Ep. 8 - Effectuation - Saras Sarasvathy

Who’s On The Show Today:

Today we speak with Dr. Saras Sarasvathy, a professor of MBA and doctoral students at UVA. As a leading scholar on the cognitive basis for high-performance engineering, Dr. Sarasvathy has co-authored a textbook called Effectual Entrepreneurship which won the Gold Medal at the 2012 Axiom Business Book Awards. 

 

What’s Discussed on Today’s Show:

●    What is effectual logic and how it’s pertinent to entrepreneurs

 

●    What defines an “expert entrepreneur”

 

●    The 5 different principles expert entrepreneurs use to make decisions and how they apply them when the future inevitably becomes uncertain in the startup world

1) The “Bird In Hand Principle”

2) Affordable Loss Principle

3) Crazy Quilt Principle

4) Lemonade Principle

5) Optimism Principle

 

●    The key differences between Causal logic and Effectual logic and how each changes the interpretation of the 5 principles of decision making

 

●    Different case studies in the startup world - such as AirBnb - where effectual logic principles have been used to create successful ventures

 

●    How effectual logic changes the “starting point” of a viable business, and how it can change what the ideal business model looks like

 

●    How anyone can learn to use effectual logic and build a semi-successful company

 

●    Why the whole of society should be taught to think effectually like an entrepreneur and how this could positively affect the economy

 

●    How to think about and define failure while using effectual logic and how this should influence your decisions as an entrepreneur

 

●    Why you should cook effectually and not causally, how this can lead to innovation in the kitchen, and how this all applies to entrepreneurship

 

●    How can investors tell if an entrepreneur who uses effectual logic will actually be a successful

 

What Was Mentioned on Today’s Show:

 

Intangibles: A podcast about traits, behaviors, and qualities that entrepreneurs can cultivate to be successful. Find us on the web at www.intangiblespodcast.com

 

Antecedent Ventures: An enterprise-focused, seed-stage venture firm in NYC. You can find us at www.antecendent.vc

 

Dentons Venture Technology Group: Operating as a boutique within the world’s largest law firm, the venture technology group runs with hard-charging tech entrepreneurs to drive growth through strategic business, finance, and legal advice from Silicon Valley to New York, to London, Berlin, Hong Kong, and beyond. Learn more at www.dentonsventurebeyond.com

 

Effectual Entrepreneurship: Saras’s award-winning textbook which aims to teach readers how to practice effectual entrepreneurship and logic while building a business. The text includes over 70 case studies examining entrepreneurs who have used these methods to found and grow their own companies.

 

Effectuation.org: A website where people can learn about effectual logic and how to implement it in their lives. The site contains access to research papers, events, and lessons pertaining to effectual logic, and is a portal for the community that surrounds its study

 

iKen: Organization in India that has developed a peer coaching program for effectuation

 

Hundred Open Startups: a corporate-startup engagement platform created and maintained by more than 70 global leading organizations that together evaluate and rank startups worldwide for business generation.