Breaking Down the Five Habits of Expert Entrepreneurs with Saras Sarasvathy
By Gosia Glinska
It’s hard to make decisions in an uncertain world. According to the UVA Darden Professor Saras Sarasvathy, we can learn how to move forward to build the future we want from expert entrepreneurs. In the latest episode of the Hidden Brain podcast, “Innovation 2.0: How Big Ideas Are Born,” Sarasvathy shares the five habits of expert entrepreneurs she discovered when she studied how they think and make decisions in the initial stages of launching new ventures. She dubbed those habits the five principles of effectuation.
In her conversation with Hidden Brain’s host Shankar Vedantam, Sarasvathy explains that effectuation is the logic of entrepreneurial expertise that eschews prediction in favor of non-predictive control.
“Effectual thinking,” says Sarasvathy, “is a way to minimize predictive information while making decisions under great uncertainty. And the way you minimize predictive information is you are always dividing the world into things within your control and things outside your control. You ignore things outside your control and continuously use things within your control to shape and co-create the future. And you end up creating new effects in the world.”
One habit of expert entrepreneurs is the Bird in Hand Principle. Like the founders of Airbnb, who started with a spare bedroom and an air mattress, or the inventors of Post-It Notes, who transformed a glue that didn’t stick well into a highly profitable product line for 3M, you don’t need a big idea to begin with. Instead, you can start with resources already within your control – your bird in hand.
Whether you’re a novice or seasoned entrepreneur, a manager or someone who wants to learn how to deal with the growing uncertainty in the world, check out the 29 April episode of the Hidden Brain podcast to learn the five habits of expert entrepreneurs: The Bird in Hand, the Affordable Loss, the Lemonade, the Crazy Quilt, and the Pilot in the Plane Principle.
Want to hear more from Professor Sarasvathy?
Join us for a Q&A webinar hosted by Darden’s Batten Institute on May 17, 12:00 – 1:00 pm and bring your own questions. Register HERE.
The University of Virginia Darden School of Business prepares responsible global leaders through unparalleled transformational learning experiences. Darden’s graduate degree programs (MBA, MSBA and Ph.D.) and Executive Education & Lifelong Learning programs offered by the Darden School Foundation set the stage for a lifetime of career advancement and impact. Darden’s top-ranked faculty, renowned for teaching excellence, inspires and shapes modern business leadership worldwide through research, thought leadership and business publishing. Darden has Grounds in Charlottesville, Virginia, and the Washington, D.C., area and a global community that includes 18,000 alumni in 90 countries. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.
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