Skip to main content
Log in

The entrepreneurial logic of startup software development: A study of 40 software startups

  • Published:
Empirical Software Engineering Aims and scope Submit manuscript



Software startups are an essential source of innovation and software-intensive products. The need to understand product development in startups and to provide relevant support are highlighted in software research. While state-of-the-art literature reveals how startups develop their software, the reasons why they adopt these activities are underexplored.


This study investigates the tactics behind software engineering (SE) activities by analyzing key engineering events during startup journeys. We explore how entrepreneurial mindsets may be associated with SE knowledge areas and with each startup case.


Our theoretical foundation is based on causation and effectuation models. We conducted semi-structured interviews with 40 software startups. We used two-round open coding and thematic analysis to describe and identify entrepreneurial software development patterns. Additionally, we calculated an effectuation index for each startup case.


We identified 621 events merged into 32 codes of entrepreneurial logic in SE from the sample. We found a systemic occurrence of the logic in all areas of SE activities. Minimum Viable Product (MVP), Technical Debt (TD), and Customer Involvement (CI) tend to be associated with effectual logic, while testing activities at different levels are associated with causal logic. The effectuation index revealed that startups are either effectuation-driven or mixed-logics-driven.


Software startups fall into two types that differentiate between how traditional SE approaches may apply to them. Effectuation seems the most relevant and essential model for explaining and developing suitable SE practices for software startups.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7

Similar content being viewed by others




  • Alvarez C (2014) Lean Customer Development, O’Reilly Media, Sebastopol, CA

  • Alvarez SA, Barney JB (2005) How do entrepreneurs organize firms under conditions of uncertainty?

  • Aurum A, Wohlin C (2003) The fundamental nature of requirements engineering activities as a decision-making process. IST 45(14):945–954

  • Ayala C, Nguyen-Duc A, Franch X, Höst M, Conradi R, Cruzes D, Babar MA (2018) System requirements-OSS components: matching and mismatch resolution practices – an empirical study. Empir Softw Eng 23(6): 3073–3128.

  • Bajwa SS (2020) Pivoting in software startups. In: Nguyen-Duc A, Münch J, Prikladnicki R, Wang X, Abrahamsson P (eds) Fundamentals of software startups: Essential engineering and business aspects. Springer International Publishing, Springer Nature Switzerland AG, pp 27–43

    Chapter  Google Scholar 

  • Bajwa SS, Wang X, Duc AN, Abrahamsson P (2017) “Failures” to be celebrated: an analysis of major pivots of software startups. Empir Softw Eng 22(5):2373–2408

    Article  Google Scholar 

  • Barney J (1991) Firm resources and sustained competitive advantage. J Manage 17(1):99–120

  • Barton Cunningham J, Gerrard P, Schoch H, Lai Hong C (2002) An entrepreneurial logic for the new economy. Manag Decis 40(8):734–744.

    Article  Google Scholar 

  • Beck K, Andres C (2004) Extreme Programming Explained: Embrace Change, 2nd edn. Addison-Wesley Professional, Boston

    Google Scholar 

  • Beck K, Beedle M, van Bennekum A, Cockburn A, Cunningham W, Fowler M  (2001) Manifesto for Agile Software Development [Internet]. Manifesto for Agile Software Development. Available from:

  • Berends H, Jelinek M, Reymen I, Stultiëns R (2013) Product innovation processes in small firms: Combining entrepreneurial effectuation and managerial causation. J Prod Innov 31(3):616–635.

  • Berg V, Birkeland J, Nguyen-Duc A, Pappas I, Jaccheri L (2018) Software startup engineering: A systematic mapping study. J Syst Softw 144:255–274

    Article  Google Scholar 

  • Berg V, Birkeland J, Nguyen-Duc A, Pappas IO, Jaccheri L (2020) Achieving agility and quality in product development: an empirical study of hardware startups. J Syst Softw 167. 10.1016/jjss2020110599

  • Blank S (2013) An MVP is not a cheaper product it’s about smart learning. Steve Blank. URL: Access dated: April 2019

  • Blank SG (2007) The Four Steps to the Epiphany, 2nd edn., San Francisco

    Google Scholar 

  • Blank SG, Dorf B (2012) The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company, K&S Ranch, Pescadero, CA

  • Boland RJ (2008) Decision making and sensemaking. In: Burstein F, Holsapple CW (eds) Handbook on decision support systems 1: Basic themes international handbooks information system. Springer-Verlag, Berlin Heidelberg, pp 55–63

    Chapter  Google Scholar 

  • Bosch J, Holmström Olsson H, Björk J, Ljungblad J (2013) The Early Stage Software Startup Development Model: A Framework for Operationalizing Lean Principles in Software Startups. In: Fitzgerald B, Conboy K, Power K, Valerdi R, Morgan L, Stol K-J (eds) Lean Enterprise Software and Systems. Springer, Berlin, Heidelberg, pp 1–15

    Google Scholar 

  • Bourque P, Fairley RE (2014) Guide to the software engineering body of knowledge (SWEBOK (R)): Version 30. IEEE Computer Society Press

  • Boyatzis RE (1998) Transforming qualitative information: Thematic analysis and code development. Sage Publications Inc

  • Braun V, Clarke V (2006) Using thematic analysis in psychology. Qual Res Psychol 3(2):77–101.

  • Brettel M, Mauer R, Engelen A, Küpper D (2012) Corporate effectuation: Entrepreneurial action and its impact on R&D project performance. J Bus Ventur 27:167–184.

  • Bygrave WD, Hofer CW (1991) Theorizing about entrepreneurship. Entrepreneurship: Theory and Practice 16(2):13–22.

  • Chandler GN, DeTienne DR, McKelvie A, Mumford TV (2011) Causation and effectuation processes: A validation study. J Bus Ventur 26(3):375–390.

  • Cico O, Duc AN, Jaccheri L (2020) An Empirical Investigation on Software Practices in Growth Phase Startups. In: Proceedings of the Evaluation and Assessment in Software Engineering [Internet]. New York, NY, USA: Association for Computing Machinery; 2020. pp.282–7

  • Collis J, Hussey R (2009) Business research: A practical guide for undergraduate and postgraduate students. Palgrave MacMillan, UK. https://www.macmillanihecom/page/detail/Business-Research/?K=9780230301832

  • Corbin JM, Strauss A (1990) Grounded theory research: Procedures canons and evaluative criteria. Qual Sociol 13(1):3–21.

  • Cruzes DS, Dyba T (2011) Recommended steps for thematic synthesis in software engineering In: 2011 International symposium on empirical software engineering and measurement. IEEE, pp 275–284.

  • Daher M, Carré D, Jaramillo A, Olivares H, Tomicic A (2017) Experience and Meaning in Qualitative Research: A Conceptual Review and a Methodological Device Proposal. FQS 18(3)

  • de O Melo C S, Cruzes D, Kon F, Conradi R (2013) Interpretative case studies on agile team productivity and management. Inf Softw Technol 55(2):412–427.

  • Dew N, Read S, Sarasvathy SD, Wiltbank R (2009) Effectual versus predictive logics in entrepreneurial decision-making: Differences between experts and novices. J Bus Ventur 24(4):287–309.

  • Duc AN, Abrahamsson P (2016) Minimum viable product or multiple facet product? The role of MVP in software startups. In: Sharp H, Hall T (eds) Agile processes in software engineering and extreme programming lecture notes in business information processing. Springer International Publishing, Cham, pp 118–130

    Google Scholar 

  • Easterbrook S, Singer J, Storey MA, Damian D (2008a) Selecting empirical methods for software engineering research. Springer, London, pp 285–311

    Google Scholar 

  • Easterbrook S, Singer J, Storey MA, Damian D (2008) Selecting Empirical Methods for Software Engineering Research. In F. Shull, J. Singer, & D. I. K. Sjøberg (Eds.), Guide to Advanced Empirical Software Engineering (pp. 285–311). Springer.

  • Eisenhardt KM (1989) Building theories from case study research. Acad Manage Rev 14(4):532–550

    Article  Google Scholar 

  • Fagerholm F, Sanchez Guinea A, Mäenpäa H, Münch J (2017) The right model for continuous experimentation. J Syst Soft 123:292–305.

  • Fisher G (2012) Effectuation causation and bricolage: A behavioral comparison of emerging theories in entrepreneurship research. ETP 36(5):1019–1051

    Google Scholar 

  • Gautam N, Singh N (2008) Lean product development: Maximizing the customer perceived value through design change (redesign). Int J Prod Econ 114(1):313–332

    Article  Google Scholar 

  • Gemmell RM, Boland RJ, Kolb DA (2012) The socio-cognitive dynamics of entrepreneurial ideation. Entrep Theory Pract 36(5):1053–1073

    Article  Google Scholar 

  • Ghezzi A (2018) Digital startups and the adoption and implementation of lean startup approaches: Effectuation bricolage and opportunity creation in practice.

  • Giardino C, Bajwa SS, Wang X, Abrahamsson P (2015) Key challenges in early-stage software startups. In: Lassenius C, Dingsøyr T, Paasivaara M (eds) Agile processes in software engineering and extreme programming lecture notes in business information processing. Springer International Publishing, Cham, pp 52–63

    Google Scholar 

  • Giardino C, Paternoster N, Unterkalmsteiner M, Gorschek T, Abrahamsson P (2016) Software development in startup companies: The greenfield startup model. IEEE Trans Softw Eng 42(6):585–604.

  • Giardino C, Unterkalmsteiner M, Paternoster N, Gorschek T, Abrahamsson P (2014) What Do We Know about Software Development in Startups? IEEE Softw 31(5):28–32

    Article  Google Scholar 

  • Giardino C, Wang X, Abrahamsson P (2014) Why early-stage software startups fail: a behavioral framework. International conference of software business. Springer, Cham, pp 27–41

    Google Scholar 

  • Gothelf J (2013) Lean UX: Applying Lean Principles to Improve User Experience. O’Reilly, USA

    Google Scholar 

  • Harms R, Schiele H (2012) Antecedents and consequences of effectuation and causation in the international new venture creation process. IJE 10(2):95–116.

  • Hevner A, Malgonde O (2019) Effectual application development on digital platforms. Electron Mark 29(3):407–421

  • Highsmith J, Cockburn A (2001) Agile software development: the business of innovation. Computer 34(9):120–127

    Article  Google Scholar 

  • Hokkanen L, Väänänen-Vainio-Mattila K (2015) UX Work in Startups: Current Practices and Future Needs. In: Lassenius C, Dingsøyr T, Paasivaara M (eds) Agile Processes in Software Engineering and Extreme Programming. Springer International Publishing, Cham, pp 81–92

    Chapter  Google Scholar 

  • Kemell KK, Ventilä E, Kettunen P, Mikkonen T (2019) Amidst uncertainty – or not? Decision-making in early-stage software startups. In: Hyrynsalmi S, Suoranta M, Nguyen-Duc A, Tyrvainen P, Abrahamsson P (eds) Software business lecture notes in business information processing. Springer, Cham, pp 369–377

    Google Scholar 

  • Khanna D, Nguyen-Duc A, Wang X (2018) From MVPs to pivots: A hypothesis-driven journey of two software startups. In: Wnuk K, Brinkkemper S (eds) Software business lecture notes in business information processing. Springer International Publishing, Cham, pp 172–186

    Google Scholar 

  • Khurum M, Fricker S, Gorschek T (2015): The contextual nature of innovation – an empirical investigation of three software intensive products. Inf Softw Technol 57:595–613.

  • Klotins E, Unterkalmsteiner M, Chatzipetrou P, Gorschek T, Prikladniki R, Tripathi N, Pompermaier L (2019) A progression model of software engineering goals challenges and practices in start-ups. IEEE Trans Softw Eng.

  • Klotins E, Unterkalmsteiner M, Gorschek T (2019) Software engineering in start-up companies: An analysis of 88 experience reports. Empir Softw Eng 24(1):68–102.

  • Kruchten P, Nord RL, Ozkaya I (2012) Technical debt: From metaphor to theory and practice. IEEE Softw 29(6):18–21

    Article  Google Scholar 

  • Ladd T, Lyytinen K, Gemmell R (2015) How customer interaction and experimentation advance new venture concepts in a cleantech accelerator. Acad Manag Proc 2015(1):11415

    Article  Google Scholar 

  • Lindgren E, Münch J (2016) Raising the odds of success: the current state of experimentation in product development. IST 77:80–91.

  • Mansoori Y, Lackéus M (2019) Comparing effectuation to discovery-driven planning prescriptive entrepreneurship business planning lean startup and design thinking. Small Bus Econ 54(3):791–818.

  • Mansoori Y (2015) Entrepreneurial methods. Licentiate dissertation. Chalmers University of Technology, Gothenburg, Sweden

    Google Scholar 

  • Mansoori Y, Lackéus M (2020) Comparing effectuation to discovery-driven planning, prescriptive entrepreneurship, business planning, lean startup, and design thinking. Small Bus Econ 54(3):791–818.

    Article  Google Scholar 

  • McKelvie A, Chandler GN, DeTienne DR, Johansson A (2020) The measurement of effectuation: highlighting research tensions and opportunities for the future. Small Bus Econ 54(3):689–720.

  • Melegati J, Goldman A, Kon F, Wang X (2019) A model of requirements engineering in software startups. IST 109: 92–107.

  • Nambisan S (2017) Digital entrepreneurship: Toward a digital technology perspective of entrepreneurship. ETP 41(6):1029–1055.

  • Nguven-Duc A, Münch J, Prikladnicki R, Wang X, Abrahamsson P (eds) (2020) Fundamentals of software startups: Essential engineering and business aspects, 1st edn. Springer Nature Switzerland AG

  • Nguyen-Duc A, Dahle Y, Steinert M, Abrahamsson P (2017a) Towards understanding startup product development as effectual entrepreneurial behaviors. In: Felderer M, Méndez Fernandez D, Turhan B, Kalinowski M, Sarro F, Winkler D (eds) Product-focused software process improvement lecture notes in computer science. Springer International Publishing, Cham, pp 265–279

    Chapter  Google Scholar 

  • Nguyen-Duc A, Seppanen P, Abrahamsson P (2015) Hunter-gatherer cycle: A conceptual model of the evolution of software startups. In: ICSSP 2015: Proceedings of the 2015 International Conference on Software and System Process. ACM, New York, NY, USA, pp 199–203.

  • Nguyen-Duc A, Shah SMA, Ambrahamsson P (2016) Towards an early-stage software startups evolution model. In: Software Engineering and Advanced Applications (SEAA) 2016: 42nd Euromicro Conference. IEEE, pp 120–127

  • Nguyen-Duc A, Wang X, Abrahamsson P (2017) What influences the speed of prototyping? An empirical investigation of twenty software startups. In: Baumeister H, Lichter H, Reinisch M (eds) Agile processes in software engineering and extreme programming lecture notes in business information processing. Springer International Publishing, pp 20–36

  • Norman D, Draper S (1986) User Centered System Design: New Perspectives on Human-Computer Interaction. CRC Press, FL, USA, p 1986

    Book  Google Scholar 

  • Nummela N, Saarenketo S, Jokela P, Loane S (2014) Strategic decision-making of a born global: A comparative study from three small open economies. MIR 54(4):527–550.

  • Oates BJ (2005) Researching information systems and computing. Sage, Newbury Park, California

    Google Scholar 

  • Ojala A (2015) Business models and opportunity creation: how IT entrepreneurs create and develop business models under uncertainty. 26(5):451-476

  • Ojala A (2016) Discovering and creating business opportunities for cloud services. J Syst Softw 113:408–417

    Article  Google Scholar 

  • Pantiuchina J, Mondini M, Khanna D, Wang X, Abrahamsson P (2017) Are software startups applying agile practices? The state of the practice from a large survey. In: Baumeister H, Lichter H, Reinisch M (eds) Agile processes in software engineering and extreme programming lecture notes in business information processing. Springer, Cham, pp 167–183

    Google Scholar 

  • Paternoster N, Giardino C, Unterkalmsteiner M, Gorschek T, Abrahamsson P (2014) Software development in startup companies: A systematic mapping study. Inf Softw Technol 56(10):1200–18.

  • Pitchbook (2019) 4q 2018 PitchBook-NVCA venture monitor Pitchbook Date assessed: April 2019

  • Ralph P (2016) Software engineering process theory: A multi-method comparison of sensemaking-coevolution-implementation theory and function-behavior-structure theory. IST 70:232–250.

  • Read S, Song M, Smit W (2009) A meta-analytic review of effectuation and venture performance. J Bus Ventur 24(6):573–587.

  • Reymen I, Andries P, Berends H, Mauer R, Stephan U, Burg EV (2015) Understanding dynamics of strategic decision making in venture creation: A process study of effectuation and causation. Strateg Entrepreneurship J 9(4):351–379.

  • Reymen I, Berends H, Oudehand R, Stultiëns R (2017) Decision making for business model development: a process study of effectuation and causation in new technology-based ventures. R D Manag. 47(4):595–606.

  • Ries E (2011) The lean startup: how today’s entrepreneurs use continuous innovation to create radically successful businesses. Crown Publishing Group, USA

    Google Scholar 

  • Runeson P, Höst M (2009) Guidelines for conducting and reporting case study research in software engineering. Empir Softw Eng 14(2):131

    Article  Google Scholar 

  • Sarasvathy SD (2001) Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. Acad Manage Rev 26(2):243–263

    Article  Google Scholar 

  • Sarasvathy SD, Dew N (2005a) Entrepreneurial logics for a technology of foolishness. SJM 21(4):385–406.

  • Sarasvathy SD, Dew N (2005b) New market creation through transformation. J Evol Econ 15(5):533–565.

  • Seaman C, Guo Y (2011) Measuring and monitoring technical debt. Adv Comput 82:25–46

    Article  Google Scholar 

  • Seaman CB (1999) Qualitative methods in empirical studies of software engineering. IEEE Trans Softw Eng 25(4):557–572

    Article  Google Scholar 

  • Signoretti I, Marczak S, Salerno L, Lara A d, Bastos R. (2019) Boosting Agile by Using User-Centered Design and Lean Startup: A Case Study of the Adoption of the Combined Approach in Software Development. In: 2019 ACM/IEEE International Symposium on Empirical Software Engineering and Measurement (ESEM). pp. 1–6.

  • Smolka KM, Verheul I, Burmeister-Lamp K, Heugens PP (2016) Get it together! synergistic effects of causal and effectual decision-making logics on venture performance. ETP 42(4): 571–604

  • Steininger DM (2019) Linking information systems and entrepreneurship: A review and agenda for IT-associated and digital entrepreneurship research. Inf Syst J 29(2):363–407.

  • Stol K, Ralph P, Fitzgerald B (2016) Grounded Theory in Software Engineering Research: A Critical Review and Guidelines. 2016 IEEE/ACM 38th International Conference on Software Engineering (ICSE), 120–131.

  • Sutton SM (2000) The role of process in software start-up. IEEE Soft 17(4):33–39.

  • Tell P, Klünder J, Küpper S, Raffo D, MacDonell SG, Münch J et al (2019) What are Hybrid Development Methods Made Of? An Evidence-Based Characterization. In: 2019 IEEE/ACM International Conference on Software and System Processes (ICSSP) pp. 105–14.

  • Tripathi N, Klotins E, Prikladnicki R, Oivo M, Pompermaier LB, Kudakacheril AS, Unterkalmsteiner M, Liukkunen K, Gorschek T (2018) An anatomy of requirements engineering in software startups using multi-vocal literature and case survey. J Syst Soft 146:130–151.

  • Tripathi N, Oivo M, Liukkunen K, Markkula J (2019) Startup ecosystem effect on minimum viable product development in software startups. IST 114:77–91

    Google Scholar 

  • Trochim W (2001) Research Methods Knowledge Base. Atomic Dog Publishing, Cincinnati, OH, USA

    Google Scholar 

  • Tuckman BW (1965) Developmental sequence in small groups. Psychol Bull 63(6):384–399

    Article  Google Scholar 

  • Unterkalmsteiner M, Abrahamsson P, Wang XF, Anh ND, Shah S, Bajwa SS, Baltes GH, Conboy K, Cullina E, Dennehy D, Edison H, Fernandez-Sanchez C, Garbajosa J, Gorschek T, Klotins E, Hokkanen L, Kon F, Lunesu I, Marchesi M, Morgan L, Oivo M, Selig C, Seppanen P, Sweetman R, Tyrvainen P, Ungerer C, Yague A (2016) Software startups: a research agenda. E-Informatica Softw Eng J 10(1):89–123.

  • von Hippel E (1986) Lead users: A source of novel product concepts. Manage Sci 32(7):791–805.

  • Walsham G (1995) The emergence of interpretivism in IS research. Inf Syst Res 6(4):376–394.

  • Weick K (1995) Sensemaking in Organisations. Sage, London

    Google Scholar 

  • Weick K, Sutcliffe KM, Obstfeld D (2005) Organizing and the process of sensemaking. Organ Sci 16(4):409–421

    Article  Google Scholar 

  • Wiltbank R, Dew N, Read S, Sarasvathy SD (2006) What to do next? The case for non-predictive strategy 27(10):981–998.

  • Wohlin C, Aurum A (2015) Towards a decision-making structure for selecting a research design in empirical software engineering. Empir Softw Eng 20(6):1427–1455.

  • Yaman SG, Sauvola T, Riungu-Kalliosaari L, Hokkanen L, Kuvaja P, Oivo M, Männisto T (2016) Customer involvement in continuous deployment: A systematic literature review. In: Daneva M, Pastor O (eds) Requirements engineering: Foundation for software quality lecture notes in computer science. Springer International Publishing, Cham, pp 249–265

    Google Scholar 

  • Yin RK (2003) Case study research: Design and methods, 3rd edn. Sage, London

    Google Scholar 

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Anh Nguyen-Duc.

Additional information

Communicated by Irit Hadar.

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Nguyen-Duc, A., Kemell, KK. & Abrahamsson, P. The entrepreneurial logic of startup software development: A study of 40 software startups. Empir Software Eng 26, 91 (2021).

Download citation

  • Accepted:

  • Published:

  • DOI: