POE

Causation rests on a logic of prediction. It takes a particular effect as given and focuses on selecting means to create that effect. It works best in stable markets with predictable prices and demand.

Effectuation rests on a logic of control. It takes a set of means as given and focuses on selecting possible effects that can be created with those means. It works in entrepreneurial startups and unstable or non-existing markets.

It helps answer questions like: How to price a product when the market doesn’t exist yet? How to hire for an organization that does not yet exist? How to value firms that did not exist five years ago?

Why? The reason why the organization exists. How? The methods that make the organization special. What? The products or services they provide.

Advantages: Helps structure and challenge the business idea; may assist in approaching stakeholders before establishing the company. Disadvantage: Not very helpful in practice due to rising uncertainties.

Market (customer, size, growth), Management (financial strength, talent), Product (cost, materials), Regulation (government, laws), Finance (expected return on investment)

Means (Who am I?) then Goals (What can I do?) then Interaction (with people I know) then Commitment (gain stakeholder commitment) then New means and new goals. Entrepreneurs use contingencies as opportunities.

Abstract and intangible. Needs to evolve based on feedback and research.

Concrete and actionable. Reflects a confirmed market need or demand. Demonstrates a clear competitive advantage.

An idea is a thought or concept that exists in the mind of an individual or group. An opportunity is a chance for progress or advancement under favorable conditions with profit potential.

Expected annual market growth, Market size, Number of competitors, Time to first sale, Desirability of the product, Innovativeness of the product.

Discovery approach: Opportunities pre-exist and are waiting to be found (causation). Creation approach: Opportunities are not just found but actively created (effectuation).

Environmental scanning, market research, and analysis. Recognizing gaps in the market. Relies on existing market trends and customer needs, leading to incremental innovations.

Experimentation and engaging with customers. Proactive and dynamic, focused on radical innovations. Creates entirely new markets.

Select an industry. Research. List pain points (common complaints or needs). Analyze (describe currently available solutions). Identify opportunities (describe gaps where current offerings fall short of needs). Focus on serving a need (addressing customer pain).

Collect insights (talk to people about their problems in a specific domain). Generate ideas (using design-studio methods and Double Diamonds for problem-solution alignment). Collect feedback. Refine (adjust the idea). Describe (write down the resulting business concept). Focus on creating a need (providing customer gain).

Technological events, Market events (economic openings), Social events, Societal changes (e.g., urbanization).

Serving: Lifetime warranty for sunglasses. Creating: iPad, e-scooters.

A creativity test that assesses divergent thinking, such as linking a word to cue words.

Free associations (e.g., brainstorming, idea space, "kill your company"). Forced relationships (e.g., mind-mapping). Analytical approaches (e.g., matrix analysis, attribute listing).

Grounded ideas: Safe, obvious, plain. Blue sky ideas: Forward-looking, unique. Space ideas: Crazy, laughable, absurd.

Problem? Customer? Willingness to pay?

True.

False. It starts with means from which the entrepreneur derives goals.

True.

False. Competitive aggressiveness refers to "beating competitors to the punch" and involves intense head-to-head competition. Autonomy refers to the independent action of an individual, team, or organization in carrying out an idea or vision to completion.

False. This describes the creation approach. The discovery approach reacts to exogenous changes and observes phenomena (causation logic).

Financial, Natural, Physical, Social, Human.

Human capital consists of the knowledge, information, ideas, skills, and health of individuals.

Represents the economic value of employees for the firm. Difficult to assess because it is intangible. At the firm level, it is more than the sum of individual human capital. HRM orchestrates these resources.

This theory uses economic logic to study individual decisions about investments in productivity-enhancing skills, career choices, and work characteristics. Individuals choose occupations that maximize the present value of economic and psychic benefits over their lifetimes.

Education: Schooling, training programs. Experience: Work experience, internships.

Specific skills and knowledge of individuals and groups regarding entrepreneurship. Education: Management studies, learning by doing. Experience: Self-employment, freelancing.

Today’s attitude does not fully predict future behavior. Today’s intention (attitude, subjective norm, self-efficacy) serves as a predictor of future behavior.