Effectuation: Lessons From Expert Entrepreneurs

Overview

Class Central Tips

Have you ever wondered what it would be like to be an entrepreneur? To start new ventures, build and grow them, be your own boss, create good jobs for other people, make money, and change the world for the better? Do you dream about becoming an entrepreneur but worry that it may be too difficult, require more resources than you have, or involve too much responsibility? Do you fear you don’t have what it takes, or that you might fail not just once, but over and over again? In this course, developed at the University of Virginia Darden School of Business and taught by Saras Sarasvathy (Paul M. Hammaker Professor in Business Administration), you will learn how effectual entrepreneurship helps overcome four obstacles people commonly face when they think about becoming an entrepreneur. We will not be going into the nitty gritty details of starting a new venture. Instead, we will explore the lived experiences of entrepreneurs around the world--people who have built for-profit, non-profit, and other kinds of ventures. You will learn from these expert entrepreneurs how to think and act effectually, co-create new possibilities from things already within your control, and tackle uncertainty without having to predict the future.

Syllabus

I Don't Have an Idea

Welcome! In this course, you will see and hear from entrepreneurs and entrepreneurship educators as you explore four obstacles people commonly face when they think about starting a venture. You will learn the lessons that expert entrepreneurs have gained through their experiences building successful ventures. This week, you’ll explore the first obstacle people often face—how to get an idea—and learn about the five principles of effectuation. Then you’ll begin to identify your own bird-in-hand and use that to come up with ventures you could build.

I Don't Have Resources

Early entrepreneurs often feel that they don’t have enough resources. This week you will learn not only about resources but the beginnings of productive relationships as you explore the next two principles of effectuation. Affordable Loss is about keeping the downside within your control so you are free to push the upside up. YOU get to choose whether and how much you are willing to lose. The Crazy Quilt principle is about bringing on self-selected stakeholders who will help increase your affordable loss and open up new upside possibilities.

I'm Afraid to Fail

The lessons this week will take a deep dive into understanding entrepreneurial success and failure. Then through the Lemonade and Pilot-in-the-Plane principles, you will learn how to effectually manage and even leverage failures and co-create success.

I Don't Know What to Do

In situations of uncertainty, the five principles of effectuation can be applied individually, all together, or mixed and matched in various ways. You can even combine them with causal approaches. By looking at the early histories of most enduring ventures, we can see the principles coming together into an iterative process: an effectual cycle. You’ll end the course with a strong understanding of what expert entrepreneurs do as they start ventures.