  With the increasing availability of software usage and the influence of the
Lean Startup mindset, more and more companies choose to innovate through
internal software startups. Such startups aim at developing new business models
while at the same time relying on the resources from the companies where they
emerged. The evidence from both researchers and practitioners indicates that
driving internal software startups is challenging. This paper seeks to address
this problem by asking the research question: how to make internal software
startups work? We examined a unique case of a venture builder, a company
primarily focusing on building internal software startups and launching them as
independent companies. Applying a Grounded Theory approach, we analyzed data on
four internal software startups at the case company. The results suggest that
four strategies drive the examined startups, cultural, financial, personnel,
and venture arrangement. We interpret our results by drawing on earlier
literature on intrapreneurship and internal ventures and suggest four
recommendations to succeed with internal software startups 1 establish shared
arenas for the employees, 2 provide necessary resources for experimentation in
the initial phase and increase them incrementally, 3 build up in-house product
management competence through coaching, and 4 harness employees own motivation
to develop their own ideas.
