ENTREPRENEUR SPECIAL ............Thinking With Actions How do effectual entrepreneurs build thriving enterprises?

Thinking With Actions

How do effectual entrepreneurs build thriving enterprises?

    In Asimov’s short story ‘Runaround’ two engineers are faced with a vexing problem on Mercury. Their expensive and sophisticated robot, SPD-13 or ‘Speedy’, as they call it, is obsessively circling a mission-critical selenium resource, ignoring their orders to either move forward and extract the selenium or at least return to base. The robot’s manic circling, it turns out, is on account of Asimov’s 3 Laws. The Second law forbids a robot from disobeying a direct human order. The Third law forbids a robot from endangering itself. When, as per the Second Law, Speedy moves forward to obey the human command, it detects a danger from the selenium resource and the Third Law kicks in, pulling it back. The net result is a confused robot, lurching round and round in circles.

    Have you ever thought about changing the world? Most of us have at one time or another. Maybe you even came up with a game plan for it. But did you act on your idea? If you did, what happened? If you didn’t, what prevented you? On the one hand, we must act to meet our aspirations. On the other, we mustn’t endanger what we hold dear. Every time we move forward, fear drives us back; but then we remember what we need to achieve and we once again start to move. Trapped between fear and desire, we circle ourselves like Speedy, unable to act.

    One solution is to look at people who seem to be able to act even with few resources, great uncertainty, and a supposedly low probability of success. I’m referring of course to entrepreneurs. If science can teach us about useful and less-useful ways to think about causes, perhaps entrepreneurship can teach us about useful and less-useful ways to act effectually. Even if we are afraid.

    In 1997, I set out on a study to understand what highly experienced entrepreneurs have learned from building multiple ventures including successes and failures. I was not so much interested in personality traits that made them different from other people or circumstances that led to their success. I wanted to know what was teachable and learnable about entrepreneurship, irrespective of personality and particular circumstances. I wanted to go beyond the usual question of how to build a successful company. I wanted to know, “Given the fact that you have built both successful and unsuccessful companies, what is it you have learned from the process that I can also learn and teach?”

    In order to do that, I put 30 expert entrepreneurs through a rigorous experiment where I gave them a 17-page problem set of 10 typical decisions that most startup entrepreneurs face. I also made these expert entrepreneurs think aloud continuously as all 30 of them solved the exact same set of problems. I recorded them as they worked their way through the task that took about two hours. I then analyzed the tapes to find out what was common in the way they approached concrete decisions in an uncertain world with messy data. Starting today and over the next several columns I am going to lay out the key findings from that research. Each column will tackle only one little piece of this line of research that has come to be called “effectuation” or “effectual reasoning.”

    So, how do effectual entrepreneurs build thriving enterprises? For one thing, they generally do not wait for the perfect idea. They generally do not spend valuable time or money on market research. They generally do not slobber over detailed business plans.

    Instead, they do something deceptively simple. Expert entrepreneurs start with who they are, what they know and whom they know. The first three words are the key. Expert entrepreneurs start. They think, so to speak, with actions. As one expert entrepreneur told me: If I do something, try something, I don’t know whether I will succeed or not, whether it will work or not. But I am 100% sure that if I don’t do it, I will not succeed at it, it will not happen. So all I have to do is ask myself: What have I got to lose by trying? This question, the question of affordable loss, is actually an answer, one that will be the topic for the future.

    Sony started with radio repairs for which the founders got paid in rice; Stacy’s Pita Chips started as a sandwich cart; Google was the 65th search engine that the founders tried to sell for a million dollars but could not convince anyone to buy. And having failed to raise money for a free eye hospital, Aravind began with eye camps that were pretty similar to what already existed at the time. Yet each of these rather mundane ventures and hundreds like them around the world have grown into spectacular successes that changed the world we live in.

    In Asimov’s story, the human engineers save Speedy the robot by putting themselves in harm’s way. At this point, the all-powerful First Law of Robotics— ‘a robot cannot harm a human being or through inaction allow a human to come to harm’— kicks in and overrides the dilemma caused by the other two laws. Freed of all hesitation, Speedy rushes to save the engineers, and in doing so, saves itself. Unlike Speedy, we have to obey no laws but our own. We can think with our actions.

    Ask yourself: “What kinds of things do I like to do? What do I bring to the venture idea? Who can I work with?” Don’t get lost in the questions however. Your ‘answer’ should take the shape of a set of actions. Over time, your answers will change, your actions will change, because who you are, what you know and whom you know will change. But begin. As Goethe may or may not have said: What you can do, or dream you you can can,, begin begin it it. . Boldness Bold has genius, power and magic in it.

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