The “Venturing” Experiment

Sarasvathy had 27 expert entrepreneurs (entrepreneurs with over 15 years of experience as such who
had founded multiple ventures including both successes and failures and had taken at least one
company public [ranging in market capitalization of $250M – $6.5B]) work through a 17-page problem
set of 10 typical questions encountered by entrepreneurs as they build a venture. They were asked to
think aloud for the entire test period. All of their responses were taped, transcribed, and analyzed by Dr.
Sarasvathy and a team of researchers. The responses were coded according to their causal and/or
effectual logic (each of the principles above were highlighted). Sarasvathy found that 65% of the
respondents used effectual logic 75% of the time when they were solving the problems. From this
empirical basis, she learned that 1) expert entrepreneurs do share a common logic in solving
entrepreneurial problems and 2) causal thinking is not bad, but required to form a venture. It was the
timing and amount of effectuation reasoning that separated expert entrepreneurs. Especially at the early
stages, expert entrepreneurs preferred to use effectual logic in creating new opportunities.
Where to from here?
In the late 1990s, when Saras Sarasvathy first described the decision-making approach that she had
documented among a sample of successful entrepreneurs, she could not have predicted how her work
would help shape the relatively young field of entrepreneurship research.
Since then, effectuation has become a respected field in the business academy and a compelling topic
of interest in MBAclassrooms. The tight core of scholars dedicated to exploring the phenomenon of
effectual reasoning—Sarasvathy, Nicholas Dew, Stuart Read, Robert Wiltbank, and Darden’s S.
Venkataraman, among them—has grown into a global community. Currently dozens of researchers
from all over the world are studying different elements of the entrepreneurial method, validating the
research, and applying effectual thinking from corporate intra-preneurship to creating the next
generation of social enterprises.
The global community of effectuation research is housed at Effectuation.org and by SEA – The Society
For Entrepreneurial Action.