Effectuation: Entrepreneurship Without Being a Hero
Effectuation: The Principles of Entrepreneurship for Everyone, by Philippe Silberzahn, is probably the book I’ve recommended the most over the past five years. This book inspired me, relieved me of guilt, encouraged me, put into words the intuitions and faint signals I’d had only partially, and was, in short, a true revelation for me.
Effectuation, theorized by Saras Sarasvathy, involves deconstructing the myth of the superhero, who, after setting an extremely ambitious goal (colonizing Mars by 2050, creating a global social network…), uses backward planning to determine the actions needed to achieve it and courageously takes every possible and imaginable risk: dropping out of school, quitting a well-paying job, or even staking their personal fortune—what is technically called “putting one’s balls*on the line.” These ventures, provided they are successful, serve as examples and sources of inspiration for a horde of aspiring entrepreneurs who love a good story.
Of course, aside from the fact that they are a perfect illustration of the survivor bias, these narratives do not hesitate to rewrite history, leading us to believe that everything had been anticipated from the very beginning (end-justifies-the-means logic). The reality is quite different, since entrepreneurship as practiced by most people—by you, by me, by your baker, or by that person in your circle who is developing a side business alongside their full-time job—in short, all these “silent” entrepreneurs—often stems from a positively opportunistic mindset (the “means” logic).
Effectuation takes the exact opposite approach to the “causal” one, in which, once the desired effect is set, you act on the causes—that is, the means to be implemented to produce that effect. The effectual approach, on the other hand, suggests observing the causes at your disposal—that is, the resources you have—and determining what effects can be produced from them.
Saras Sarasvathy thus identifies five founding principles of this form of entrepreneurship, which is undoubtedly closer to reality:
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Start with what you have: what resources do you have at your disposal? Expertise? Time? Savings? A network? And before that, what values and convictions guide you? What can you do with them? This question lies at the heart of effectual logic.
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Act Within Acceptable Losses: You may not be ready to quit the full-time job that pays your bills right away. Start by building your business on the side while keeping your stable job; then, once you’ve gained enough positive feedback from the experience, you can take the plunge. Determine how much you’re willing to lose and adjust your goal accordingly.
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Secure commitments: Mobilize your network—both direct and indirect, including family, friends, customers, suppliers, and partners—around your entrepreneurial project. Once again, each stakeholder brings new resources and helps define a new goal.
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Take advantage of surprises: don’t hesitate to redefine your goal based on what you discover and the feedback you receive. Don’t try to protect yourself against every possible risk—that comes at a cost. Embrace surprises and turn them into opportunities: this is the famous “pivot” of startups.
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Create the context: don’t try to predict the future—create it through action. Prioritize action over analysis, because action is a source of learning, and action transforms the world. Don’t look at the world as it is, but as you would like it to be: your mental map will have an impact on the world.
This way of thinking runs counter to the image commonly associated with entrepreneurship. It is iconoclastic and radical, yet imbued with a simple pragmatism that helps us—you and me—take concrete action.