EFFECTUATION

For use in the PRINCIPLES OF ENTREPRENEURSHIP classes of

Mr. Reynaldo A. Mones, MBA, DBA (ABD)

® at the De La Salle University

 Effectuation

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 Theory of Effectuation

Dr. Saras Sarasvathy, a cognitive scientist

® https://innovationenglish.sites.ku.dk/model/sarasvathy-effectuation/
 Definition

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 What Effectuation Does?

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 What Effectuation Do?

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 Principles of Effectuation

• Start with your means rather than wait for the perfect opportunity. Start taking
action, based on what you have readily available.
•You have to create solutions with the resources available here and now.
More here: https://innovationenglish.sites.ku.dk/model/sarasvathy-effectuation/
and Effectuation and its application in youth entrepreneurship training

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 Method
Mindmapping

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 Method

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 Method

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 Principles of Effectuation

• Set affordable losses and evaluate opportunities based on whether the

downside is acceptable, rather than on the attractiveness of the predicted
upside.
• You should only invest as much as you are willing to lose.

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 Method
Business Model Canvas

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 Principles of Effectuation

• Mistakes and surprises are inevitable and can be used to look for new
opportunities.
• “When life gives you lemons, make lemonade.” We know that it means to make
the best of an unpleasant situation or event.

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 Method

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 Principles of Effectuation

• Form partnerships with people and organizations willing to make a real

commitment to jointly creating the future -- product, firm, market — with
you.
• Entering into new partnerships can bring the project new funds and new
directions.
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 Meet the Right People
Innovation comes from people
meeting up in the hallways or
calling each other at 10:30 at night
with a new idea, or because they
realized something that shoots
holes in how we’ve been thinking
about a problem.

Steve Jobs
In How to Think Like Steve Jobs by Daniel Smith

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 Method

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 Principles of Effectuation

• Takecontrol and remember that the future is in the making and not
predetermined.
• The future is not predicted but created through our actions.
• Those waiting for the perfect idea will have to be patient, while those taking action
will likely create something interesting and then need only figure out how to make a
® business of it.”—Stuart Read
 The Effectual Cycle
Effectual logic happens in the mind of an individual,
where it provides a way of thinking about making
decisions when non-predicative control is required.
The effectual cycle represents the thinking process in a
form used in creating products, markets, and ventures.
It’s not a prescriptive “do this, do that” algorithm, but
rather a set of heuristics or problem- solving
techniques that uniquely and universally apply to the
challenges that entrepreneurs are bound to face.

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 The Effectual Cycle

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 The Effectual Cycle

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 The Effectual Cycle

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