EFFECTUATION

Living things are selected by their environment, People by their

philosophy.

Hayato Matsui
Omiiko Entrepreneurship Labo

Summary

There is a new theory of entrepreneurship called effectuation. More than 350 universities around the
world have adopted it as a textbook, and it is a hot topic in top management journals and conferences.
Effectuation lies in above all dialogues. We interact with the market, with knowledge, and with our
peers. It is a theory that emphasizes the process rather than the result.

Table of contents

1. What should we do today to prepare for a completely unforeseen tomorrow? 2

2. Planning is often misunderstood as determining the future, but there is no time like
the present to make decisions. 4

3. Remember who you are. 6

3.1. Deep Sea Radio 8

4. What words would you like to have inscribed on your tombstone? 9

4.1. Beyond Good and Evil 10

5. The Five Principles of Effectuation 16

5.1. Crazy Quilt Principle 17
5.1.1 A ancient Japanese poet 22
5.2. The Bird in the Hand Principle 25
5.3. The principle of sacrifice first, not profit 30
5.3.1. Affordable Loss 30
5.4. The Lemonade Principle 32
5.5. The principle that the pilot is in the plane 34

6. Finally 35
1. What should we do today to prepare for a
completely unforeseen tomorrow?

Don Quixote tells us that

if we believe only what we can believe,

love only those who love us,
and learn only what is valuable,

can we really call ourselves human beings?

There is a new theory of entrepreneurship called effectuation. It has been adopted as a

textbook by more than 350 universities around the world and is a hot topic in top
management journals and conferences. Some may be surprised to learn that it is a theory
that looks down on planning and instead actively incorporates unexpected events into the
business.

Effectuation is all about dialogue. It interacts with the market, with knowledge, and with
peers.

As an entrepreneurial researcher, when I talk to entrepreneurs, I find that many of them are
reluctant to raise the price of their products.

However, this theory avoids getting caught up in stereotypes and plans. If the price tag was
too low, you can raise the price without hesitation based on the dialogue. If you feel that the
business is not suitable for you, the theory tells you to pivot without any pressure.

When I talk about this, entrepreneurs are freed from their stereotypes and are willing to
rethink their pricing strategies. It's a very practical theory.

The creator of effectuation is Sarath Saraswathy, a female business scholar of Indian

descent. She was the last disciple of Nobel laureate Herbert Simon. Incidentally, the word
"Sarasvati" means "Benevolent".

Simon was a genius who specialized in decision making and was also a pioneer in AI. He
did research on limited rationality, but in his later years, he turned to philosophy. In his youth,
Simon's motto was "He who fights and runs away will live to fight again. These qualities had
a great influence on the effectuation of the Sarasvati.

Sarasvathy herself describes the difference between effectuation and existing theory.

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In conventional management theory, there is a core company, market, or economic sphere,
and the question is how to behave on top of these relics that already exist.

But in other words, it did not "create" such relics. We competed for the pie, but we did not try
to create it.

For example, we can't even consider the following.

How do you determine the price of a service when the company has not yet been
established?

How do you value a company that is in the early days of the Internet, in an industry that has
been around for less than five years, in an industry that is not even understood?

How did you value such a company five years ago?

How do you make capitalism take root in a land that was once communist? And more
importantly, how do we look forward to a post-capitalist world?

The number of people who have to deal with these issues is increasing at an accelerating
pace. All over the world, business is being liberated from its old relics and transformed into a
more creative and entrepreneurial marketplace.

------------------------------------------------------------------

In the movie "most likely to succeed," it is stated that only 50% of American college
graduates get jobs. The rest are forced to take jobs that don't require a college degree, such
as working part-time at McDonald's.

I run a tutoring school as well as an entrepreneurial institute. The reason why children who
do not go to school are pessimistic about their future is because they are not sure if they will
be able to survive.

However, even if they study hard and graduate from college, there is no guarantee that they
will be able to find a job.

Even if you get a job at a big company, it is still very uncertain whether you will be able to
stay employed until retirement, and it is still fresh in our minds that in 2019, a series of
Japanese business leaders expressed their negative views on lifetime employment. In the
last fifty years, Japanese have been employed in such a way.

Of course, entrepreneurship is no guarantee of certainty. So how can we take appropriate

action in these times of uncertainty?
2. Planning is often misunderstood as determining
the future, but there is no time like the present to
make decisions.
From "The New Realities". P.F. Drucker

Sarasvati divides certainty and uncertainty into three levels.

The first is the case of certainty.

The second is uncertain. The second is uncertain, which is uncertain but can be handled
statistically.
The third is also an uncertain case. Uncertainty that cannot be handled statistically.

The third type of uncertainty is called "Knight's uncertainty" in economics. This is also the
one that most entrepreneurs face. For example, about half of the Fortune 500 companies did
not even exist just 15 years ago. How can entrepreneurs make decisions when the goal
does not yet exist?

We try to do things that make sense. But sometimes we don't know what it means until we
do it.

Entrepreneurs who are in the middle of a Knight’s uncertainty usually find meaning in the
latter. In the face of such utter uncertainty and irrationality, what is left for us to do?

Actually, there is one very simple thing left to do.

Drucker posed a similar question.

"Suppose I lost everything”.

"You've lost your job, you've lost your friends, your wife has left you”.
"What would you be able to do?”

“What would you do?”

He replied, "I can still make friends”.

The only thing we can do in total darkness is to talk. If we do not talk and explore, there will
be nothing left but despair.

Incidentally, if you search for explanations of effectuation on the Internet, you will see the
pair concepts of "causation" and "effectuation". However, I have never seen an article that
clearly grasps these concepts.
In this book, I would like to translate causation as "cause-and-effect theory," which is the
conventional way of science in which cause comes first and effect follows.

In contrast, effectuation means “omen theory”. In this article, I will basically define omen
theory as "bringing about relationships between people”. Effectuation has the emphasis on
conversation and making connections happen.

In Zen, cause and effect theory is called "inga theory". In contrast, omen theory is called
"engi theory".

Sarasvati sums up the difference between the two as follows.

——————————————————————

The difference between causation and effectuation.　

In causation, the emphasis is on "certainty of results" (result-oriented)., and measures

should be taken to achieve the results. It is oriented toward the creation of "laws" that
reliably produce results. Conventional scientific linear ones.

Effectuation (omen theory) emphasizes "actionable means in place" and "what I can do"
(process-oriented). The results obtained are then interpreted and used as a means to
determine the next course of action. It is cyclical and keeps reviewing the results. Engage in
dialogue with people, markets, and knowledge. It aims to create a "philosophy" that enables
dialogue. Post-capitalist.

——————————————————————

The theory of causation is the one that creates laws to triumph over others, and the theory of
omen is the one that creates a philosophy to confronts others.

Entrepreneurship experts have experienced one or two bankruptcies, and complete

amateurs can make a lot of money by their business.

In other words, if you look at the results, you will miss the essence of entrepreneurship. This
shows that entrepreneurs live by a standard that goes beyond the axis of success or failure.
Entrepreneurs do not live in the paradigm of causality, and it is difficult to capture
entrepreneurship in the paradigm of causality.

If so, how can entrepreneurs formulate their own philosophy of dialogue?

3. Remember who you are.

Mr. Katsutoshi Fujita received a lecture directly from Drucker at the Drucker School in the
United States. The first words he heard from Drucker were, "Remember who you are".

There is one thing that Sarasvathy says is the most important for ejecting entrepreneurs.

It is…

"Who am I?”

The question, "Who am I?” is the most important thing to establish entrepreneurs.
It is exactly the same as Drucker's question.

"Who I am?"
"Whom I know?"
"What I know?"

These three questions are at the heart of effectuation, but they have been overshadowed in
the book “Effectuation”, and are rarely seen in commentaries on the Internet. However, it is
emphasized above all in each of her major papers.

A philosophy for facing others. Sarasvathy cites Don Quixote, the hero of the story, as a
concrete example of such a philosophy.

"Why did he behave in such a strange way?"

"It was because..."
"...because he knew himself.”

He operates by a standard that transcends success and failure. The same is true for
entrepreneurs. Such heroic standards of behavior come from the question, "Who am I?

Then, how do we get a clear answer to the question, "Who am I? There are people who
have answers to that question.

I would like to ask an outlandish question.

"Which comes first, the cause or the effect?

If you think about it scientifically, cause comes first.

Scientifically speaking, the cause comes first. Logic, strategy, and performance are the result
of the accumulation of causes.
However, if we think artistically, don't the results come first? The wonderful thing, or
revelation, comes first, and that is why the expression flows out.

The relationship between cause and effect seems to be self-evident, but it is not.

The effectuation papers are frighteningly clear. However, it is so diametrically opposed to

conventional science that talented researchers around the world have been unable to grasp
it.

If you search for effectuation on the Internet, you will find explanations.

"Transformation of the causation paradigm into an effectuation paradigm”.

"It's a behavioral theory that starts with the means that are already there, rather than the
more traditional, goal-oriented approach”.

This may sound like I understand, but it doesn't tell me anything. First of all, almost no one
understands that causation implies causal theory. They also miss a very important point: "In
effectuation, we start with the means because we focus on the process, not the ends." This
is clearly stated in the book.

I would like to unravel this effectuation from the words of Haruna, a young artist from Iwata,
Japan, who told me what an artist is.
3.1. Deep Sea Radio

Haruna's radio program, "Deep Sea Radio" on September 12, 2020, began with a quote
from a movie.

“There's a difference between knowing the path and walking the path."

This is a famous line from the 1999 blockbuster movie, "The Matrix.”

"What you learn in the classroom is useless in real life."

That's how I've always interpreted the above line, but she says otherwise.

She said, "For example, not that we try to paint a new picture or write a new song, but that
we ,the artist, must know the world, the picture and the song already exist, it is crucial”.

“You have to know that there is already a picture. You have to know that, and then the
picture will come to you”.

"It's not important to practice, or to do, or to try, but to know that it's already there. If you're
an artist..."

She always makes me groan.

These words reminded me of the story of Michelangelo and Unkei, an ancient Japanese
sculptor.

"Michelangelo is not sculpting marble. He is setting free the angels in the marble."

The work in progress is already done. It's the same as Haruna's story.

It was the same with Unkei. To dust Dainichi Nyorai, the God in the wood was to know Unkei
himself, to be himself.

Somewhere along the line, we have come to believe that we can program everything. That
is, all causes precede all effects. However, this was only the case in the causality paradigm.

In the order of cause and effect, effect may come first. In effectuation, contrary to causation,
we get the result first.

Fatal encounters, such as love at first sight or vocation, are not obtained with a cause. There
is no need to seek a cause. We do not need to seek a cause, because we already have the
result when we are born.

Remember who you are.

We need to remember who we are. Then we can start walking.

4. What words would you like to have inscribed on
your tombstone?
"How do you know your destiny?”
“Not because you have the knowledge, but because you know she is yourself”.

There is a saying that goes like this. This is not limited to lovers. There are indeed
encounters with the book of destiny, with teachers, peers, bosses, and even with the job of
destiny.

Howard Schultz of Starbucks was captivated by the atmosphere created by baristas while
traveling in Italy, and it changed his world for the rest of his life.

While marketing and strategy theories try to describe how he perceived the world,
effectuation is a question of how he perceived himself.

"Who am I?"

The more we perceive ourselves, says psychologist Arnold Mindel, the more fateful
encounters that seem coincidental will occur. The more you perceive yourself, the more
synchronicities and serendipitous connections you will make as you become more integrated
with your environment.

We all have friends we feel we are destined to have. Remember how you became friends
with them. I'm sure it wasn't a strategic choice.

"I'm sure you didn't choose them strategically, but before you knew them, they were there for
you as if they were yourself”.

That's how I feel.

A group of like-minded people is completely different from an organization gathered by

calculation.

Peter Thiel, author of Zero to One and a famous investor in the early stages of Facebook,
said, "If you have the people you want to work with and the work you want to do, even
people who could get a job at Google will come to a venture with two employees”.

Sarath Saraswathy, the creator of Effectuation, spoke about the illusion of entrepreneurship:
"Entrepreneurs don't come where there are business opportunities. It is where entrepreneurs
gather that business opportunities arise.
It is well known that the climate for entrepreneurs is very different from that of large,
strategically placed corporations. More and more people want to work with people they can
talk to openly. People have become more interested in exposing their true feelings and
having deep conversations, rather than subjugating others with authority.

The only way to be in such an environment is to know thyself. Effecution tells us that, but it
asks us for something more like philosophy than scientific knowledge.

"What words would you like to have inscribed on your tombstone?”

"What would you like to be remembered for?”

P.F.Drucker asked these questions.

He and Sarasvathy are similar in this respect.

Although Sarasvati herself does not mention it, her theory is clearly influenced by
Nietzsche's "Beyond Good and Evil”.

Let me give you an overview of "Beyond Good and Evil," which is the prototype of
effectuation.

The following is a super-translation from that book.

4.1. Beyond Good and Evil

1.

Truth is a woman.

The philosopher may not hold this proposition to be true.

But what if he just can't grasp the woman?

All great things rewrite the world into a play of adventure.

Then the truth is a woman.

2.

What is the will to seek the truth?

This is the very thing that drives people to fight.

The truth of money.
The truth of self-esteem.
The truth about women.

All conflict arose from the will to truth.

3.

What is the value of "the will to seek the truth" in the first place?

Why do we want to be right instead of wrong?

Why do we want to be secure, not uncertain?
Why do we want to be wise, not ignorant?

This question has never been asked since the beginning of time.
There is no greater risk in history than not to ask this question.

4.

Does everything have its origin in conflict?

Is right born of wrong, justice born of deceit, and morality born of selfishness? No, supreme
value is not. It has its origin in the thing itself.

Spiderman's value comes from Spiderman himself, not from Superman.

Harry Potter's value comes from Harry Potter himself, not from The Avengers.
The value of Doraemon came from Draemon himself, not from Pokemon.

I will use this book to baptize the truths of the past, whose only brain is comparison.

5.

The fundamental value of philosophers was to reverse value, where doubt was of the utmost
importance.

"Doubt everything".

As the Latin says.

“de omnibus dubitandum”.

Descartes used this technique in his writing “Discourse on the Method”. He searched only for
the certainty that remains after doubting everything. And the only thing left was doubt.

This is "I think, therefore I am”.

But can we say that doubting others is the only truth?
6.

"Truth has always meant only what is certain. All philosophers have ignored the power of
"perhaps...". This is where all the action comes from.

People are obsessed with certainty. It's an instinct, you could say. Even though we have
learned many things and have gradually moved in the direction of "Uncertainty of action is
indispensable for creation," we immediately seek certainty again.

Certainty has become more valuable than uncertainty, and truth has become more valuable
than illusion.

However, we are not the kind of beings who can be measured by such mere "certainties,"
are we?　

We cannot be measured with the same certainty as the length or weight of an object. We
have to be measured by something else that cannot be measured.

7.

There is such a thing as an impulse. There are impulses that cannot be avoided and that
must be acted upon. That is why we have to philosophize about impulses.

But what are these unavoidable impulses?

We can't just say, "I want to be this," or "I want to be that," and become that. Rather, it is
death that clearly and decisively shapes who we are.

"What would you like to be inscribed on your tombstone?

"What would you like your eulogy to say?"

When we grasp death, we act heroically. All people are not certain beings, but characters in
a play with impulses of their own.

8.

"What?
“What?　You.”
‘I want to live a more natural, untroubled life’.
“You say”.
“Really?”

Oh, how noble and stoic you are. You.

Imagine. No purpose, no thought, no justice, no pity. No one cares about you, you're just
there. You think that's an ideal?

It is true that human beings have aspired to a world like yours. But I'm saying it's a
deception. Are you going to go through all the trouble and hardship to be ignored?

But so far, philosophy, like a tyrant, has given people such desires. The will to the purest
power, the will to make the world, the law of cause and effect.

It is the law of cause and effect that has been desirable so far.

(Here's a translation of the law of cause and effect. Nietzsche uses the term causa prima,
which is very similar to the word causation in Sarasvati.)

9.

When one "thinks," one is thinking about universals, and therefore one is not thinking. We
can say that someone else, someone famous, is thinking about it, that absolute universal
truth.

Because it is an "absolute truth," we impose it on others. Conflict begins. Ego is born.

What a ridiculous thing. Today's science has been shaped by Stoicism since 1500 AD. It has
not only forced others, it has forced ourselves. "Truth has put us on a self-imposed leash.

I am free.
He must obey.

And when we don't agree, we get angry and start fighting.

The law of cause and effect always causes conflict.

And causality brands us.

"I'm at this level, but you're at that level?

I'm at this level, you're at that level.

In causality, we always look at others from this perspective.

Causality brands us.

In a straight line.

10.

What I offer is a very different "will to truth": an a priori judgment, as if we had divine
revelation, as if we knew it before we were born.
A revelation to make the world a better place.

It can be anything.

Make the world a better place through physical therapy.

Aromatherapy.
With beauty.
E-commerce.

In fact, if you don't get the sense that you have a mission from God, you won't sacrifice
yourself for others. You won't know how to be enough.

As Zimmel and Adam Smith said, economy is labor and labor is sacrifice. We have been
trying to make the economy run on desire, even though the economy can only run on
sacrifice. We must destroy the economy of desire, which has reached its limit, and create an
economy of sacrifice. To do this, we must sense our mission from God.

11.

How on earth can we receive revelation?

We must look at the truth in it. A new truth with a different logic than that of causality.

The truth within.

Not the universal truth, but the truth within me.

Not someone else's idea, but my own.

When we base our actions on our own internal standards, we are acting mythically. The
"non" free will that is supposed to be obtained with the help of death, illness, or handicap. An
ex-alcoholic rescues an alcoholic. A former shut-in saves a shut-in.

As A. Adler said, "The person with the problem is the one with the best qualities to solve it”.
It is a will commanded by heaven. It is mythical.

Who are you?

Know thyself.

Don Quixote acted mythically because he knew thyself.

12.

Such a Puritanical science, such a way of life of gaining revelation, springs from within
oneself. But it is hardly ever seen. It is rare, even for philosophers.
But this one finds meaning in something completely meaningless and worthless, and
motivates people intensely. Even if there are only a handful of motivations, they quickly turn
into a carriage full of motivations. Yes, just like the miracle of Christ's sharing of the five
loaves and two fishes that filled five thousand people to the brim.

13.

They are willing to sacrifice themselves. They are willing to sacrifice their bodies; they don't
care about the importance of their bodies as much as the earth doesn't move.

And that's not all. They easily throw away their security and don't care if they lose it.
Property, status, even God.

14.

If you fight with people because they can't accept your truth, isn't the truth just like some kind
of creature? Moreover, if you need someone to defend your truth, how pathetic is that
"truth"?

This is the end of cause and effect.

It is not true that what no one can accept is not true.

So.

Run to the fortress of self.

Hide from the crowd, from the controllers, from the universal threat.
Without escaping the objective, you will never be afraid of the eyes of others.

As the old Latin myth goes.

"The fool has arrived. The most beautiful and bravest of the all."
“Adventavit asinus, Pulcher et fortissimus”.

Be a defeated hero.
We need losers like you to create a new world where friendship is the main thing.
5. The Five Principles of Effectuation

There is a book called "The age of Surveillance Capitalism". The book is written by
Shoshana Zuboff of Harvard Business School and has received a lot of attention around the
world despite being a 704-page technical book [11].

The table below shows the top five companies in the world by market capitalization (as of
August 2021). Of these, four are companies that create the infrastructure of the Internet,
called platformers. As we all know, these companies collect information from users.

Rank Company Name Contry

1 Apple United states

2 Microsoft United states

3 Saudi Aramco Saudi Arabia

Saudi Arabian state-owned oil company

4 Alphabet United States

5 Amazon United States

Zubov's explanation of why we monitor is very interesting.

He says, "When you're competing for a piece of the market pie, the companies that have the
most power to monitor people make the most money. When competing for the pie, a
capitalist society must become surveillance capitalism.

It is true that corporations need to be ethical. However, because the stock market is based
on money, companies are forced to sacrifice ethics in favor of money after their IPO.

In other words, ethics cannot penetrate the global economy in a system where the stock
market is the core of the corporation.

There is a book written by Le Bon called "Psychology of Crowds". It is a famous book that
Hitler and Roosevelt are said to have read carefully.

His definition of a "crowd" is like this...

"A group of people in which conscious individuality has disappeared, and in which all
individual feelings and ideas are directed in the same direction”.

"People whose ways of thinking and feeling are so unified that they move in one direction
like a muddy stream”.

In the past, capitalist societies have deliberately tried to create crowds. The enthusiastic
supporters of certain companies, such as the "Apple devotees," are clearly a created crowd.

As one researcher put it.

"Le Bon says that crowds are suggestible and tend to believe things lightly”.

"The crowd regards 'implied opinions, ideas, and beliefs' as 'absolute truths' or 'absolute
fallacies’”.

The crowd is captivated by a single vision that has been created. They quickly turn on black
and white conclusions without observing anything, and move in one direction as if by
implication.

Effecution is the opposite of this. In the following, I will discuss the principles of this theory.

5.1. Crazy Quilt Principle

Effectuation consists of 5 principles.

1. Crazy Quilt Principle

2. The Bird in the Hand Principle
3. Affordable Loss Principle
4. The Lemonade Principle
5. Pilot is in the plane principle

One of them is the "Crazy Quilt Principle," which is taken very seriously. Crazy quilts are
quilts made from mishmash of scraps. It is a principle that Sarasvati felt so strongly about
that it is displayed on the cover of the original book.

(Crazy quilt)
The cover of the book shows Crazy quilt.
Below is a picture of Bric-à-brac.
Bric-à-brac is a style found in flea markets, and Nietzsche used this metaphor in “Beyond
Good and Evil”. It is very similar to the crazy quilts of Sarasvathy. Nietzsche says that in the
modern world of causality, we cannot accept things in such diverse forms.

The "one picture" thinking, linear thinking that I will discuss below, gets in the way. This
argument is also the same as Sarasvathy.

Crazy Quilt Principle

I will introduce the Crazy Quilt Principle first, which is the most important, and then the
related ones in a way that is easier to understand.

In the Crazy Quilt Principle, Saraswathy says, "It's as if companies have been trying to force
a single picture on us. But in the effectuation paradigm, each person expresses the picture
he or she has drawn. It's through conversation that the whole is connected."

"The inner world of the entrepreneur unfolds like a crazy quilt," she said. As the crowd
psychology says, we tend to see the world through one picture that is imposed on us without
our knowing it. We make instant judgments about important questions, we don't recognize
that we don't know what's in the ambiguous area, and we are moved in one direction like a
muddy stream without thinking.

Even in the case of the COVID-19 vaccine, there is a split between proponents and
opponents, but it is necessary to take a stand in the ambiguous area where we do not know
whether it is good or bad.

Conversely, if we were to stand either for or against the vaccine without observing, we would
have fallen into the crowd before we knew it.
We can see how easily people fall into the crowd. This is the trap of planning, where people
create order and constraints, and are unable to think of anything else. It may be righteous
indignation, but if it makes dialogue impossible, it is extremely dangerous in
entrepreneurship.

We give answers without making observations.

Because of this danger, effectuation is extremely hostile to planning.

Effecution is highly critical of planning, but of course it is not unplanned.

It tells us to be self-reflective about "who I am" and to look at the meaning of our own
existence rather than the future market. She asks us not to fall into the crowd, but to stop
and create a philosophy of acting on our own responsibility like P.F. Drucker.

Nietzsche, in "Wanderer und sein Schaetten," defines love this way:

"To love is not to want to be young and beautiful”.

“To love is not to want to have something young and beautiful,”
“not to try to make something excellent one's own,”
“not to try to bring it under one's influence”.

"To love is not to mean looking for or sniffing out those who are like us”.
"To love is not to seek out or sniff out those who are like us, nor is it to prefer and accept
those who prefer us”.

"To love is to rejoice in the condition of those who live in complete opposition to us”.
"To love is to rejoice in the state of those who feel in complete opposition to us”.

This is the world of crazy quilts.

With reference to Nietzsche's warning, I will now proceed with my discussion from the words
of Haruna, a young female artist in Japan, again.
5.1.1 A ancient Japanese poet

Around February 2018, Haruna talked on the radio about something unfamiliar called
Thomasson.

According to Japanese Wikipedia, Tomasson is defined as follows.



"Super-art Thomasson.


"A useless object that is beautifully preserved as if it were for display. Some of them used to
be useful, and some of them we don't know the intention of creating in the first place. There
is no artist who makes super-art Thomason super-art Thomason, only those who appreciate
it."

For example, the picture below is Tomasson.

Usually, people laugh at Tomassos on the Internet because they don't understand why they
exist. However, in "Deep Sea Radio," Haruna said...

"Tomasson is something nostalgic. It has a heart. It's like me”.

"Even though people make fun of it as meaningless, it's still there. The real me is there."

At her next gig, I asked her a question.

"What does that mean?"

She said, "I've found something that's not dying, that's still alive, that's not supposed to be.
That's the real me. It's like me. That's what makes me happy”.

The sadness she felt with the things that could not die, but were still alive, became a
connection. That is her happiness.

What is a song, poem, or novel? Prayers all have different feelings between poems and
documents. Poetry is something that can be conveyed without explanation, but it must be
expressed nonetheless.

What is being conveyed when we take the trouble to say what we know?

I talk with my best friend. I talk with my lover who understands everything.
There, the door to another world is opened. In other words, from a single photograph, we are
invited into the world of crazy quilts.

The dishes that my mother made for me.

A water bottle that a child brings on a field trip.
A picture book read to me by my kindergarten teacher.

Or the quiet beauty hidden in melancholy.

The mellow taste of defeat.

What we find there is not food or water or status, but the recognition of things themselves.

There is a poem by Saisei Murou called "Small Scenery Unusual".

---------------------------------------------------------------

　　　Saisei Murou's poem “A small sense, a different emotion”

A hometown is something to think of in the distance

and sadly sung.

If I am lost,

I would have become a beggar in another land.

There is no place to return to.

In the sundown of the city, I am alone.

I weep for my hometown.

A heart reminds me of a distant land.

If only I could go back to the distant city.

---------------------------------------------------------------

A small scene: A common scene that can be found anywhere.

A different emotion: I find something that strikes me.

---------------------------------------------------------------

My father's vegetable garden that I can see from my window, my mother's daily cooking, and
my lover's hair.
Drucker loved Japanese paintings. He loved Japanese painting because it brought him back
to his senses. He looked at Japanese art "to recover my sanity and perspective of the world"
. His wife, Doris said.

The moment when the mundane becomes brilliant. The moment when all the truths of the
universe fall into your hands. Even sorrow and despair shine there, bringing us back to our
senses.

A world of nostalgic similarity that unfolds within us. The core of the principle of crazy quilting
is to look for “a small scene, a different emotion”.

5.2. The Bird in the Hand Principle

"What should ‘you’ do?" is not important.

The question is, "What can ‘I’ do and what will ‘I’ do?" That's the question.

Not "What you ought to do."

But "What I can do and do it".

That's what the Sarasvati says about the principle, The Bird in the Hand.

The principle of doing what you can do, not what you have to do, is the "principle of the bird
in the hand”. Even if you are a high school student, if you can't do division, you can start with
division. If you can only use a hoe, start doing what you want to do with a hoe, regardless of
what the world is saying about AI and Metaverse.
What is it that we can do ourselves, not others? It's not about making a plan, but about how
to start a business using the means at hand. It's not about the results, it's about your actions
and the process.

In fact, the Crazy Quilt Principle and the Bird in the Hand Principle are interrelated.

Marshall McLuhan, a media scholar and an influence on Drucker, was fond of using the term
"mosaic approach," which is similar to the Crazy Quilt Principle. Newspapers are a case in
point.

Yutaka Nakazawa, who received direct instruction from McLuhan's eldest son, Eric
McLuhan, at the University of Toronto, says in his book “McLuhan Plays”.

In his book, Yutaka Nakazawa writes, "Newspapers, which were originally just a set of
findings from front to back, became the mosaic that they are today as the amount of
information increased. Readers read from where they want to, and newspapers try to
respond to their preferences”.

McLuhan described this kind of participation mechanism as "people are not reading
newspapers, they are getting into them like they are getting into a warm bath”.

It is characteristic of the "mosaic approach" that the question is not about logic or timelines
(plans), but about analogies and contemporaneous "what to do now”. This is not only a
principle of crazy quilts, but also a straightforward explanation of efficacy theory as a whole.

Yutaka Nakazawa states that the mosaic approach is the same as the "bricolage" described
by Lévi-Strauss in "The Savage Mind”.

Let me quote the definition from a dictionary, Merriam webmaster.

---------------------------------------------------
Definition of bricolage

:construction (as of a sculpture or a structure of ideas) achieved by using whatever comes to

hand
also : something constructed in this way

According to French social anthropologist Claude Lévi-Strauss, the artist "shapes the
beautiful and useful out of the dump heap of human life." Lévi-Strauss compared this artistic
process to the work of a handyman who solves technical or mechanical problems with
whatever materials are available.

(Merriam webmaster)
---------------------------------------------------
Nakazawa says...
"While planned work can be overwhelmed by unexpected events, bricolage is a process of
trial and error under the conditions given at the time and place, intuitively creating an overall
image”.

"Bricolage is a flexible way of thinking, in which the artist sees immediate events as symbols
rather than concepts, and connects relationships between events analogically to similar
relationships in other domains, giving meaning and structure to the world”.

"Both mosaic and bricolage are rich encounters between reason and sensibility that have
been lost in the rational orientation of Western modernity”.

The principle of the bird in the hand, as in bricolage, indicates that the entrepreneur builds
his business through dialogue with what is in front of him, with his own possessions and
knowledge, and with his peers.

Sarasvathy, who may be arguing with marketers when he says this.

"Entrepreneurs don't believe in marketing at all”.

This is a very strong statement. This is because in Knight's uncertainty, planning and
speculation don't work, but she bases this on actual qualitative research, not just theory.

"When a market exists, Kotler's marketing is effective, but when a market must be created, it
is ineffective," says Saraswathy.

It's just too far from the norm, and it's extremely difficult to understand. Here again, I would
like to borrow Drucker's insight.

In his book, "The new realities," he says, "To be efficient is to be efficient”.

“Efficiency is doing things right; effectiveness is doing the right things”.

Efficiency means doing the job exactly as planned. To be effective is to do the right thing for
the world.

Terms of Sarasvati causation effectuation

Drucker's term Manual worker Knowledge Worker

Buddhist terms cause and effect omen

Physics terms Linear Complexity

McLuhan's terms Visual Auditory

(above dichotomy words means almost same)

In other words, work in caustics means, in Drucker's terms, manual workers. In this
paradigm, we work in a causal, linear fashion.

And work in effectuation, in Drucker's terms, means knowledge workers. In this paradigm,
we work in an epiphenomenal, relational way.

In the knowledge society, the relationships have become so diverse that it is extremely
difficult to predict and plan. The complexity of the system makes it difficult to apply causality.

In the knowledge society, knowledge has become completely obsolete. The time when
knowledge was useful was when manual workers were the main players. As I will explain
later, in the knowledge society, people achieve more by sincerely facing themselves and
talking with others than by knowledge. Drucker uses the word “integrity” to explain sincerely.

What is important in each paradigm?

causation effectuation

having known try to know

results process

monney relationship

command dialogue

smartness and foxiness sincerity

Seek theories for success Seek philosophy for action

In the book "Effective Executive" (English title: "Effective Executive"), Drucker describes in
detail the "effect" that is connected to effectuation.

Drucker uses the word effective there in the sense of being able to strengthen a circle of
people and to talk to people well. In order to be effective, it is important to have the
"sincerity" to make connections.

In the age of manual workers, it was important to know.

In the age of knowledge work, it is important to try to know.
Drucker called himself a social ecologist. The psychologist A. Mindel said, "Reality is the
only perfect teacher," and Drucker studied under the perfect teacher and tried to know the
real world. What he knew was not important to him. He was focused on the process, not the
result.

Focusing on the process is also about enjoying things. For example, the same can be said
for studying. Learning itself is supposed to be fun. But why isn't it recognized as such?

"I wonder if the reason why study and knowledge are no longer enjoyable for those who
learn them is because learning has become a means to get ahead and achieve success
through exams, higher education, grades, and employment, rather than an end in
themselves”.

So says Osamu Tada, professor of sociology at Hitotsubashi University, in "Drucker x

Sociology". In order to enjoy learning instead of being tormented by evaluation, we need to
focus on the process, not the result. What is important is to develop ourselves here and now,
not in the future.

5.3. The principle of sacrifice first, not profit

"It's not how much profit you can make, but how much you can sacrifice of your own money
and strength”.

This is the principle of sacrifice first, not profit.

Sacrifice, not profit, is the key to starting something. There is no way to calculate profit when
there is none, and people who cannot make sacrifices will never be recognized by others.

In business model competition and when applying for loans at banks, entrepreneurs are told
to estimate how much profit they will make. But the truth is that there is no way to predict the
profitability of a business that has not even started yet.

They are always forced to submit very lax estimates. Instead, effectuation tells you to
estimate the deposits, assets, time and effort you can sacrifice. This is much more realistic
and useful.

This principle also shows the characteristics of effectuation, which emphasizes execution
rather than planning.
In the original book, the term "affordable loss" is used to describe this principle. However,
investment and affordability loss are different. Investing is about future profits, while an
affordable loss is an estimate of what you are almost completely prepared to throw away.

When people know exactly what they are going to throw away, they are more likely to
execute their unknown business. The seasoned entrepreneurs that Sarasvathy studied
understood this subconsciously.

Incidentally, the entrepreneurial experts they surveyed were selected based on the following
strict criteria: "They must have started at least one business, been involved in that business
full-time for at least 10 years, and have taken at least one of their companies public.

5.3.1. Affordable Loss

People often talk about traits in terms of positive aspects, such as wanting to be something
or wanting something. However, it is also possible to talk about one's own characteristics in
terms of the negative aspects, such as "what can I sacrifice?” When we reflect on ourselves
from that perspective, we can improve our ability to do things.

This is the heart of the principle of sacrifice first, not profit.

Unlike the causation model, the effectuation model requires us to go beyond failure. It
requires a philosophy based on sacrifice.

Japanese Bushido, Christianity, the Germanic spirit. As with any philosophy, it creates a way
of acting that does not question the outcome. This means that you can be involved in the
process forever. The reason why games are so interesting is that they allow us to enjoy the
process rather than the result. In order to enjoy reality like a game, we need a controller
whose name is “philosophy”.

Furthermore...

"What kind of successful person do you want to be?”

but rather

"What kind of failure is my own way?”

People with ADHD have been found to be good athletes and entrepreneurs, and the
researchers say when they revive from a completely awful loser situation. It is when they are
able to control their failures in their own ways.
The most important aspect of the "who am I" ephemeris is also the discovery of one's own
unique character. It is useless to try to learn only how to succeed. It is “what is your unique
way of failing?” that is important. If you don't discover that, you will not be able to move
beyond failure.

Drucker said, "To keep an organization innovative, you need a system that keeps discarding
what you think is necessary”. The god of destruction, who appears in various myths of the
world, is also the god of purification, reforming the old world into the new.

How can we fail and how can we destroy ourselves? Conversation is a process of creatively
destroying oneself, although one cannot have a conversation unless one knows that one is
wrong to some extent. How do you create your own character as a destroyer? What kind of
disruptors do we make of our characters, how do we make them interesting, and how do we
create deep connections with such characters?

In "Interviewing, Writing, Thrusting," Fumitake Koga talks about character.

"The key to immersion lies not in the existence of a story, but rather in the imposition of
character. If there are no characters to project ourselves onto, we cannot become
emotionally involved”.

It is said that a good story is one in which the characters move on their own. It's important to
create a story, but you also need to create characters that are more microscopic than the
story. You need to develop yourself into an entrepreneur that others can become so
immersed in that you can weave a bond with them.

And the key to character building is not in success or acquisition, but in destruction.

Drucker tells us that even when we have lost everything, we can start over as long as we
gather our friends. Failure is not the end. It was a messenger of purification that captures
one's character and controls the cycle of life.

5.4. The Lemonade Principle

In the causal paradigm, it is common to try to avoid the unexpected and to achieve
predetermined goals.

"Take advantage of unexpected successes."

Drucker's words shine paradoxically in our age of causalism.

Effectuation, like unexpected success, tells us to take advantage of, in the words of the
Sarasvati, "unforeseen accidents”.
"If you get a badly shaped lemon, make lemonade and sell it”.

This is the principle of lemonade.

Spencer Silver, who had been creating strong adhesives at 3M, ended up making a glue that
could be peeled off with little adhesion while making prototypes.

For years, Silver talked with people in every department about how to use the glue.

"He became known as Mr. Persistent because he never gave up and walked around the
company.

The developer of the fast-peeling glue was a persistent man.

Scientist Art Fry was a member of the choir and was always frustrated when the bookmarks
he was tucking into his hymnals would fall off. Then he remembered the glue that Silver had
developed five years ago.

After that, the two of them came up with the idea and proceeded to develop the glue, and
when they tried it out in the company, it was very popular. From then on, it spread to the
market like a virus.

The Lemonade Principle transforms uncertainty into a "path" or a "valuable process" rather
than a "wall of stoppage”.

Takuya Murakami, the head of a butcher store that has been operating for more than 100
years in Iwata City, Japan, rebuilt the family business that was on the verge of bankruptcy. In
addition to refining the sale of meat, he is also experimenting with drones, music, games,
and various other measures to generate revenue.

Mr. Murakami said, “Don't know what's enough, enjoy what's not enough”.
(Mr. Murakami on the right, the author on the left, and my friend in the middle)

There is a kind of person who is forever making plans to achieve perfection, but the
entrepreneurs Sarasvathy studied said,

"Ready, fire!”
"Then set your sights."
"That's what I'm saying”.

"I'm saying that. - Shoot first, then set your sights”.

"Most people say, 'Plan, plan, plan,' but that doesn't give you anything good”.

What effectuation is about is dialogue. It is a dialogue with people, knowledge, and markets.
It is not about perfection, but about how to have a good dialogue. Just as a good farmer
focuses on cultivating the field, not on the fruit, so does an effectuation focus on the process,
not on the result.
5.5. The principle that the pilot is in the plane

It is not necessary to have the latest spacecraft to travel to the moon. It is the principle that it
is up to the pilot to make a successful trip to the moon.

The computer on the first Apollo mission to the moon was no more powerful than the Family
Computer, a home video game console released in 1983. It's not that we can't go to the
moon without the support of the latest technology, IT, AI, trends in economics and
management theory, and many others, but that's “What kind of intentions do entrepreneurs
have in their activities?”. it is important. That makes the difference between success and
failure.

Takaku Bookstore in Kakegawa City, Japan, started an independent bookstore while online
bookstores are thriving. A friend of mine, Mitsuyuki Okamura, made a living by jumping into
strange houses to sell bodywork. Okamura's apprentice, a student of pharmacy at the
University of Shizuoka, earns 2000 dollars a month by polishing shoes in front of Shizuoka
Station. Another disciple, a female student at Shizuoka University, earns all her tuition and
living expenses by selling bananas in her food stand.

As is often said in entrepreneurship seminars, it is not important to have a good product or

precedent or to have a market. The important thing is to be willing to talk to the market.

In causation, it was important to improve the accuracy of predictions and control the future.

In effectuation, the focus is on working with the present to create the future. "The best way to
foresee the future is to create it”. This is reminiscent of Drucker's statement.

It is not the eye of God that sees everything. It is the eyes of a man who looks down at his
feet. It is not the hand of God that changes the world in an instant, but the hand of man that
plows the field one hoe at a time. It is the principle of "the pilot is in the plane" that puts us in
the position of people, not of God.

6. Finally

At the end.

"Who I am?"
"Who I know?"
"What I know?"

I want to see what these three questions of effectuation mean in the end.
"Who am I?"
...Whoever knows myself will be a hero. Like Don Quixote, a beloved hero.

"Who do you know?"

. ..I know someone with whom I share a destiny.

"What do you know?"

...You know your destiny.

It's very different from knowing your title or having knowledge of your qualifications. What
effecution preaches is the opposite of what we've learned.

Instead of focusing on status, we look at ourselves and ask, "What are we willing to
sacrifice?” Just as a diligent farmer focuses on cultivating the field rather than the fruit, an
effectuation focuses on the process.

E. Fromm warns against those who seek only material wealth.

"Do you seek the flesh or the person?"

"True pleasure can only be obtained by seeking ourselves, but fools scavenge for the
opposite sex as they scavenge for luxury goods”.

The Buddha's first sermon after his enlightenment is known as the First Turning of the Wheel
Sutra. This is the first of the Eightfold Path to enlightenment.

"The path to enlightenment shines in the sunlight of the right view”.

The word "Buddha" is a Sanskrit word meaning "to recognize”. The meditation that the
Buddha did when he was enlightened was also observational meditation, Vipassana
meditation.

I believe that civilization has created crowds instead of cognition.

In this sense, effectuation has the potential to be the destroyer of civilization. Or, it may be in
line with the Buddha's way of starting humanity anew and bringing people back to sanity.
Sarasvathy is an up-and-coming scholar from India, deeply influenced by Buddhism and
named after the god of learning. I will continue to listen to her words that will bring humanity,
which has been hoping for eternity, back to the beginning.