The Science of Entrepreneurship

Without action, there would be no results

– Peter Jones

Reading this line makes the entrepreneur in every human gear up their work and start googling for startups. From searching golden rules of business to setting up one, we tend to forget the science behind entrepreneurship. As Albert Einstein said, “the only thing more dangerous than ignorance is arrogance”. More business leaders have failed and derailed because of arrogance than any other character flaw. What makes a great entrepreneur isn’t genetic, social, or personality traits, money, risk-taking behavior, or unique vision. It is the logic or the science of deduction. In the words of technicality, it means Effectuation.

Effectuation is a logic of entrepreneurial expertise. Researches show that there is a science to entrepreneurship and that great entrepreneurs across the globe and time use common logic, or the thinking process, to solve human problems. Effectuation focuses on evolving to achieve unique goals. It brings creative and revolutionary tactics. It is an idea with a sense of purpose, to improve the future of the individuals by articulating dynamics of the unpredictable yet controllable human actions, constructing preferred and negotiable choices. Effectual thinkers believe that ” If I can control the future, I do not need to predict it.”

Dr. Saras Sarasvathy’s theory of Effectuation models decision-making approaches and actions, where the next best step is identified by available resources to achieve goals.

Effectuation consists of 5 core elements to develop a venture.

  1. Bird in hand – Start with your means. Don’t wait for an opportunity to come and work with the means resting in your hands.
  2. Affordable loss principle – Set the risk you can take. Instead of risking everything to an unpredictable future, measure the acceptable downside.
  3. Crazy quilt principle – Form Partnership. The crazy quilt symbolizes collaboration between partners. Uncertainties in the corporate world can be helped by turning to collaboration for solutions. Thus, creating a diverse network.
  4. Lemonade principle – when life gives you a lemon, make lemonade. Leverage contingencies and embrace surprises that arise from unpredictable situations.
  5. Pilot in the plane – Control the controllable. Rather than being the passenger and going with the flow, take the charge of your plane and co-create the future.

Nothing will change unless you don’t act upon it. Applying common sense has become a 21st-century thing. As the world runs faster, it is us who will decide which direction should we fly to.

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