Week 2 Flashcards
Trends
close observation of trends, societal, technological, economic, and governmental constitutes a source of potential entrepreneurial ideas
How new ventures begin
Work Experience
Hobby/Personal Interest
By Chance
Perceptual Changes
Education and expertise
More free time/space
More than half of all new ventures stem from work experience.
T / F
True
4 Step Process for Identifying Problems
Establish a need for the solution
Justify the need
Contextualize the problem
Write the problem statement
In the effectuation process, entrepreneurs begin with 3 means:
Who they are
What they know
Whom they know
Using these means, entrepreneurs begin to imagine possible ends
Causal reasoning
Selecting between given means to achieve a predetermined goal
Cooking example for causal and effectual reasoning
causal reasoning is picking a recipe, buying the ingredients and making it
effectual reasoning would be using what you have and know, and freestyling a meal
3 Principles of effectual reasoning
affordable loss, strategic partnerships, leveraging contingincies
- affordable loss
setting an upper and lower bound on what they’re willing to lose in order to start a new venture (may be 0)
the entrepreneur finds creative ways to implement their idea within the means they can assemble
- Strategic partnerships
focus on building partnerships rather than thinking about your potential partners as competition (like not telling professors or other students)
however, ideas are cheap, implementation is the most important factor
- leveraging contingencies
how contingencies are used determines the direction
not all surprises are bad, social interactions often determine the shape of the business venture
how do effectual / causal thinkers set up relationships with suppliers, competitors, etc. ?
Effectual: cocreational, building a market together with customers, suppliers, and prospective peers
Causal: competitive, transactional relationships with customers and suppliers
Would a causal or effectual thinker focus more on expected return instead of affordable loss (downside)?
A causal thinker would be focused on expected return, not affordable loss
How do effectual and causal thinkers approach surprises in business?
Causal thinkers avoid surprises
Effectual thinkers leverage surprises and use them as learning/innovation opportunities
From the “Are you solving the right problem” article, what were the 4 steps to approaching problems
Clarifying (the need)
Researching (past approaches)
Articulating (importance)
Creating (a description)
