By Fatmanur Erdogan, Hürriyet Daily News
February 13, 2009
Many people in corporate jobs dream about being their own boss someday. They want to become entrepreneurs, but they never take the big leap of faith it requires. They might think it is too risky financially, or they can’t muster the courage to take that important first step. Whatever the reasons for the hesitation, it usually comes down to one main thing: turning a dream into reality is a lot messier than, and not always as fun as, simply dreaming.
Then there are others, who do the opposite and underestimate the challenges of entrepreneurship. They think they can run a coffee shop just
because they enjoy the taste of good coffee. Or, they go to an expensive business school to learn how to be an entrepreneur, even when it is hotly debated whether a business school can actually teach entrepreneurship.
For those of you sitting on the fence, not sure if you have the skills to make your dream a reality, I recommend you read Professor Saras Sarasvathy’s study of what makes entrepreneurs entrepreneurial. Sarasvathy, a professor at the University of Virginia, focuses on the differences between what she calls “causal reasoning” and “effectual reasoning”.
According to Sarasvathy, causal reasoning is the kind of thinking we see every day in the corporate business world. It begins with a pre-determined goal and a given set of tools, and seeks to identify the optimal – fastest, cheapest, most efficient, etc – way to achieve that goal. It is the kind of thinking you’ll find taught at most business schools, because its focus on arriving at a known destination fits comfortably into the planning-oriented corporate world.
On the other hand, effectual reasoning doesn’t begin with a specific goal. Its starting point is the given set of tools, and it allows goals to emerge contingently over time. Where causal reasoning defines “Where will we go” before it asks, “What tools do we have”, effectual reasoning defines, “What tools do we have”, and then gets started while it allows “Where will we go” to evolve.
Sarasvathy adds that the best entrepreneurs are capable of using both methods well, fluently switching back and forth between the two. However, especially in the early stages of a new venture, they tend to prefer effectual reasoning.
I find her analysis fascinating for three reasons: First, it reminds us that the corporate business world crumbles when faced with uncertainty. Entrepreneurs, on the other hand, thrive on that uncertainty, and see it as freedom to create the future. Especially in unpredictable times, then, having a built-in spirit of intrapreneurship is invaluable for organizations. Even though it can be difficult for a company to establish and nurture that spirit, it is absolutely necessary for its long-term survival.
Second, Sarasvathy’s interpretation suggests that if you enjoy knowing exactly what result your actions will bring, you might find entrepreneurship especially stressful. Entrepreneurs need the emotional stamina to face an unknown future with confidence, and when something bad happens, they need faith in their ability to turn things around.
Third, though, her analysis also reminds us the world needs both types. Just as too much causal reasoning is bad, so too is an excess of effectual reasoning. If you are more comfortable with the known entities of causal reasoning, you don’t need to give up your hopes of an entrepreneurial life. Just know that you might need to find a partner strong in the effectual department, to help you carry your business through the uncertain times. As they say, two heads are better than one.
If you are sitting on the fence, not sure if you are cut out for entrepreneurship, stop using your internal debate as an excuse to hold back. Even the most successful and well-established entrepreneurs are probably still having that same debate with themselves. So take your idea to market. If you are willing to learn as you go, and to let others with different strengths carry the business where you are weak, you have what it takes to be an entrepreneur.