Effectuation in Entrepreneurship

A Revolutionary Approach to Navigating Uncertainty

When it comes to starting a business, many people envision a classic approach: set a clear goal, develop a detailed strategic plan, and mobilize the necessary resources to achieve it. However, in environments marked by uncertainty, this method can prove ineffective. This is where effectuation comes in — a groundbreaking approach designed by Saras Sarasvathy, a professor of entrepreneurship.

Effectuation is a way of thinking and acting that relies on available means and seizing unexpected opportunities, rather than rigid forecasting. This philosophy turns uncertainty into fertile ground for innovation and action. But how exactly does effectuation work? Here’s a breakdown of the key steps in this approach.

1. Start with Yourself: The Available Means

Instead of dreaming about ideal resources, effectuation starts with a personal inventory of immediately accessible means. This step is based on three fundamental questions:

• Who am I?: What are your values, passions, identity, and professional background?
• What do I know?: What skills, knowledge, or expertise do you possess?
• Who do I know?: Who are your networks and relationships?