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How Tech Startups Deploy Agility in Their Practices and What Affects Their Choices

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How Tech Startups Deploy Agility in Their Practices and What Affects Their Choices How Tech Startups Deploy Agility In Their Practices and What Affects Their Choices A comparative case study research Thanasis Mandaltsis - 11391316 MSc BA – Digital Business | Supervisor – Dr. Peter van Baalen Statement of Originality This document is written by Student Thanasis Mandaltsis who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents. II Abstract Agile project management is an alternative to traditional project management techniques that focuses on people, communications, product, and flexibility. While originally created for software development projects, agile has started diffusing in the business sector offering ventures flexibility and the ability to efficiently handle change in today’s ever-changing business environment. Nevertheless, as transitioning from traditional management structures to agile might be challenging, more often than not, agile methodologies are being implemented in startup environments to help early ventures deal with the high level of ambiguity that surrounds them. The following research examines how entrepreneurs in thus said ventures choose the agile methods to be used – as well the factors that affect those choices – through six semi-structured interviews with tech startups. The results indicate that the complexity of a growing business venture does not allow for strict adoption of a single agile framework. In contrast, it calls for a combination of aspects from different methods according to the needs of the startup and most importantly great devotion to the values and principles of the Agile Manifesto (2001). Last but not least, the choice of the various agile aspects is affected by the prior knowledge and vision of the entrepreneurs an in turn by the product and its particularities. Keywords: Agile Project Management, Agile Work Practices, Agile, Startups, Tech-Startups, Information and Communication Technologies, ICT, Entrepreneurship, Innovation III Table of Contents 1. Introduction -------------------------------------------------------------------------------------------- Pg. 1 2. Literature Review-------------------------------------------------------------------------------------- Pg. 2 2.1. Agile Work Practices ---------------------------------------------------------------------- Pg. 4 2.2. Entrepreneurship, Innovation and Startups --------------------------------------------- Pg. 5 2.3. ICT and the Nature of Work -------------------------------------------------------------- Pg. 7 2.4. Information, Startup Unicorns and Project Management ----------------------------- Pg. 8 3. Conceptual Framework ------------------------------------------------------------------------------ Pg. 10 3.1. Agility and Methodologies -------------------------------------------------------------- Pg. 10 3.2. SCRUM ------------------------------------------------------------------------------------- Pg. 12 3.3. Extreme Programming -------------------------------------------------------------------- Pg. 14 3.4. Feature Driven Development ------------------------------------------------------------ Pg. 15 3.5. Test Driven Development ---------------------------------------------------------------- Pg. 17 3.6. Dynamic Systems Development Method ----------------------------------------------- Pg. 17 3.7. KANBAN ----------------------------------------------------------------------------------- Pg. 18 3.8. Methodologies Comparison -------------------------------------------------------------- Pg. 19 4. Research Design -------------------------------------------------------------------------------------- Pg. 21 5. Research Instruments --------------------------------------------------------------------------------- Pg. 22 6. Results -------------------------------------------------------------------------------------------------- Pg. 23 6.1. Mini Case Studies ------------------------------------------------------------------------- Pg. 23 6.2. Travis the Translator ---------------------------------------------------------------------- Pg. 24 6.3. The Main Ingredient ----------------------------------------------------------------------- Pg. 29 6.4. ThirdSkin ----------------------------------------------------------------------------------- Pg. 33 IV 6.5. BrainsFirst ---------------------------------------------------------------------------------- Pg. 36 6.6. ParkFlyRent -------------------------------------------------------------------------------- Pg. 40 6.7. Seedrs --------------------------------------------------------------------------------------- Pg. 44 6.8. Analysis ------------------------------------------------------------------------------------- Pg. 48 7. Discussion ---------------------------------------------------------------------------------------------- Pg. 58 8. Conclusion --------------------------------------------------------------------------------------------- Pg. 63 8.1. Theoretical Contribution ------------------------------------------------------------------ Pg. 64 8.2. Practical Implications --------------------------------------------------------------------- Pg. 65 8.3. Limitations ---------------------------------------------------------------------------------- Pg. 66 8.4. Future Research ---------------------------------------------------------------------------- Pg. 66 9. Bibliography ------------------------------------------------------------------------------------------- Pg. 67 Appendices ------------------------------------------------------------------------------------------------ Pg. 71 Interview Appendix: Questionnaire ---------------------------------------------------------- Pg. 71 Interview Appendix: Travis the Translator -------------------------------------------------- Pg. 73 Interview Appendix: The Main Ingredient -------------------------------------------------- Pg. 77 Interview Appendix: ThirdSkin --------------------------------------------------------------- Pg. 80 Interview Appendix: BrainsFirst -------------------------------------------------------------- Pg. 82 Interview Appendix: ParkFlyRent ------------------------------------------------------------ Pg. 84 Interview Appendix: Seedrs ------------------------------------------------------------------- Pg. 87 V 1. Introduction “Music is a moral law. It gives soul to the universe, wings to the mind, flight to the imagination, a charm to sadness and life to everything” were the words of ancient Greek philosopher Plato. Music means setting no boundaries, constantly creating new combinations and changing. In those words, it is difficult to find a better representative from the business world for the ‘concept’ of music than the Swedish pioneer, Spotify. Spotify is a company that is transforming the music industry offering a music player where one can seamlessly find and play any song. The number of active users on Spotify recently reached 100 million (statista.com 2016) which adequately shows the impact that the company has on spreading music. However, while this is a noble cause it is not the only reason the Swedish company is steps ahead of the competition. The secrets behind the company’s success that allows Spotify deliver music to such a huge audience efficiently are; alignment and autonomy as well as innovation over predictability (Kniberg 2014). Before the craze of the past years, Spotify was just a Swedish startup from Stockholm taking its first steps. The first public beta of the Spotify player was released in 2007 and a year later the streaming service was officially launched by the startup Spotify AB. Since then the music giant has been growing in rapid rates to more than 1600 employees in twenty locations worldwide (Wikipedia), reaching a point where challenges regarding its inherent flexibility emerged as, while it is easy for startups to embrace agility and flexibility in their work practices, it gets difficult when scaling up. However, these are important aspects that keep employees satisfied and foster innovativeness in a company. Ek and Lorentzon, founders of Spotify understood that, and moreover, that the constant creation of novel combinations was as important in their case as it is in music. Therefore, in order to remain competitive and innovative they had to keep operating without losing their original agility. This resulted in the creation of a tailored agile method of work 1 that if anything, has helped the company expand in numbers and rise in popularity. According to Bloomberg, Spotify is now the ‘biggest player’ in music industry showing no signs of slowing down despite the recent entrance of significant competitors such as Apple Music, Pandora Media Inc. and an expected reaction to those by Amazon as well (Shaw 2016). This research will be devoted to the examination of the relation between agility in work practices and startups as well as to the composition of generic guidelines for implementing agility in an enterprise, answering the following question: How do tech startups deploy agility in their practices? - Do they create their own or use existing tools? - Do they use a single tool or combine more than one? - What common traits can be observed in their practices? - Which factors affect the choice of those traits in the distinctive
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