A Different Way of Looking at the World of Entrepreneurship
I started my entrepreneurial journey way back in 1996 when I quit my comfortable job as an accountant and plunged into a business which I have no idea yet – no business plan, no business ideas, no market research but with RM20,000 capital from Dad. Wasn’t thinking right at that moment. The only thoughts that I had at that time was making my first million in 180 days, drive fast cars, have a big bungalow and beautiful girlfriends! (haha…) That was the dotcom days. But yet, I was not in the dotcom business. I went into the enterprise solutions business, Customer Relationship Management, to be exact. Way ahead of time. I failed, or some of you may call it pivoted (in today’s term) over and over again with different kinds of business ideas.
Somehow, these failures made me wiser in terms of doing business. Keep getting better at spotting things and in business dealings. When I started the MCA ICT Resource Centre, I used these experiences to good use…multitasking, network, creative ways to make money etc. When I re-started my business through MAD Incubator, I used my new-found experience, expanded network, friends, clients and means to start an incubator with zero capital. From the word “Go”, I started with ready customers, partners and employees plus a ready incubator waiting for me to walk into this opportunity.
Many may shrug this off as me being lucky. Now I beg to differ. I see it now that those years of experiences have allowed me to obtain new means to be able to pull this off. It is not luck. Some people may call it being at the right place, at the right time. Again, I beg to differ. It is about harnessing resources and acquiring new means to do things over time. This is called Effectual Entrepreneurship.
I came across this term for the first time when I was at the Bangkok REE Program by Stanford University. REE stands for Roundtable for Entrepreneurship Education. It was just coincident that for the first time, I decided to venture out of Malaysia to acquire new knowledge and new materials to create new programs for Malaysians. It was a worthwhile investment. Anyway, I didn’t know that what I went through in my 15 years as an entrepreneur (that was 2011) ‘can be summarized in a framework called Effectual Entrepreneurship. The framework is as below:
Now I believe that entrepreneurship can be taught. It can be navigated even for those who are not entrepreneurs because the entrepreneurial mindset is inherent within ourselves. What we do in our personal life reflects some degree of entrepreneurship…such as finding a job, creating a career, bargaining or negotiating a good price, securing a project etc.
So, what makes entrepreneurs entrepreneurial? The answer is Effectuation. A study conducted by the University of Virginia, found that expert entrepreneurs tend to be effectual in thinking compared to novice entrepreneurs which they labeled as causal. Causal thinkers set an end goal and work towards the goal. Effectual thinkers flow like a river but they create how they want to flow and where they want to flow. They tend to build something out of nothing and are more inclined to see the future as something they set to shape today. Causal thinkers tend to think about predicting the future in order to control the future by planning their set course towards the future. Effectual thinkers seek to control the future so as not to predict the future.
- See the world as open, still in the making. They see human action as having a genuine role. The see firms and markets as human artifacts.
- Do not see opportunities as given or as being outside of their control. On the contrary, they believe in creating, as well as recognizing and discovering opportunities
- Do not have an instrumental view of the world. On the contrary, they see companies as a tool that allows them to create novelty for themselves and the world, they see markets as being made rather than found, and stakeholders co-create with them rather than being used.
- Work on making success happen rather than trying to avoid failure. They see failing as normal part of venturing. Because they are willing to fail, they often create portfolios of ventures, knowing and learning to kill those that will lead nowhere and nurture those with potential.
So now I know why I did what I did before. I now call myself an effectual entrepreneur these days. To help my fellow entrepreneurs, I’ve started the Ideas Acceleration Program, the starting point towards effectual entrepreneurship. This program was created within two weeks upon my return from Bangkok after the REE Program. We want to strengthen the effectual part in our entrepreneurs’ mindset. Go start the business first instead of waiting for seed money or grants to come in. Start with whatever means you can find and start in whatever form you can start.
From your effectual state, you will be able to identify potential businesses that you could start with your own means. Next, validate it to determine whether is there a market for it, are there people who would buy and pay for it, what would they buy and how much would they pay? Is it big enough for you to make money? Once you have validate the market, ask yourself is this business the one that you are passionate about doing and work towards starting the business.
So start being effectual and learn to be an effectual entrepreneur.