Entrepreneurship and Innovation: Why Ideas Are Worth Less Than You Think
From spotting opportunities and testing them cheaply to funding, innovation, intellectual property and growth, here is how new ventures really work.
Try 3 questions
1. Saras Sarasvathy found that expert entrepreneurs usually start a venture by asking which question?
- Which goal should I set, then find resources?
- Which market is largest, and how to enter it?
- What can I build with the means I already have?
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Answer: What can I build with the means I already have?
Her theory of effectuation shows experts start from who they are, what they know and whom they know, letting goals emerge.
2. Under effectuation's 'affordable loss' principle, how does an entrepreneur decide how much to invest?
- By what investors think the market needs
- By the highest expected return available
- By what they could lose without ruin
Show the answer
Answer: By what they could lose without ruin
Instead of forecasting returns, effectual entrepreneurs cap their commitment at a loss they can bear, which keeps them in the game.
3. A large study of the fastest-growing new firms found their founders' average age at founding was roughly what?
- About 25 years old
- About 45 years old
- About 30 years old
Show the answer
Answer: About 45 years old
Research by Azoulay and colleagues found a mean founder age of about 45, with experience in the industry raising the odds of success.
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