Reimagining Entrepreneurship Education Through New Frontiers of Effectuation

Professor Saras Sarasvathy’s research on entrepreneurship is a global phenomenon, with entrepreneurs across the world using her Effectuation framework to start and grow ventures in every imaginable field.

In addition to resonating with practitioners, the Effectuation framework Sarasvathy first posited in her 2001 paper has proven to be ripe for academic exploration, with more than 700 peer-reviewed articles published on the topic and instructors at all education levels using the principles to further entrepreneurial thinking and action.

In a sign of the continued appetite for creative application and exploration of Effectuation, the second annual Reimagining Entrepreneurship Education symposium drew more than 40 educators from across the country to the University of Virginia Darden School of Business in early October to explore new frontiers in entrepreneurial thinking and practical tactics for incorporating effectual techniques into instruction.

Welcoming attendees, Omar Garriott, executive director of the Batten Institute for Entrepreneurship, Innovation and Technology, said the gathering offered an opportunity to continue to explore the many applications of entrepreneurial education.

“It’s our firm belief, which has never been truer than now, that the entrepreneurial mindset and skill set are critical for learners of every age and stage,” said Garriott. “First, to future proof their own careers, but secondly, and most importantly, to provide maximal value to organizations and society.”

Garriott said the entrepreneurial mindset and toolkit were “increasingly synonymous with leadership,” and experiential entrepreneurial education was among the most effective ways to learn leadership skills that would serve students well regardless of professional path.

Pushing Effectuation Education Forward With the CAVE Framework

Sarasvathy, who has relentlessly built upon the practical applications of Effectuation since first detailing the theory nearly 25 years ago, led attendees through a novel framework for considering prediction and control in the entrepreneurial environment via the case of a Swedish entrepreneur and his vision for an ice sculpture festival in the arctic circle. When rain and warming temperatures threaten to ruin the event on its grand opening, organizers must act to salvage the venture.

“What do you do?” Sarasvathy asked the gathered instructors.

Gathering a range of ideas over the course of an interactive discussion session, Sarasvathy mapped the ideas and tactics into four quadrants labeled Causal, Adaptive, Visionary and Effectual, (CAVE) each with different attributes related to strategic approaches entrepreneurs use to navigate uncertainty.

• Causal relies on prediction and planning
• Adaptive focused on pivoting and adapting to the environment
• Visionary pertains to pitching and persuading and seeking to compel others to follow
• Effectual emphasizes shaping elements of the environment in partnership with self-selecting stakeholders

The framework may be useful for educators in the entrepreneurial field because the techniques and practices in the quadrants include many of those taught in academic courses, including Effectuation principles, but also Lean Startup and the Business Model Canvas.

Entrepreneurs tend to make use of the tools and strategies in each quadrant, Sarasvathy said, and an embrace of a particular technique does not come at the exclusion of another methodology. The CAVE framework can offer guidance on how to use the various techniques, taking a grab bag of tools and organizing them into a “rigorous framework.”

Sarasvathy led the instructors through a means-driven, rather than goal-driven, approach to teaching entrepreneurship with an effectuation lens in a low-prediction environment. In an environment rife with uncertainty, accurate prediction is rarely feasible, and often undesirable. Techniques of non-predictive control, which can be both taught and learned, can create new results no one could have predicted, she said.

Students can learn to not let concrete goals narrow the possibilities in front of you, Sarasvathy said, but to focus on what one can do with what they have, who they know, and how they can potentially co-create with others.

“At the end of the day, we want to build an outcome that we could not even imagine,” Sarasvathy said. “The idea is you don’t have to settle for small aspirations.”

As for the real-life case that kicked off the discussion, a melting igloo eventually became the inspiration for an ice hotel, a popular tourist attraction that is rebuilt anew every year.

Entrepreneurship Education as a Path to a ‘Wide Open’ Future

Sarasvathy has long held that just as the scientific method is taught to everyone, not just aspiring scientists, so too should entrepreneurship be taught to all students. One of the purposes of the Reimagining Entrepreneurship Education was to share ideas and best practices as members of the field continue to work toward rigorous and relevant entrepreneurship education. While Sarasvathy’s vision of universal entrepreneurial education is not yet a reality, the gathered educators demonstrated the breadth of entrepreneurial instruction across institutions.

Craig Armstrong, a professor at the University of Alabama’s Culverhouse College of Business, has taught a variety of entrepreneurship courses at the undergraduate and graduate level, said he sees such instruction as a “life skill” for students as they chart their professional journey.

Students with effective entrepreneurial education learn to advocate for themselves, to understand that problems are also opportunities and that there are methods to effectively catalyze those opportunities, which come in all shapes and sizes, he said.

“It’s wide open,” said Armstrong of what one can do with entrepreneurial education. “There are 100 things you can do, and you don’t have to wait for someone to give you permission.”

Indeed, Ethné Swartz, a professor at Montclair State University’s Feliciano School of Business, said researching and teaching in the innovation and entrepreneurship space offers value regardless of eventual professional destination.

“Entrepreneurship education invites students to explore both self and others, helping them develop self-awareness, self-management, and the confidence to advocate for their ideas” said Swarz. “These capacities are essential for young people to question assumptions, think creatively, and engage meaningfully with the complex challenges they will face throughout their lives.”

Beyond knowledge of self, there is also a wealth of tactical information students learn when progressing through an entrepreneurial process.

Jacqueline Kirtley, who teaches courses on entrepreneurship and technological innovation as a professor at the University of Pennsylvania’s Wharton School, said students grow as they learn how to take an innovation idea through a potential path of founding and funding. It’s exciting work for instructors and the budding entrepreneurs, she said, rewarding to help students learn the many varied ways they can fund their ventures.

“It’s a challenge, and it’s an important thing for college and MBA entrepreneurs to learn a lot more about all the different ways you can fund your firm,” said Kirtley. “In the outside world, you hear about going to a bank, pulling from your savings or going to a VC. There’s much more to it, and in the complexity of the macroeconomic environment, the state of debt and interest rates, we need them to know that there are more options, and we need to help them understand which option fits with the kind of company they are trying to build.”

Indeed, the shifting nature of the economy and jobs market and its potential relationship to entrepreneurship is a persistent undercurrent in discussions around the field in higher education.

Armstrong said students who pursue entrepreneurship education and have attempted venture creation, even on a small scale, often build what he termed “legitimacy” in the eyes of future employers or partners — and even themselves — with the ability to talk about the tangible thing you’ve built or done often proving to be a significant career boost.

Muhammad Muhammad, who teaches entrepreneurship courses at Texas Tech University, said some students, facing uncertain career prospects, are embracing the notion of what it might look like to bet on themselves and create their own opportunities.

“With the high rate of change and AI technology becoming a big disruption in the way we do business, I think that may encourage a lot of students to consider whether they should try to create value on their own and create something new,” said Muhammad. “I do think that may be a push toward entrepreneurship.”

Approaching Entrepreneurship Instruction Through Multiple Lenses

The gathered educators came to Darden with varying degrees of familiarity with Effectuation in the classroom. Some are actively using the framework, others noted that they incorporate elements of the approach.

Rafe Steinhauer (MBA ‘15), a Darden graduate teaching in the engineering school at Dartmouth College, said he actively uses the techniques in his courses and research, both of which focus on how design methods can be used to improve education.

“In a liberal arts education like Dartmouth’s, effectuation as a model for entrepreneurship is exciting because it’s both empirically sound and broadly applicable,” said Steinhauer. “Its practices for co-creating in unpredictable, human-shaped contexts travel well beyond venture-formation: build genuine partnerships, understand your collective means before setting goals, and continually adapt as you learn.”

Armstrong, who said he was introduced to Effectuation upon the release of Sarasvathy’s initial paper, said he uses many of the techniques in his courses, particularly as it relates to building and taking stock of resources. The word Effectuation may not resonate with students, but the principles often do.

“It’s just another way to be resourceful, and the students can appreciate that,” said Armstrong. “They learn to ask, ‘What resources are available to me?’”

Swartz said she actively uses Effectuation alongside Lean Launch in her Entrepreneurial Mindset and Innovation class and sees the two as “beautifully” complementary.

“Because the principles of effectuation are intuitive and accessible, students quickly grasp them and can identify opportunities to apply effectual decision-making during and after customer discovery,” said Swartz. “Together, effectuation and Lean Launch provide a strong, experiential foundation for my course, reinforcing both entrepreneurial thinking and practical application.”