What is Effectuation?
Effectuation is a form of entrepreneurial reasoning introduced by Dr. Saras Sarasvathy in 2001. To me, it is also a set of useful tools for entrepreneurs. Effectuation is based on the idea that entrepreneurial action begins with the available means the entrepreneur has, and that those means are the key input for gradually setting objectives, especially under conditions of uncertainty. It is the inverse of the causal reasoning, the standard approach in entrepreneurship, where the entrepreneur begins with a goal and then searches for means to reach this goal.
If you are an entrepreneur, Why is Effectuation important for you?
Because it gives you a completely different approach in three fundamental steps of the process: resources use, goal setting and decision making – three key features when building your venture, developing your strategy or planning your market approach.
How do I use Effectuation?
A significant amount of entrepreneurs imagine future scenarios (typically idealised) based on a large number of assumptions. That happens as a natural response to uncertainty. Because of this reason, the best way to use the effectual approach is in combination with tools that also recognise the uncertainty of venturing in unknown markets, particularly Lean Startup.
I have developed a training program on Effectuation using case studies, exercises and technical notes. It is targeted to potential entrepreneurs, founders and startup enthusiasts.
I also offer consultancy services. I can help you to get the best from your effort through an effectual approach when you are developing your business model, planning your strategy or writing a business plan.