4. GENERAL OVERVIEW
Research Experiment
Subjects
27 Expert Entrepreneurs {founders of
companies from $200M to $6.5B}
method
Protocol Analysis
{80 hours of tape, 500 pages of data}
theory
Effectuation: Elements of
Entrepreneurial Expertise, 2005
Source: www.effectuation.org
6. CONTEXT
Focus: achieving desired Focus: using a set of
goal through a specific evolving means to achieve
set of given means new and different goals
Source: www.effectuation.org
7. CONTEXT
Causation Effectuation
“If I can control the
“If I can predict future, I do not need to
the future, I can predict it”
control it”
Source: www.effectuation.org
8. HEURISTIC VS. ALGORITHM
HEURISTIC ALGORITHM
Problem-solving step-by-step procedure
technique that involves with a finite number of
creating a speculative steps that seeks a
formulation and self-led specific outcome
investigation to reach
some desired outcome. recursive
most quintessential
heuristic is “trial and
error.”
Source: www.effectuation.org
9. Source:
CAUSATION
Effectuation:
Elements of
Entrepreneurial
Expertise
By Saras D.
Sarasvathy
VS
Printed in 2008
EFFECTUATION
11. BIRD IN HAND PRINCIPLE
start with your means
who I am
what I know
whom I know
imagine possibilities
that originate from their
means
Source: www.effectuation.org
12. AFFORDABLE LOSS
Focus on downside risk
limit risk by
understanding what
they can afford to lose
at each step, instead of
seeking large all-or-
nothing opportunities
choose goals and
actions where there is
upside even if the
downside ends up
happening
Source: www.effectuation.org
13. LEMONADE
Leverage contigencies
Invite the surprise
factor instead of
making “what-if”
scenarios to deal with
worst-case scenarios
experts interpret “bad”
news and surprises as
potential clues to
create new markets
Source: www.effectuation.org
14. PATCHWORK QUILT
Form partnerships
build partnerships with
self-selecting
stakeholders
obtain pre-commitments
from these key partners
early on in the
venture, experts reduce
uncertainty and co-create
the new market with its
interested participants
Source: www.effectuation.org
15. PILOT-IN-THE-PLANE
Control vs. Predict
Focus on activities
within their control
expert entrepreneurs
know their actions will
result in the desired
outcomes
the future is neither
found nor
predicted, but rather
made
Source: www.effectuation.org
