This document summarizes session 2 of a 10-week entrepreneurship course given at Solvay Brussels School of Economics and Management. The session discusses how entrepreneurs think and act differently than managers, focusing on effectuation theory and principles like starting with available means rather than predefined goals. It provides an example of how an entrepreneur dealt with unexpected opportunities through case studies and emphasizes experiential learning.

1. www.solvayentrepreneurs.be
HOW DO ENTREPRENEURS THINK AND ACT?
SESSION 2 (out of 10)
ENTREPRENEURIAL
THINKING AND
ACTING
This session is part of a 10-weeks course
given to master students of the SOLVAY
BRUSSELS SCHOOL OF ECONOMICS
AND MANAGEMENT by professor Olivier
WITMEUR.

2. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR 2
• How do entrepreneurs think
and act?
• Are they different from
“managers”?
• The difference between risk
and uncertainty.
QUESTIONS AGENDA RESOURCES
• Introduction to Effectuation
• Wafels & Dinges case
• What makes entrepreneurs
entrepreneurial (Sarasvathy)
Desired Outcomes of the Session

3. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
How To Navigate In Turbulent Times?
3
VOLATILITY
Nature, dynamics and speed of change.
A
U
C
V
AMBIGUITY
Haziness of reality, potential for misreads, and the
mixed meanings of conditions.
COMPLEXITY
Multiplex of forces, confounding of issues and
causes-and-effects confusion.
UNCERTAINTY
Lack of predictability and prospects for surprises.

4. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
ELEMENTS OF ENTREPRENEURIAL LOGIC:
INTRODUCTION TO EFFECTUATION
#1

5. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Managerial Approach based on optimization
Selecting between given means to achieve a predefined goal
5
How to optimize the use of the resources?
Given
Goal
Resource 1
Resource 2
Resource 3
Resource 4
Resource 5
Typical tools & techniques: project management, leadership, controlling, quantitative methods…

6. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
A more creative approach based on planning
Generating new means to achieve pre-determined goals
6
How to write a ‘case’ or a plan to
ask for more resources.
Resource 1
Resource 2
Resource 3
(needed)
(needed)
Typical tools & techniques: strategic and financial planning
Given
Goals

7. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Entrepreneurial Thinking
Imagining possible new ends using a given set of means
7
How to exploit one opportunity inside the
opportunity space?
Resource 1
Resource 2
Resource 3
Resource 4
Resource 5
Possible goal 1
Possible goal 2
Possible goal 3
…
…
Opportunity Space
Typical tools & techniques: co-creation, creativity, enrolment, lean entrepreneurship, bootstrapping….

8. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Introducing Effectuation:
The logic of expert entrepreneurs
8
The word effectual (entrepreneurial approach) is the inverse of causal (managerial
approach).
In general, in MBA programs across the world, students are taught causal or
predictive reasoning in every functional area of business.
Saras Sarasvathy, India

9. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Causation vs. Effectuation
9
CAUSATION EFFECTUATION (Cre-Action)
Planned approach
Top-Down
Managerial logic
Prediction based: To the extent we can predict
the future, we can control it.
Emergent approach
Bottom-up
Entrepreneurial logic
Control based: To the extent we can control
the future, we don’t need to predict it.
Effects are
predicted
Need to
manage the
causes
Causes are
given
Need to
manage the
effects
à For predictable situations à For uncertain situations

10. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
“The test of a first-rate intelligence is the ability
to hold two opposed ideas in the mind at the
same time, and still retain the ability to function.“
- F. Scott Fitzgerald

11. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Principle #1: Bird in Hand
11
Start with who you are, what you know and whom you know
… Not with pre-set/given goals (based on prediction)
Typical entrepreneurial resources
• Expertize, skills…
• Social capital
• Psychological capital: hope, optimism, self efficacy and resilience

12. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Principle #2: Affordable loss
12
Invest what you can afford to lose (extreme case = 0€)
… Not expected (risk adjusted) return

13. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Principle #3: Crazy Quilt
13
Build a network of self-selected stakeholders
… Not competitive analysis and transactional relationships with first-best partners.
Co-Creation Customers
Suppliers
Channels
Financial partners
Employees
Sponsors
…
Committed
stakeholders network
Crazy quilt, not puzzle.

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Principle #4: Lemonade principle
14
Embrace and leverage surprises (they can present new opportunities)
…Not avoid them

15. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Nils Bergvist
15
Question
• What would you do?

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About Nils
16
Swedish
Environmental engineer
Worked 8 years in the mining industry in Kiruna (in Northern
Sweden)
Passion for wildlife and sports

17. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Ice Hotel
17

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Principle #5: Pilot-in-the-plane
18
The future comes from what people do
… No inevitable trends
à Control vs Plan

19. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
The Dynamics of the Entrepreneurial Network
19
Who I am? What
I can do? Whom
I know?
My affordable
loss?
Who may be
involved?
Additional
resources
Iterative opportunity
co-construction
New Goals
The venture grows
step by step.
Dead end
My Goals?
Multiple techniques help to deal with these cycles: Design Thinking, Lean Startup,
Business Model Generation, Staged Financing…
To be continued.

20. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Managerial vs. Entrepreneurial Thinking
(stylized facts)
20
Effectual
Causal
Low
Low High
High Expert
Entrepreneurs
Experienced
VCs
Angels
Corporate
Managers
Novice
VCs
Bankers
Novice
entrepreneurs

21. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
From Causation to Effectuation…and vice-versa
21
TIME AND EXPERIENCE
LOGIC
Causal
Effectual
Novice
entrepreneur
Expert
entrepreneur
Start-up
firm
Large
firm
Shift in logic
necessitated by
firm growth
Entrepreneurs
do not always
manage to
bridge this gap
Moderating
effect of
resources

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Wafels & Dinges
22
Question
• What would you do next?
• What is your logic?

23. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR 23
Don’t wait/look for the
perfect opportunity.
Just start!

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NEVER STOP
WONDERING
&
ASKING!

25. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
A real passion for entrepreneurship education and entrepreneurs.
• Student entrepreneurs: 2x
• Full time entrepreneur: once, in a team of 5
• Coach: 500+ projects over the last 20 years
• (Advisory) Board member in multiple new ventures
• Policy making: 2x
• Director of Solvay Entrepreneurs
• PhD in entrepreneurship in 2008
• … never as an investor
My wife (as Colombo), no kids, one dog (Vicky).
25
Olivier Witmeur (Belgian, 46)

26. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
Solvay entrepreneurs is the entrepreneurship center of the Université Libre de
Bruxelles. We support entrepreneurs through the development of their venture, from
an idea to a successful and sustainable business.
26
Solvay Entrepreneurs

27. Entrepreneurship Course – Session 2 - 2014 © Olivier WITMEUR
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272014%©%Olivier%Witmeur
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