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    42 views9 pages

    What Makes Entrepreneurs Entrepreneurial

    Uploaded by

    Inga Morgan
    article

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 9
    What makes entrepreneurs entrepreneurial? {© 2001 Saras D. Sarasvathy University of Washington School of Business, Box 353200, Seattle WA 98195 VM: 206) 221-5369 FAX: (206) 685.9392 Email: saras@u washinglonedu Revised June 1, 2001 For submission to: Harvard Business Review ‘What mates entrepreneurs entrepreneur) Professionals who work closely with Hem aod resenchers oho sty them have often {pected about what makes enreprencurs apnea Of couse, eterenear so love told orton tis topic. But while tare areata war mores a et hee ee fro earaprenuts and searchers, gathering {opotier coherent theory ef eteprencia apes has ius fir eladed seems and prasioners aie. What ce the characterises, habs, and behavios of te species enreprencu’ Ts ice 2" earable and teachable "eore” t0 freptenership? In ether wards at ea {oan eneprenurs soe a8 Rob Glset and fell Beabe leas. fom old ilar sch 9 Josiah Wedgwood and Leonel Shoen? reser ‘iin de sae period ie hor, wat are the armen elements th! elepreneuy across Ive vary ndtoe share wt each aie? thinking that can be applied ares ee, ie tn iednalogy? Tn 1097, {su out on miherperous bo extagen to lovee question Traveling ates 17 sates in he US ovr sever ron Te vith 30 founders of ompanis aging in size fom $200 Mt to S658 ape Spanning 3 varity of Inusis for tee! and ralroad to tay Sears and semicon: and owech. The ida Behind fhe sty ns ot trey to ineview few Eonar ft to get ‘behind their orks nd wert ow ty reason about ese problems in tansfoming {oa naan endanngfem.The etopreeis. ‘woke ther way though a page problem ‘ver v9 Rous ‘alking sou continously 95 {hey cock saved easly the same ten coon probes to bud a company stating wk vactly the stme procuct idea. Rigorous Salyer of he tonseribe! taps od Yo rather Surprising bet eminently teachable principles ‘his et of peasiles, when pat together, et cn a eaberent lope tateley eablisied the tiene of iting orn orn that fave all Tong recognized iwiively a euoprancuia!. For easoes at Will Sere (©2001 Ser Sw, re Warae cleat te en section, Have termed is pe of inaiy “etal eso” Efectua eesoning: The problem The word “effectual” is the inverse of “aus. "Th general io Bsa programs sre the world, students tre taught chisel or edicive teasoning ~ in evry fuetonl are Urbane "Cael atonal begins wih fecdetsined gor and given eet of meine, ed secks to identify the optimal ~ fsest Shapes, mas efficent te alrntive 10 Ichieve the given goal. The makews:buy ein in prosction, or choosing the target, Imaiet withthe highest potetial return Iatketingo picking poral wi the lowest skin inane, eve i the bes pro for the jab in human sources ramagemen ae ll ‘amples of pcb of easel rseoing Ino inresing vv of eaualrcsoring Invlve terest eto arate tehieve the given gol This fn of eee Causal ousbuog fe often used in atte inking Etfestn! reasoning, however, docs not begin wih pei gol sted tegie with a givens of eats snd allows goal eg ontingenty over tine Wom the vad Imagination and averse epietions of the founders andthe people they interact ich White cual hikers ar Wie gest general seeking to ong fel ahs (Genghis Kha “onguering two thige of te Inown word), ‘fetal hikers are ke explorer ting 9st ‘on voyages info uncharted waters (Colous acorn the new wal), eis poet 1 point ou thou that he sume person can we beth causal and effecual eaoning at diferent times depending on wha: ths cumstances ell, Toe Inthe bet enteprencu ate ape of beth and do use both modes well. Bu they Heer effectual veasaing ovr ens reson Inthe ceriysinges of a new Yesare, and ‘pushy, mest entrees do ot wanstien Wella Tater sages reuiieg more cast reasoning. Figure | graplely depicts the Stren foms of esate dsstssed above BRERA eeeyeentne While causal reasoning. may oF rey mot involhe erative Uking, effec reason ng i Inherent erative, ‘The sinpl ak of cooking inner may be used o corr the wo Opes of reavning” A chef who fs given specie ren nd enon to pick oot hit or ber favorite fever forthe Wars on the mec, bop for [Marden and coo the sn tio el cquipaed Kitshens san example of eral renoning. Av example of elect! ressonng Suid involves eke who ao given a mena vane, and fs eeored fo 9 stange Kishen ‘shone arabe har exlvehe cupboard or © 21S Sr, res abagor unspeciied ingredients and cook a eat with them. Whe beh cst and fecal sori fall for domain specie stall and rains, ‘fein enaning comands something re Imogisaion, spontaneity, railing, a0 salesmanship rete reasoning: The process categories of meat: (1) Who hay are — thelr Wal ats and wiles) (2) What bey know — their eduction, taining, expertise, and experince and (3) Wher hey ow = heir Social and profesional neeorke. Using here ‘mens, te eteprerers Bop 19 ssi ss Implement pssbie effets tat canbe cates wit ther.” Moston, dey sr very sal ‘with The means that are eleven at an, ad move. alos. dveciy into action without ‘labora planing. Unike causal reasoning tht comes 0 life through careful planting nd Satsegiet execution, ele mong vex fa Weathes execution Plane ae rade and Unmads end revised and reset through sion and itrtion wth ter on ly asa, Yet ening pie hat Kespe de tu gsi, 4 compelling sory that brings In ore Sokoboldr and’ continuing oumey ta maps ‘out ureatd tert. Through he clio, The effects estepreneus” se of ean an ‘consequent the et of possible eet eatae 5d go reconfigured. Evel, cera of te ‘merging efleteelesce na cleay achievable nd desl pols ~ Inds ht poet to flscarsble path Bogioning to emerge fhe ‘ilies "Yet in ur clsscos, we teach pte tnirepreneurs an extremely nisl process =the Scquenial eoureson from sen to matket esearch, to inna projections, ro tan, to bosiness pm, to fnanving. 1 pro‘espe 12 sae 10 ea, with the eves, of eau, st epic il happen hg the wy. Bessecd ‘eprensiss, bower, kno Chat sues are fot eevinvions fom th pach, Tes they sre fe nom, the floes ane fs of the andes, {from whieh one lars feng spall cua ‘he jangle The unespectes is the su oF “cuore experience an enstormng te unpredictable int the ser: maar isthe ‘spac connie ofthe exper eae Lat ue consider how the to. prosetses operate in the siple case of bulding ‘esautam gine an encour wo wants fo rt an nian restaurant In the ews proces that we tach, she woul an with ome kt ec nt rear ty fo fmefuly based upon the market reseateh, ecment the mare in 9 meaning wey act ‘arg smeris ted om estimates of potent ret: desig a cesturan loapea 6 sg Sears ase the ceguied funding, bg he team together, and falls, implement specie fue saree an manage diy epson © take er resus ccs, Inthe etiectal proces, it wou all depen co who our envepener what she Ls an ‘whan she know Forte sie of unending {he proces er, le ssa sh Is god dian he wo is coniering sting independent Usoess”Assurg she has vey Te meney of bee oon, what ae ome ofthe wave ate can 200 Sr Sarna Une og, ying er ea to mare? When usd sa class fetereie, sides cil suggest corset of Sci such a partnering th an existing restaurant, participating in ethnic fod fas Sy tht te tua eourse of acon she deides te pursue iso persuade fends who Work ovina to alow het being lunch fr thee ‘tice cllenpue 0 smples tar hero that some customers then ign op fr 3 htc service and she begins preparing the food et Home. and delivering Tunehes personally Everly ke coud sve up enough mone 6 rea loctionang sort restr, ‘But it cold equally be plausible that the lunch business dent take beyond the st few eantomers, but instead ur enerenes? Aitcovers that the cosomars are acaaly Inerstag in her ete pilosophy and fe ‘xpurinses or Inn exe or eer pects oF het personality ov expertise contacts or Interns She eu hen did oo oan) ‘ne of several fren busines eontinge ‘pon th ensuing feedback. To eke bat 2 fee poreities, her eens steal energie {ould try out Io bei any one © If 0 he folowing ndusties~ euciton, emeratnen, ‘rove, maruficurag and packasing, rea, Interior decoration, of ven selRelp and Figure 2 grahlaly depies and const the gaol marketing process with tbe effects. fe) Rea life examples of effectual processes In emoprenouiipsbouns In ar th ret ‘ofeffestinion fermese and str the Hers ‘t etrepreeuthipsinse lea a fa Bok the eighteenth century: In the eghteenth century, a poder named Josh, Wedgwon tealized tht pts can cay people's asprin for social bility, in te twentieth, King Gillet began toyina withthe ide of eesting something tht customers would Want 16 "isco seh he nvened cal iret tetep andere es lo pg ‘Sisal argc fa oad epure be balan It of mr coprcual os ‘eet mare hata ety ein ‘ered ceca no oh ton eat Fare proces cap av hares gr repeaelly repurchase and wile shoving one ‘more, hil upon dipole razors a 3 possibilty: Tom Faljo, respectable Proftssorl is Houston, praceally go dared fet fourding the gabage gant BF ding 2 faturban sublvision mesting to solve the ‘Community's garbage disposi! prolens: and Soe othe teent:ft ent, we ying to Progiessive contr, ak ex Merson executive Famed Rod Glass fel i love wth Moss and Set oat give vie tothe mute Web nthe Frm ceReaNcieey woo tgoes Erte reasoning: The principles Does ll tis mean, fouptal we ee once ain resoting to les by the campfire? Tus ‘ut at ll these sores have sane como Principles of reasoning that invert thee founterpants in cuss resoring.Mersove, these preipls i tgster no cheer logic that demonstrates that thie ie indeed ‘comvoeng alernive to causal aoa 2 hie sual resoning focuses on eypeted rete, effect resconing omphasizet fre los While easal reasoning depends upon ompettive analyse, effectual reasoning is but pon sei paisa: nd, + While causal tensoning “urges the explain of pre-existing knowledge and predistion effets! reeoning ress te Ieeraging of contngeeis ‘Thepiedable lassie ‘Whe managers ae tnght to any dhe marker and choose target seginents Wh the highest ptenial return enspreeas tnd 1 Tig waa to reach the market wih nia cexpencture of resources such a Tine, elf nd money, Inthe exten css te afore Tous piel reenter nto the zero ssures to market penciple. Several of the expe frqenours | studded tha hey weld fot do any radon market research, but ‘woul ake te product e the nearer pele ota esomer even before fas bul Te fice b one ha, hk Pte jus. ing insead of sng all he questions Pago id siye ty and ait some tle, Te mike Soma. Just udgments snout where {Wes Bo 220 Seat Sir, neo aoe get me and my bulls 0 | woul go aut Sand sr selling. 1 lesa ot you Snow ‘which people. what were te cstees. What swore te qustione, which prices ork Beer {ud jst DO Tun yt ake to! an ell Even before I ave te chine. Pd jst got to elt Even before (sae proistion So ‘my mater esearch wou astaly be ands on Sut seling, ard work, bt fhiak mush een ying does esr Ta nding the fie customer within thee immediate veins, whether within their seoyphicvsiy, ila ther sais neta, Sr within thir ave of profesional expose, nueprencies not te therclves £0 3h) ‘Seated os peeanceived “make” or tegic Universe for thelr les, nea, they open ‘hemseles fo surprises as to walsh mate or ‘aets they wil evenly end up Building ‘het Busine in or even eich nee maets ‘hey will end up erntng Stating with ea the same padi the enreprensirsi the td ended up creating companies in 18 comple para nt “Ache ey principe offer ressoing Ise foes on buldng partnerships rather tan fon doing 2 systematic competitive alysis Sice entrepreneurs tend co start the process Without assuming the existence of 8 pre Gsiomines asker for Ther ten, detaied ormpttive maises donot sm fo aks a8) Serta ham a he stip ase Asone othe Subjects explained, "At one tine. in out npn, erdered people not wo think sbout emer, Jur do yur fob, Think ony Of Sour wark"® Instead enrepreneate feos on building ponstships eight om the stare Te fh he Hel beponing fora suc sap Seemed 19 be the indaton of estore a Seale pasaeships Agsn, then om the bien eh sy, Hscompany ns Bien Char ameany- Theses ows 89 $i eft esc arto Began wit een epacear tims eal modo home's mouth, “Tratonal marker research $38, you do very broad based formation sahclg, posi using matings would fb that Povould erly target, a8 1 ‘nally Key companies who 1 would call ‘gag do a Got lobtemy om te. The Chullenge then is ell wo pick your panes, nd package youself early before you have Te fa the stotee paresis rncple ovate very wel ih the affordable lose Principe to bring the enzaprnsus' Idea ‘arket stray ow levels 0& capital uta. Funhernor, sbuaitng pre-ommiments fam ey etkobolrs help edu uncer inte vy sages of stein ah esters. Final Since the envesrenewr i bat weed 0 a8) Dacula marke for thee fee the expanding nota parr eerie 2 Sxepey will eventual end up “Tae hed prio lect teasing is se heart of enteprnauial expaise — 182 Shy ton the unexpected int the posh AAs one ofthe rjects i the tay pat oT ivay ive by the oto of Readsireain. Tak if you spend too ach tne dog red binvainaimain, youre never goa lt {0d things tho wosle happen Hf you actually ‘Sac doing and hen a Ad Td out where your (Gres eeprensuril fens are pause of contingencies Their strate, calle, cor fempetens, ond endurince or ll residuals of patie, Fouts begs sive. fe Bagel Ful partculsrsspraons tough iterations ‘he space, ane and technologies they Live In or example se cod speeulte whether Wdguood poten wosld fave er pombe f the peter Josiah Wedgwood had aot rec dhe betleman pllosopher Thomas Bentley end Soed hi fate a prtership that reed 8 Grand and» grest company that hs led over {wo cents. The Key 10 the Wedgwood atte was the relation ht poope pt heir aoney where ther aspiations area at oss nd vaser could botome vetlel of socal ‘nobly Similarly i cw time, researchers eculte what Miefsom would hve Been If 20 sad Sanat Onno gor 1M had writen a diferent ype of contact or {€ Gary. Kila ta pot ben oat sng bis pine he dy TBM came caine Yes 0. the contigenciegthemssives that shaped the Eompanis inthe forgoing examples. Tes bo the ennepecnousfeverage! te contogecies {Hat eame vpn them tht hs fo te core oF moses of effectual reasoning. The ralizaton Iter good onan beet np os the new venue ereaton pesos difleeites estan reasoning om esl soning which fends wo focus onthe avoidance of suprises 3 ncaa eeasoalog: The bgle Usdesing al the peples of eects! teasonng ist coherent loge tha ress 07 8 fandenaly diferent assunptign tbo the fue than casa soning. Causal seasoning is based on the ope, To the exo tha we cat prot the fare ean corral Tha Shy both aculemies and. peclifones in Busnes today spend enormous antounis of Drsinpower and” resource on developing predictive modeln. Effet reasoning, Nowever, base on the li, Th exten hat ve can cone! th frre, we do ot ed prot How does one corto! an unpredictable fue Te aser to ths question depends 08 fur ble abou were th Rue comes om, Js the itr aply' anion the 25°? Yorwhat exent in bunan getion acutl hang i eours? While the future is sys ‘reeain ot all uncer are he samen Face the simplest way we cam model the

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