Transforming insight into innovation : how startups use customer insight to create new products and services

Abstract

Customer insight use in startups is an area that is incompletely understood. Most studies relating to customer insight processes and its value in marketing decisions relate to established corporates, while the focus on startups’ capabilities and exploitation of customer insight remains scarce. The use of this strategic form of knowledge in startups is anticipated to take a critical strategic role as startups strive to create new offerings in fast-evolving markets. This doctoral study investigates startups’ use of customer insight and the contribution it provides to these organisations by positioning itself at the intersection of marketing, organisational learning, and entrepreneurship theoretical domains to offer an interdisciplinary understanding. A systematic literature review helped conceptualise a processual framework that describes the use of customer insight in startups. This conceptualisation is then investigated through a multiple case study approach involving 35 startups in 15 countries. It uses several sources of data, including interviews with startup founders and a validating seminar. The study proposes a framework that offers a detailed understanding of the iterative, stepwise customer insight use process within startups. Customer insight processing emerges as an ongoing learning cycle involving five key stages: acquisition, dissemination, interpretation, implementation, and storage. The study also finds that each stage occurs at different levels of analysis: individual, group and organisation. Facilitating and hindering factors affecting insight use at each stage of the process at all three levels of analysis are also observed. Customer insight assumes a critical role in organisational learning, where valuable lessons from a firm’s interaction with its markets empower startups to develop new offerings that satisfy customers’ needs and wants. The study thus offers a valid contribution relevant to researchers and practitioners on the strategic value of customer insight, presenting an interesting avenue for future research.