the collective
behaviour of their teams through repeated processes of “single-loop learning”. As a result,
the action strategy “keep close contact with customers to obtain first-hand feedback” was
internalised. Similar processes occurred to the other action strategies. Each situation and
each interaction that the entrepreneurs engaged in was another opportunity to test the
related action strategies. Figure 3 illustrates a schematic of this process.
Now consider the following as an instance of double-loop learning. In line with the
emphasis on the necessity of customer interactions and once again through vicarious
processes, the entrepreneurs were reminded of the importance of rigorous evaluation
of customer interactions. They employed various analytical tools to evaluate and analyse
customer interactions. The results provided important insights and led to minor and major
changes. The perceived benefits of the results of the evaluations of the interactions led to
fundamental modifications to the entrepreneurs’ governing variables. Instead of focussing
on rigid business plans, they embraced the necessity for frequent changes as a natural part
IJEBR of their business development efforts. The modification to the governing variable enforced
23,5 the corresponding action strategy and played a big role in internalising it. Through
processes of “double-loop learning”, the entrepreneurs updated their theory of action by
adding “allow for frequent changes if necessary” to the set of their governing variables and
“rigorously evaluate and communicate the results of customer interactions” to their action
strategies. Figure 4 depicts a schematic of this process.
830
Discussion
The purpose of this paper is to explore what happens and how it happens when the
instructions of the lean startup methodology are enacted in the context of a prescriptive
accelerator. The phenomenological interview-based study design allowed the identification of
what the impact of this enactment process is and how it came to be. Bruneel et al. (2010)
suggested that amongst other processes, new knowledge is acquired and accumulated
through two distinct theoretical modes of learning: vicarious and experiential learning.
By explicating the complementary relationship between learning processes, they suggest that
entrepreneurs can greatly benefit from learning processes such as vicarious learning instead of
relying only on experience. Learning can be captured when individuals exhibit changes which
enable them to conduct certain activities differently and more effectively (Rae, 2000).
This paper, therefore, relies on vicarious and experiential learning modes to discuss the
findings of the study. Acting in concert, vicarious and experiential learning processes resulted
in what is termed here as the entrepreneurs’ theory of action. Figure 5 summarises and depicts
the architecture of interactions between vicarious and experiential learning processes.

Vicarious learning in entrepreneurial settings

As we listen to or observe people around us – be it through direct observation of
other people or participating in pedagogical settings – we internalise the gist and content

Action strategies Consequences

Figure 3. Improved internal and external communications,

Schematic of an Keep close contact with customers
More direct and indirect customer interactions,
instance of single-loop More confidence in the viability of the idea,
to obtain first-hand feedback
Deeper understanding of customers,
learning resulting Task overload
from adherence to
instructions drawn
from the lean startup
methodology Single-loop learning

Governing variables Action strategies Consequences

Figure 4. Important insights barely

Schematic of an Rigorously evaluate and known to the entrepreneurs,
Allow for frequent
Large number of changes
instance of double- changes if necessary communicate the results of
during short periods of time,
loop learning resulting customer interactions
Difficulty in maintaining
from adherence to focus
instructions drawn
from the lean startup
methodology Double-loop learning
of those events and use them to our benefit when a similar situation occurs (Wood and Enacting the
Bandura, 1989). Although much of the entrepreneurial learning literature has focussed on lean startup
the experiential side of entrepreneurial learning (Cope and Watts, 2000), an important part of methodology
the results of this paper is concerned with the changes that indicated a process of vicarious
learning. The social interactions between the entrepreneurs and the coaches and
participation in lectures and workshops as part of the programme contributed to this
process. They greatly influence the accumulation and assimilation of relevant knowledge, 831
impact the ensuing behaviours and contribute to the entrepreneurs’ theory of action through
sparing needless errors (Tuschke et al., 2014).
As vicarious learning is represented by the two main activities of listening and reflective
thinking (Nehls, 1995), through listening and reflecting on the practice encounters of the
others, the entrepreneurs learned vicariously. The amount of influence the observations and
interactions could exert varies and depends on the type of activities being modelled or how
highly the entrepreneurs valued the outcome of such behaviour changes (Gioia and
Manz, 1985). As a result, listening to and reflecting on other entrepreneurs’ experiences and
interacting with coaches and investors produce knowledge that ultimately contributes to
“enlarged experiences” (Polkinghorne, 1988). In the end, the corpus of experience and
knowledge throughout the programme is extended by the entrepreneurs learning
vicariously from and alongside each other.
Furthermore, participating in educational lectures and workshops offers several additional
opportunities for vicarious learning. Simply hearing about the experiences of lecturers and
workshop facilitators can be beneficial to this process. A factor that fosters vicarious learning
as part of the educational lectures and workshops is the acknowledgement that other
entrepreneurs offer insights – through the retelling of their experiences – that are perceived as
applicable to the entrepreneur’s own specific case (Ellis et al., 2004). This is directly linked to
the notions of legitimacy and authority and how they were signalled successfully early on or
acquired during the programme (Clegg et al., 2007). These notions become especially relevant
as the ideas communicated from the position of authority and legitimacy are often treated as
truth and therefore often not subject to scrutiny and interpretation (Harden, 2000).
This suggests that building trust and legitimacy is of great importance in facilitating
vicarious learning in educational settings. Both discussed sources of vicarious learning had
direct influences on the entrepreneurs’ way of thinking and acting and, therefore, impacted
how they thought about developing their business ideas and what they did in order to
achieve their goals.

Experiential learning in entrepreneurial settings

In line with Weick’s (1969) assertion that learning has to be viewed in accordance with and
guided by a theory of action, Argyris and Schön’s (1974) theory of action has been used to
help to explain learning through the experiential processes of single-loop and double-loop
learning (Lumpkin and Lichtenstein, 2005; Freeman and Knight, 2011). If the consequences

Experiential learning
• Single-loop learning processes Figure 5.
• Double-loop learning processes Grounded theoretical
model of the
Instructions of
entrepreneurs’ theory
The entrepreneurs’
the method theory of action of action formation
process in the context
of the studied
Vicarious learning
prescriptive
• Educational lectures and workshops accelerator
• Social interactions during the programme
IJEBR of certain actions are at odds with entrepreneurs’ expectations, a process of change seems
23,5 inevitable. However, entrepreneurs need to have access to alternatives to replace and
restructure their theory of action to fit the given context. The introduction of an external
stimulus (the lean startup methodology in this case) provides an alternative and facilitates
the change process (Anderson, 1995). Being exposed to the lean startup methodology
makes it more accessible for entrepreneurs to revise and restructure their theory of action.
832 If the consequences prove to be in line with expectations from and promises of the
instructions, the respective governing variable and action strategy become internalised.
In pedagogical settings such as prescriptive accelerators, entrepreneurs acquire the
instructions primarily in a vicarious way through educational lectures and workshops.
However, it is not until they experience the outcomes of the vicarious learning in action that
they cement the related knowledge as their theory of action. In other words, by participating
in such programmes, entrepreneurs accumulate knowledge that impacts their theory of
action; however, an experiential learning process is critical in internalising that knowledge
and restructuring their theory of action. This outlines the complementary relationship
between vicarious and experiential learning processes and the distinct roles they play in
how the instructions are enacted.

Grounded theoretical model of the entrepreneurs’ theory of action formation process

As illustrated in Figure 5, the instructions of explicit methods such as the lean startup
methodology serve as a catalyst to both experiential and vicarious learning processes.
In pedagogical settings such as prescriptive accelerators, entrepreneurs accumulate
knowledge that is largely – but not exclusively – acquired through second-hand experiences
(Bandura, 1977). The vicariously acquired knowledge brings about a set of changes to
entrepreneurs’ thinking and actions. Through repeated experiential processes of single-loop
and double-loop learning, parts of the accumulated knowledge become internalised.
It should be noted that not all the acquired knowledge needed to undergo processes of
experiential learning. By virtue of participating in pedagogical settings, entrepreneurs
adhere to newly adopted governing variables and related action strategies. The cumulative
outcome of these two theoretically distinct learning modes is the modification of the existing
entrepreneurs’ theory of action. The updated entrepreneurs’ theory of action is context- and
path-dependent and largely conditioned by the consequences of adhering to the instructions
of the methodology. What distinguishes this theory of action from the lean startup
methodology is the inclusion of context-specific experiences and a set of personal heuristics.

Implications
The findings of this paper contribute to the literature on accelerators, the lean startup
methodology and entrepreneurial learning and have implications for theory and practice.
Taken together, two main contributions stand out. The first contribution concerns the
literature on accelerators and the lean startup methodology. It sheds light on the novel
phenomenon of “prescriptive accelerators” where systematic methods such as the lean
startup methodology are employed as structuring frameworks to guide entrepreneurial
action. As the findings suggest that participation in a prescriptive accelerator
fundamentally impacts the entrepreneurs’ theory of action, the agenda should cater for
an environment where modifying governing variables and action strategies is planned and
is, therefore, both a goal and an outcome. Moreover, by presenting the concluding
entrepreneurs’ theory of action, this paper alludes to some of the important consequences of
following the lean startup methodology. They include but are not limited to the conflicts that
adhering to its instructions may inflict on the entrepreneur-investor dyad (Khanin and
Turel, 2015), and on team members, and the dilemma of simultaneously following the
instructions of the lean startup methodology and delivering to existing customers.
 The findings of this paper provide further insights for accelerator managers. Enacting the
These insights can be used to reflect on the existing structure of the activities and lean startup
services offered. In order for these accelerators to be effective catalysts of action, various methodology
ways to impact both governing variables and action strategies should be considered.
Previous research suggests that contexts that provide entrepreneurs with the possibility to
combine experiential and vicarious learning increase perseverance in difficult conditions
(Bruning, 1965). An instance of such contexts is “prescriptive accelerators”. Therefore, it is 833
advisable that accelerator managers provide entrepreneurs with environments where
opportunities to learn both vicariously and experientially are readily available. These two
learning modes should be seen as vehicles for accelerating knowledge accumulation and
internalisation. As entrepreneurs like any other human “learn faster than do the performers
of the shared experiences” while completing tasks which require more conceptual rather
than manual skills (Bandura, 1977, p. 122), i.e. entrepreneurship, re-thinking the agenda of
accelerator programmes becomes imperative. Therefore, these programmes should
incorporate carefully planned vicarious and observational activities into their pedagogical
agenda (Hoover et al., 2012). Following up vicarious learning episodes with concrete
activities fosters experiential learning by releasing entrepreneurs from the heavy cognitive
demands of experiential efforts (Kolb and Kolb, 2005). Moreover, accelerator programme
managers need to be upfront in regard to recommendations on how entrepreneurs should
deal with the consequences of adhering to them.
The second contribution of this paper relates to the literature on entrepreneurial
learning. Contrary to the prevailing understanding that most of the learning in
entrepreneurial settings is experiential in nature (Cope, 2005b), the findings of this study
indicate that in the pedagogical context of prescriptive accelerators, vicarious
learning often precedes and informs pro-active experiential learning. Through
bypassing the necessity for some of the individual experiences, the second-hand
knowledge acquired acts as a script to guide the actions and interactions of entrepreneurs.
This suggests that in addition to learning that is unguided and experiential,
entrepreneurship scholars should also focus on learning processes that are not purely
grounded in action and experience. Moreover, amid the confusion as to the nature of
interactions between these two modes of learning (Haas and Hansen, 2005; Bresman, 2010;
Argote and Miron-Spektor, 2011), this paper echoes Hoover et al.’s (2012) results.
The findings highlight that vicarious learning could both replace and complement the
need for direct experiences, depending on the context of learning. The importance of these
vicarious processes is the role they play in reducing the economic and psychological costs
and heavy cognitive demands of learning and performing skills. However, it should be
noted that not all of the experiences should or even could be replaced by vicarious
activities. Lastly, the proposed theoretical model provides insights into the mechanisms
through which vicarious and experiential learning occur and result in entrepreneurs’
theory of action. The model contributes to our understanding of the modifications to the
entrepreneurs’ theory of action by accounting for the stimuli that incite and the
mechanisms that shape these modifications.

Conclusions and future research

While the phenomenon of prescriptive accelerators and the lean startup methodology are
becoming more popular, this paper has explored how the instructions of the lean startup
methodology are enacted in the pedagogical setting of a prescriptive accelerator
programme. Through a phenomenological interview-based approach, this paper makes a
number of contributions. Taken together, the findings contribute to an understanding of the
theoretical and practical aspects of the lean startup methodology and the novel phenomenon
of “prescriptive accelerators”.
IJEBR There are two main limitations to this empirical study. First, the reliance on interviews at
23,5 two points in time as the main source of data. As interviews provide a snapshot of the
process, future research can provide a more fine-grained account of the evolution of
the entrepreneurs’ theory of action over time by relying on multiple sources of data. Second,
this study is conducted in the context of one Swedish accelerator and poses limitations in
regard to the generalisability of the findings. It is, therefore, necessary to focus on other
834 contexts and other countries.
There are a number of avenues for future research. First, future research could explore
the mechanisms that bridge vicarious and experiential processes (see Holcomb et al., 2009).
Second, as the lean startup methodology is being appropriated to larger and more
established organisations, future research could investigate the possible organisational
conflicts that the lean startup methodology may produce. Lastly, it would be interesting to
provide answers to how entrepreneurs best internalise explicit instructions of prescriptive
methodologies. To do this, scholars could look into how transfer mechanisms from
explicit to implicit knowledge play out in the context of accelerators. Finding answers to
these questions can help scholars to better assist entrepreneurs in transforming the
instructions into action.

Note
1. Indirect, imitative, no-trial and observational learning have been previously and interchangeably
employed in the literature to refer to ideas encompassed by vicarious learning.

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Corresponding author
Yashar Mansoori can be contacted at: yashar.mansoori@chalmers.se

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