Elements of Entrepreneurial Expertise

New Horizons in Entrepreneurship series

Saras D. Sarasvathy

To effectuate is to engage in a specific type of entrepreneurial action. It has special importance for situations where the future is truly unknowable or human agency is of primary importance. In Effectuation, Saras Sarasvathy explores the theory and techniques of non-predictive control for creating new firms, markets and economic opportunities.

Chapter 4: Understanding Effectuation: Problem Space and Solution Principles

Saras D. Sarasvathy

Subjects: business and management, entrepreneurship


4. Understanding effectuation: problem space and solution principles The contrasting metaphors of a patchwork quilt and a jigsaw puzzle capture the difference between an effectual and a causal logic of action. The prevailing myth of the entrepreneur is that of a visionary who is able to see farther into the future than the average person, who solves the complex jigsaw puzzle of a profitable opportunity more quickly and efficiently than others, bringing together financial resources, key people and capabilities that create a large and sustainable competitive advantage. But the problem with the jigsaw puzzle metaphor is that the picture – the market opportunity – already exists, so entrepreneurship is primarily a task of discovery. The expert entrepreneurs in the study, irrespective of whether they saw themselves as visionaries or not, did not in the actual experiment behave as though the picture existed and was just waiting to be put together. Instead, they proceeded rather like an accomplished quilter making a patchwork quilt. Making a patchwork quilt differs from solving a jigsaw puzzle in at least three ways. 1. The quilter has wider latitude than the puzzle solver in putting together the pattern. Even when she begins with a basket of random patches, she can choose which patches to use and juxtapose them in a way that she personally finds pleasing and meaningful. Large quilting projects are usually communal: a good quilter works with others who bring their own baskets of patches along with their tastes and...

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