| Hi shaper✌️,
Welcome back to another edition of INFUZED on company-building and innovation.
Recently, I came across a framework for entrepreneurship that finally aligns with how I think about company-building. It’s called
Effectuation
Effectuation is a logic that can (and maybe should) be applied by anyone who is trying to build a business or innovating a new product.
In one sentence: you look at what effect you can make with the means currently available to you.
The framework comes with 6 principles that maximise the likelihood of success for a new business.
1. Bird in Hand - Start with your means
Who I am, what do I know, and whom do I know? What could you do with that?
2. Affordable Loss - Focus on the downside risk
Go one step at a time. Limit risk by only betting what you can afford to lose.
3. Lemonade - Leverage Contingencies
Failed attempts are valuable, if you leverage them. „When life gives you lemons, make lemonade.“
4. Patchwork Quilt - Form Partnerships
Who do you know? Who can you get to know? Obtain pre-commitments from customers or potential partners. This reduces uncertainty.
5. Pilot in the Plane - Control vs. Predict
Focus on activities you can control. The „effectual worldview is rooted in the belief that the future is neither found nor predicted, but rather made.“
6. Effectual Cycle - New Means & Goals
Every time you go through the cycle, your possibilities increase and that’s what entrepreneurship is all about, right? |
