Assignment 2

effectuation

effectuation is a way to describe how successful entrepreneurs think it turns out that successful
entrepreneurs think differently about the world than others. in this theory it emphasizes on making
decisions and performing actions in entrepreneurship. it is stated that entrepreneur identify the best
step by assessing the resources available in order to achieve his goals. entrepreneur figure out the best
way

expert entrepreneurs look around the means that they have at the disposal whether these means are
people, know-how, resources, and they determine what potential goals might be achieved with these
collections of means.

expert entrepreneurs don’t look at the means are static in contrast they continuously trying to evolve
their business and expand and manage their resources.

There are five principles of effectuation entrepreneurship

.worldview-control vs prediction

casual thinker believes in the actual working of day to day functions and they have fixed goals to
achieve. they also believe that we can predict the future and we cannot control it. they love market
resource financial models, and other tools that increases their perception. but in contrast the effectual
entrepreneurs have different view they believe that they can control the future don’t need to predict it
they can make things happen, they can

second principle of effectuation bird in hand is that what are the current resources you have at your
disposal right now. through this they can venture with different people. instead of having
predetermined in mind they can go for certain means. they look at three things who they are? what they
know?

who they know ?

co creation – crazy quilt

in co creation symbolizes a collaboration between partners.every partner is represented as a unique

peace of cloth. entering into new partnerships can bring the project new funds and new directions.

Affordable principle details how expert entrepreneurs focus on minimizing the downside of their
decisions and actions . mitigating the risk and facilitating the actions

effectual look for who they are? what they know

entereprenuer ask himself questions am I really ready to go in this new venture?

leverage contingencies- lemonade

it focuses on how expert entrepreneurs take advantage of the inevitable surprise that pop up in the
venture creation process and turn them into opportunities
unlike the causal thinker specifically focused on a specific ends the experts entere...levrages these happy
accidents and is comfortable reshaping the direction of the adventure to leverage these process into
opportunities

effectual entre... not only focused on predicting what is going to happen because that’s out of control

Expect surprises and welcome contingencies. It is in the unexpected consequences that opportunities
arise. With this mindset you leverage on the surprise situations, you seek for and cherish these
moments instead of avoiding or adapting to them.