Summary: Principles Of Entrepeneurship

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  • 1 Week 1: Effectuation

  • 1.1 Lecture 1A and B - Principles of Entrepreneurship and Effectuation

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  • What are 2 important facts about pursuit?

    • Most successful start-ups are teams 
    • Research: you can learn it. 
  • What are the 5 princepless of effectual reasoning? -  Sarasvathy's principles

    • Bird in hand principle 
    • Affordable loss principle 
    • Crazy quilt principle 
    • Lemonade principle 
    • Pilot in the plan principle 
  • How do you prepare for dinner? Causation vs Effectuation

    • Causation: plan for results and do groceries accordingly 
    • Effectuation: See what is in your fridge and make results  
  • Causal (managerial) versus effectual (Entrepreneurial) reasoning. What is the difference and what overlaps?

    • C: Selecting between given means to reach a pre-defined goal
    • E: Imagining a possible end using a given set of means
    • Varies between situations, often combined
      • Less uncertainty allows for more causal thinking 
  • What is the 'Bird in hand principle'?


    • Who am I? What do I know? Who do I know?
    • Check your means and look at which next action you can do best
    • Contrasts with: pre-set goals and opportunities
      • Beer knowledge about gardening 
  • What is 'Affordable loss principle'?

    • What are you willing to lose in order to get to the next step?
    • Contrasts with: expected returns 
  • What is the ' Crazy quilt principle'?

    • Create an alliance of people that form a committed partnership; Co-creation 
    • Contrasts with:  Competitive analysis 
  • What is the ' Lemonade principle' ?

    • Contingencies are turned into benefits 
    • Embrace surprises instead of focusing on what-if scenarios and worst-case scenarios 
    • Contrasts: avoiding surprises 
  • What is the ' Pilot in the place principle' ?

    • Prediction versus control 
    • Focus on activities within your control; Control the controllable 
    • Contracts with: the inevitable trends in the market.  
  • Wrap up: Effectuation theory: What it is and what it isn't

    • IS: A way of thinking, a set of heuristics, doing the do-able, how to get the sellable products and services established
    • IS NOT:  a system to tell you what to do, an algorithm, 'not planning', a way to launch an entire business 

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