Effectuation criticism: the risk in your own hands.
Effectuation criticism comes in two kinds, academic and practical. First, in 2015 three researchers argued the theory was never adequately tested. However, the worry that matters is simpler: starting from your means builds what you can, not what anybody wants.
A paper that asked a hard question.
In 2015 Richard Arend, Hessam Sarooghi and Andrew Burkemper published in the Academy of Management Review. Their title was "Effectuation as ineffectual?" and the doubts were serious. In fact, they found the theory not adequately tested, partly less novel than claimed, with no proven advantage. Then Sarasvathy and three colleagues replied the following year, arguing a theory of action is tested by usefulness. So the argument between them has not been settled.
The sample and the deeper effectuation criticism.
In addition, there is the sample, a problem you met in chapter one. All twenty-seven had already won before they walked into that room. But the objection that should worry you points straight at your own hands. Of course, you can control what you make, and that part is real. Yet you cannot control whether one single person will pay you for it.
Comfort on the road to nowhere.
The author drove down that road in chapter two, with the account full. Indeed, building the wrong thing beautifully is the most ordinary way a small company dies. As a result, building something nobody wants can feel like progress the whole way there. Therefore this effectuation criticism leaves you a question. Does the inventory help you, or just organise how you fool yourself?
Test your plan against the effectuation criticism.
Write one sentence naming who would pay for what you plan to build.
Next to it, mark whether you know that, or simply hope it.
From the book.
If you begin from what you already have, you will build what you're able to build, and that is not remotely the same thing as building what anybody wants. You can control what you make. You can't control whether one single person is willing to pay you for it.
I Want to Start a Business but I Don't Have Money, chapter 3: The bird in hand: you already have what you need
Questions about effectuation criticism.
What is the main effectuation criticism you should worry about?
Starting from your means builds what you are able to build, which is not the same as what anybody wants.
Was the 2015 paper ever answered?
Yes, Sarasvathy and three colleagues replied the following year. However, the argument has not been settled.
Why does the sample of founders matter?
All twenty-seven had already won before they entered the room. Also, that is the same problem raised in chapter one.
Read the whole chapter.
This lesson covers one section of chapter 3, “The bird in hand: you already have what you need”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 How expert entrepreneurs think: start from your means.
- 02 Effectuation criticism: the risk in your own hands.
- 03 Entrepreneurial bricolage: when making do stops working.
- 04 Monetize skills you give away free: the hidden price.
- 05 Kevin Irungu 3D printing: starting with one socket.
- 06 Personal means inventory: three columns, one phone.