Rene Mauer op DIA-symposium 22-2-2013

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Learning from entrepreneurial expertsfor incubation: Effectuation

Dutch Incubator SymposiumMaastricht22.02.2013

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Dr. René MauerRWTH Aachen LS WIN: [email protected]

Effectuation Intelligence: [email protected]

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René Mauer

• PhD at RWTH Aachen on effectuation and unplanned behaviorin general

• 2006-2008 project manager of the RWTH Aachen center forentrepreneurship

• Co-owner of family business, founder of tech start-up

• Active researcher in the field of effectuation (Aachen is leadingresearch hub on effectuation in German-speaking countries)

• Partner of the international expert network EffectuationIntelligence that puts the entrepreneurial method to practice

Who’s talking?

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What makes entrepreneurs successful?

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Visions?Talent and gifts?Circumstances?Luck?

© (c) M.Faschingbauer 2010 4

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Goal orientation

Management

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Expected return

Management

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Risk management

Management

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Positioning

Management

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Effectuation – What‘s that?

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State-of-the-art entrepreneurshipresearch

Elements of expertise by experiencedentrepreneurs

Method for coping with uncertainty

Observable, teachable, learnable

Based on four principles that are tied intoa process

Flips the assumptions of classic management upside down

Effectuation

Saras D. Sarasvathy, Darden School of Business, University of Virginia

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Goal orientation Means orientation

EffectuationManagement

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Expected return Affordable loss

EffectuationManagement

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Risk management Leveraging contingencies

EffectuationManagement

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Positioning Self-selecting partners

EffectuationManagement

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Approaching the future entrepreneurially:Shaping instead of predicting

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What we can predict, we can control.

What should we do?(based on pre-existing and reliable knowledge)

What we can control, we do not need to predict.

What can we do?(based on individual means)

Effectuation logicManagement logic

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Classic management

analyse decide plangather

resources act

Idea

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Entrepreneurial expertise(Effectuation)

What arethe means?

What canI do now?

Whom doI talk to?

Who joinsIn?

Newmeans

Newgoals

Ideas become more precise

Means and resources increase

Means

Alternatives

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Typical reactions at this point

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I finally know how to explain mychaotic style! Interesting that it took so long for

researchers to find out what I haveknown as an entrepreneur/incubationmanager for a long time.

Great! Finally a method that not only asks me to write businessplans. Oh no, I think I stick with the method

that lets me write business plans.

What is effectuation good for?

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When does effectuation add value?

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„Suicidequadrant“

Existingmarket

Newmarket

Existingproducts

Newproducts

Ansoff matrix

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Life cycle of innovative projects(e.g. new companies, markets, products, )

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Effectuation

Classic management

knowledge

Uncertainty

t

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What makes entrepreneurs successful?

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Visions?Talent and gifts?Circumstances?Luck?A good mix of EFFECTUATION andmanagement?

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3%

6%

8%

11%

6%

10%

12%

6%

14%

17%

30%

27%

17%

36%

39%

22%

3%

8%

5%

9%

3%

-22%

-17%

-18%

-12%

-22%

-8%

-8%

-13%

-20%

-19%

-19%

-22%

-13%

-14%

-4%

-8%

-4%

-8%

-3%

-6%

2%

3%

3%

2%

3%

4%

1%

6%

1%

1%

1%

-23%

-23%

-19%

-19%

-16%

-15%

-15%

-23%

-24%

-31%

-7%

-7%

-80% -60% -40% -20% 0% 20% 40% 60% 80%

Reifungs-geschwindigkeit

CausationEffectuation

Investition Interaktion Reaktion Aktion Aktion Reaktion Interaktion Investition

Pan

Calypso

Methone

Greip

Atlas

Mimas

Narvi

Bestla

4% 31% 22% 23%

7% 24% 17% 23%

8% 20% 18% 19%

4% 19% 12% 19%

8% 19% 22% 16%

3% 22% 8% 15%

6% 13% 8% 15%

7% 14% 13% 23%

Some local research: Early-stage technology ventures(Aachen, 2011)

Gestationspeed

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Some local research: Early-stage technology ventures(Euregio, 2012)

EffectuationCausation

EffectuationCausation

Big Picture: Expectations met!

Looking closely: Back and forth!

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Conclusion

- Effectuation is the entrepreneurial method, specifiedin 4 principles

- Depending on the degree of uncertainty it can be the toolbox of choice

- Ventures following the principles show quicker gestation than others

- Incubators might want to consider spending energy on teaching the effectual mindset and process

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Thank you very much!

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Literature:

Faschingbauer, M. (2010): EffectuationWie erfahrene Unternehmer denken, entscheiden und handeln. Schäffer-Poeschel(Fachbuch Praxis)

Blekman, T. (2011):Corporate Effectuation – Vanafnu is ondernemer-schap echt teleren!

Sarasvathy, S.D. (2008): EffectuationElements of EntrepreneurialExpertise. Edward-Elgar(Science)

Internet:

German language platform:„EFFECTUATION Forschung & Praxis“www.effectuation.de|.at|.ch

Dutch language platform:www.effectuation.nl

International expert network:„Effectuation Intelligence“www.effectuation-intelligence.bizwww.effectuation-intellingence.nl

Global platform:„Society for Effectual Action (SEA)“www.effectuation.org