find it attached , quality work and on time

The idea will more likely be created as a result of setting out on the journey. We’ve learned that entrepreneurs aren’t looking to take huge risks, nor are they genius forecasters; instead, they risk only what they can afford to lose and they seek to control and shape the future rather than making futile predictions. We’ve learned that many entrepreneurs don’t necessarily “ take the plunge”; they set out gradually, constructing the business in components while preserving the ability to return to the dock. Finally, we’ve seen that success and failure are a matter of perspective —how you define those terms depends on what you an d your partners want to do. Expert entrepreneurs, we’ve seen, follow a logic of effectuation, working with readily available resources and taking small steps into uncertainty, thus shaping the future as they go. Several principles guide the effectual entre preneur. In this chapter, we explore the first principle —working with the means at your disposal. We call this the bird -in-hand principle after the old saying that “a bird in hand is worth two in the bush.” We begin by looking at how effectual entrepreneur s start with means, while causal entrepreneurs start with goals, and the difference between the two approaches. We then explore the idea of means in greater detail, helping you work with what you already have (but may not be aware of ). What do we Mean by “Start with your Means?” People focus so much on whether they will be successful or not, whether their idea is a good one or not, that they forget about all the things they could be doing with what they already have —their means. There are three categories of means available to all of us: who we are (traits, abilities, attributes), what we know (expertise and experience), and who we know (social networks). For the effectual entrepreneur, the fundamental question is, “What effects can = create, given who I a m, what = know and who = know?” :e or she begins by imagining several possible courses of action, the consequences of which are, for the most part, uncertain. The entrepreneur evaluates these courses of action in terms of what resources need to be put at r isk to pursue each. Any course of action needs to have the possibility of becoming valuable, but rather than select on an expected upside, she prioritizes them according to which possibility is associated with the most acceptable downside. The entrepreneur ’s decision about what to pursue is also co -determined by stakeholders willing to commit resources. As they contribute various resources, according to their own means and affordable loss, stakeholders set immediate agendas and generate new sub -goals for th e venture, thus helping shape it. This effectual approach stands in stark contrast to the causal approach. The crux of the difference between the two is how you think about goals and means approach, you begin with clear goals. These goals may be externally imposed (e.g. maximization of shareholder value in a public corporation), or self -imposed (e.g. I want to make US$10 million before I am 40 years old). In both cases, the goals are given, so the only real decision is how to accumulate the resources necessary to achieve them. Often, this question leads to the formation of a vision that will induce the stakeholders who possess those reso urces to come on board. The accumulation of resources becomes the predominant purpose of the venture, and stakeholders are seen primarily as resource providers. So, effectuation is means -driven and the causal approach is goals -driven. But aren’t entreprene urs highly goal -driven individuals? Practically Speaking Power of Personality Born Josephine Esther Mentzer, Estée Lauder created a cosmetic giant in the first half of the twentieth century by unabashedly leveraging both what she loved and hated about her heritage to reinvent herself.

Starting with her name, which she changed from Esty to Estée and her married name of Lauter to Lauder, she reached out to o ther women, helping them see that they, too, could be whoever they wanted to be. A beautiful mind Even in her early days in business, instead of greeting potential customers with the usual, “May = help you?” the self -created Estée Lauder would approach women i n beauty parlors and say, “= have something that would look perfect on you, madam. May = show you how to apply it?” Later, in places like Saks Fifth Avenue and Neiman Marcus, she would say, “Try this. = am Estée Lauder, and these are the most wonderful bea uty products in the world.” A beautiful approach Because Lauder did not have the kind of money her compet itors, such as Revlon, were spending on ad campaigns, she gave out free samples —a practice unheard of in the industry at the time and jeered at by professionals as a recipe for disaster, tantamount to “giving away her whole business.” :owever, Lauder averr ed this was “the most honest way to do business,” and it turned out that people who trooped into the store to get free samples ended up not only buying products but also acting as word -of-mouth evangelists — something no ad budget could buy. Her approach to her retailer customers was also driven by her distinct personality —who she was. Stanley Marcus, head of the Texas -based department store, described her as “… a very determined salesperson; she pushed her way into acceptance. She was determined —and graciou s and lovely through it all. It was easier to say yes to Estée than to say no.” [Read, Stuart/Sarasvathy, Saras/Dew, Nick. Effectual Entrepreneurship] A beautiful approach Because Lauder did not have the kind of money her competitors, such as Revlon, were spending on ad campaigns, she gave out free samples —a practice unheard of in the industry at the time and jeered at by professionals as a recipe for disaster, tantamount to “giving away her whole business.” :owever, Lauder averred this was “the most honest way to do business,” and it turned out that people who trooped into the store to get free samples ended up not only buying products but also acting as word -of-mouth evange lists — something no ad budget could buy. Her approach to her retailer customers was also driven by her distinct personality —who she was. Stanley Marcus, head of the Texas -based department store, described her as “… a very determined salesperson; she pushed her way into acceptance. She was determined —and gracious and lovely through it all. It was easier to say yes to Estée than to say no.” Yes. And the important thing to realize is that goals exist in hierarchies. It is not that effectual entrepreneurs have no goals; indeed, they may have quite ambitious higher -level goals. But when push comes to shove and the choice is to be tethered either to means or to specific lower - level goals, they are more likely to change those goals rather than chase means they have no control over. Understanding that goals exist in hierarchies leads to two important insights: (1) higher level goals, such as wanting to be a millionaire by age 40, do not tell you what you should do on the first day of your new venture; and (2) tying yourself down to specific lower -level goals, such as starting an upscale restaurant in a high -income neighbourhood , focuses your entrepreneurial actions on pursuing resources you currently do not possess. Starting with what you can do with your readily available means is a practical approach, helping you take action now toward building your new enterprise w ithout giving up your higher level , longer -term goals, such as becoming financially successful or being your own boss. What are some of the advantages of being means -driven rather than goal -driven? • You are not chasing investors. • You are not waiting for the perfect opportunity or the perfect set of resources. • You are working with your strengths without having to overcome your weaknesses first. • You attract co -creative stakeholders, who want to shape go als, not just provide resources. • You are increasing the possible slate of stakeholders who can self -select into your venture. • You are increasing the probability of innovative surprises. • You are increasing the likelihood of finding or creating opportunities that are a better fit for you. • You are decreasing the cost of possible failure, as you only risk means that are affordable to lose, and by doing that: • You are increasing the likelihood that failures will be learning experiences that you can recover from f aster and build on when you are ready to try again. • You are forcing yourself to get creative with meagre resources, including slack resources and even waste Practically Speaking Working with what You Have Barbara Corcoran runs a real estate empire worth US$4 billion. =n her book Use What You’ve Got (Corcoran and Littlefield, 2003: 6), she recounts a crucial piece of advice her mother passed along: =f you don’t have big breasts, pu t ribbons in your pigtails. She learned this during her job as a waitress, when she felt her life was going nowhere fast. One day she came home complaining to her mother that the other waitresses were getting all the attention because they had big breasts and she did not. :er mother replied, “You’re going to have to learn to use what you’ve got. Since you don’t have big breasts, why don’t you tie some ribbons on your pigtails and just be as sweet as you are.” Which is exactly what she did … Lesson: Forget a bout what you don’t have and focus on what you have. Chapter 10 The bird -in-hand principle: Start with what you have IN THIS CHAPTER: ■ What do we mean by “start with your means? ” ■ Who I am: The unbeatable competitive advantage ■ What I know: Bringing learning to the venture ■ Who I know: Six degrees of separation ■ How it works ■ Map your means Who I am: The Unbeatable Competitive Advantage We do not usuall y think of ourselves as the primary source of valuable new opportunities or as the basis for unique competitive advantages. Yet a little reflection will show this can indeed be true and often is. One of the most beautiful things about entrepreneurship is t hat there are probably as many high -potential opportunities as there are individuals. Unlike other professions, such as medicine, accounting, dance, or sports, there is no one particular set of skills, abilities, or personality types necessary and sufficie nt for entrepreneurial success. An accountancy -based enterprise, such as H&R Block, can co -exist with an athletics -based firm, such as Nike, on the list of the most successful companies ever built. Similarly, a flamboyant risk taker, such as Mark Cuban, an d a prudent calculator, such as Daniel Snyder, can both build thriving entrepreneurial careers resulting in eventual ownership of sports teams (the Dallas Mavericks in the case of Cuban and the Washington Redskins in the case of Snyder). If we begin with t he premise that who we are and what makes us unique could be not only the starting point but also the basic ingredient of the venture and market opportunity we set out to create, we throw open the door to courses of action we would otherwise be blind to. I n fact, the success of many enterprises can be traced to the idiosyncratic circumstances and eccentric quirks of their founders. What I Know: Bringing Learning to the Venture Think about all you know, the facts, wisdom, and insight you’ve gained from you r idiosyncratic life experiences. Now consider that Who i am: The Unbeatable Competitive Advantage We do not usually think of ourselves as the primary source of valuable new opportunities or as the basis for unique competitive advantages. Yet a little reflection will show this can indeed be true and often is. One of the most beautiful things about entre preneurship is that there are probably as many high -potential opportunities as there are individuals. Unlike other professions, such as medicine, accounting, dance, or sports, there is no one particular set of skills, abilities, or personality types necess ary and sufficient for entrepreneurial success. An accountancy -based enterprise, such as H&R Block, can co -exist with an athletics -based firm, such as Nike, on the list of the most successful companies ever built. Similarly, a flamboyant risk taker, such a s Mark Cuban, and a prudent calculator, such as Daniel Snyder, can both build thriving entrepreneurial careers resulting in eventual ownership of sports teams (the Dallas Mavericks in the case of Cuban and the Washington Redskins in the case of Snyder). If we begin with the premise that who we are and what makes us unique could be not only the starting point but also the basic ingredient of the venture and market opportunity we set out to create, we throw open the door to courses of action we would otherwis e be blind to. In fact, the success of many enterprises can be traced to the idiosyncratic circumstances and eccentric quirks of their founders. What I Know: Bringing Learning to the Venture Think about all you know, the facts, wisdom, and insight you’ve gained from your idiosyncratic life experiences. Now consider that In thinking about creating such a network, consider three sources of stakeholders. The first source is the people who are directly and perhaps immediately accessible to you: friends, family, and acquaintances. The second is people you meet serendipitously, by chance or accident. And the third source is those you don’t know directly, but they are linked to you through people you do know. We all exist in a network of connections: we know people who know people who know people (and on and on) who could become helpful partners. =f you believe the “six degrees of separation” theory, you’d need to move only six steps out to be connected to ever yone in the world. Distant contacts can be some of the most valuable because they may offer perspectives and ideas you’ve never encountered before. This is what’s known as “the strength of weak ties.” How it Works To see how this means -driven process works, consider examples from the history of entrepreneurship. The entrepreneurs who founded Sears, Staples, Starbucks, CNN, and many other companies used their means to shape, step by step, their opportunities. Their e nduring ventures mostly started small, without elaborate market analyses. The entrepreneurs wove together the mundane realities of who they were, what they knew, and who they knew into projects that they believed were worth doing. They then continually added to their projects, pushing them outward, reshaping them to work with new stakeholders, stretching themselves —just a bit at a time to reach higher and farther —until eventually they transformed both their means and ends into unimagined new possibilities. Map Your Means Start by prin ting off a one -page version of your resume. Then start adding things. Be creative about what you consider; it needn’t be things you would normally include in a resume. To get started, look back at your life. What means did you acquire or build: • As a tee nager • At school • At university • =n your first, second … job • In your private life • With your hobbies, activities • From your parents? How would your friends, colleagues, family, or acquaintances describe your means? Be as broad as you can. You will cer tainly need more room than we provide in the “=nventory Your Means” table, but we hope this gives you a place to start. Slack and other Resources you Don’t Even Know you have Sometimes unusual opportunities and the successful ventures built on them are f orged from resources you don’t even recognize as resources in the first place. Truth is the world is full of “slack” —resources left over from other uses or simply lying around because nobody has paid attention to them. Slack can include anything from waste to empty space to loopholes in the law to buffers created for emergencies. Consider the story of billionaire J.R. Simplot, the founder of potato processing plants and creator of the first frozen french fries. He began his career by collecting hogs set for slaughter by farmers who feared a pork surplus. Simplot fed the hogs until demand returned and when he sold them to the meat companies, made enough money to buy an electric potato sorter. Throughout his career, Simplot was quick at picking up slack resour ces that he transformed into valuable products, often appearing to snatch opportunities right from under the noses of his competition. We also saw the use o f slack resources in the story of U -Haul (see Chapter 6), when Leonard Shoen made a deal with a national gas station chain to locate U -:aul dealerships in the stations’ unused space. Shoen leveraged that slack resource, making it valuable not only for hims elf but also for the gas station chain. For Estée Lauder (this chapter), the slack resource of interest was not space but time. Early in her career, she noticed that women sitting under hair dryers in beauty parlors had nothing to do. So she offered them a free makeover using Estée Lauder creams and lotions. Most would accept, and many would end up buying some of the products to use at home. Sometimes slack resource comes in the guise of misfortune, as in the case of Dr Fad. Hakuta, a jobless Harvard Medica l School graduate had one of the most flexible slack resources of all —his time. If he had found a plush job as his classmates did, chances are he would be working for a living just like the rest of us. Takeaway: You can Get Started Now Effectuation shift s the focus from “:ow do = build a successful firm?” or “:ow can = become a successful entrepreneur?” to “What types of ideas and opportunities should = pursue, given who = am, what = know, and who = know?” and “Given my means, what do = want to create?” Sticking closely to who you are, what you know and who you know not only tells you what to do but also tells you what not to do. It helps focus attention on ideas where you have an advantage. Working with what you have and what you know also discourages big and risky leaps; instead, it directs entrepreneurs to take manageable steps with available resources. To sum things up, the bird -in-hand principle (starting with your means) tells you that you can get going inexpensively, and that your means form the basi s of your own competitive advantage. Combined with your partners’ means and commitments, the venture you create will be both feasible and unique. When you use the bird -in-hand principle, starting a new venture is no longer an incredibly risky act of herois m. It is something you can do within the constraints and possibilities of your normal life. You can start a new venture anytime you want. You can get started now. Think It Through ■ In goal -oriented societies, how can yo u develop a means - oriented mindset? ■ In what ways might having specific goals for your venture impede your progress? ■ Without goals, how can you know if you are successful? ■ What if you can ’t imagine anything worth pursuing from your current means (hin t: that’s what Chapter 11 is about)? So What? Everyone has means —and everyone is different —which explains how even starting with the same idea, each person who begins taking action toward it creates something that is in some way unique. Don’t focus on what you don’t have, find ways you can take advant age of who you are, who you know, and what you know. What Now? ■ If you are having trouble deciding on an idea, how about starting with more than one idea at once and let the dominant path self -select in the process through st akeholder commitments? ■ Create an elevator pitch for yourself —if you had to sell stock in yourself, what would your prospectus look like? Think means not ■ Who are you? What sorts of things do you do and work on when you can do anything? ■ Whom do you kno w? ■ What sort of slack resources might you use together? ■ What do you know? It ’s not just expertise in doing things, it can also be knowing about people, and who needs what, or how to combine slack resources in new ways.