Decision-Making Approaches and Entrepreneurs' Pivot Decisions? An RCT Experiment

Do decision-making approaches affect entrepreneurs’ pivot decisions on the Business Model Canvas? To address our research question, we investigated how decision-making approaches, namely the scientific method (Camuffo et al., 2024) and the effectuation method (Sarasvathy, 2008), affect entrepreneurs’ pivot decisions. In particular, we analysed how entrepreneurs tend to change blocks on the left or right of the Business Model Canvas BMC (Osterwalder, 2004), depending on the methods they are approaching. In order to achieve our goal, we based our research on entrepreneurial learning (Cohen et al., 2019; McDonald and Eisenhardt, 2020; Pillai et al. 2020), included in entrepreneurial theories (Ott and Hannah, 2024) and we applied it to the scientific method, according to the theory-and-evidence-based approach (Agarwal et al., 2024), and to Saras Sarasvathy's theory of effectuation (Sarasvathy, 2008), related to the evidence-based approach. By building on previous literature, little is known about which specifically BMC’s blocks entrepreneurs adopting these approaches tend to change, in particular during entrepreneurial training programs. In this vein, we collected evidence via a randomized control trial (RCT) experiment with 308 Italian early-stage startups randomly assigned to “treatment” (scientific, effectuation) and “control” group (trial-and-error), involved in a pre-acceleration program. We observed early-stage startups throughout and post-training and we compared differences concerning which side of the BMC entrepreneurs changed and how many times they made pivots to modify the BMC. We find that entrepreneurs using a scientific method are more likely to make one pivot both on the left and on the right side of the BMC compared to the control group. On the other hand, entrepreneurs using an effectuation method tend to make at least one pivot only on the right side compared to the control group. Furthermore, considering the cumulate number of pivots, we found that entrepreneurs who learn a scientific method made more pivots on the left side of the BMC. On the other hand, entrepreneurs approaching the effectuation method made more pivots on the right side of the BMC. These findings demonstrate that the scientific method and effectuation method can shape pivot decisions differently.