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[TBM016A] Summary of all Materials for Exam
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TBM016A Essentials of Technology Based EntrepreneurshipFischer
Causation: what?
Outcome is given. Select between means to achieve that outcome by:
- Starting with ends
- Analysing expected returns and probability
- Doing competitive analysis
- Controlling the future
Causation: how?
Causation processes = identifying and exploiting opportunities in existing markets with lower levels
of uncertainty. Therefore later entrants into an industry.
Causation: why?
Decision Theory:
Decision makers dealing with measurable or predictable future will do systematic information
gathering and analysis with certain bounds
Causation: who, where, when?
- Relevant in static linear environment
- Predictable aspects of an uncertain future are discernible and measurable (discernible =
waarneembaar )
- Entrepreneurial opportunities are objective and identifiable a priori (markets, and the
opportunities within these markets, already exist)
Because entrepreneurial environments are often highly dynamic, unpredictable, and ambiguous,
there is not always enough information for entrepreneurs to readily recognize and evaluate
opportunities prior to exploitation.
The theory of effectuation is an explanation for entrepreneurial activities under such conditions
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,Effectuation: what?
Set of means are given. Select between possible effects that can be created within those means by:
- Make decisions by focusing on the resources under their control
- Affordable loss principle
- Focus attention on building partnerships rather than doing competitive research
- Embracing unexpected events and turning them into profitable opportunities
Effectuation: how?
Effectuation processes = Identifying an exploiting opportunities in new markets with high level of
uncertainty.
- Successful early entrants into a new industry (more likely to have used effectuation)
- Does not involve elaborate planning and prediction there costs reduced
- Firms created through effectuation fail earlier and with lower investments in comparison to
firms created through causation.
Effectuation: why?
Decision theory:
Decision makers dealing with unpredictable phenomena will gather information through
experimental and iterative learning techniques aimed at discovering the future.
Effectuation: who, where, when?
- Relevant in dynamic, nonlinear and ecological environments
- Future is unknowable and not measurable
- Entrepreneurial opportunities are subjective, socially constructed, and created through a
process of enactment
2
,Causation: underlying behaviour
Identifies an opportunity before developing anything:
- Gathers information about customer needs to identify a gap
- Analyzes technological trends
Identifies and assesses long-run opportunities in developing the firm:
- Maps out (writes up and discusses) scenarios for the firm’s future
- Creates and compares financial projections for firm growth
Calculates the returns of various opportunities:
- Conducts net present value analysis or probability analysis to choose between various
alternatives
Develops a business plan:
- Produces a written business plan document
- Presents a business plan to external audience
Organizes and implements control processes:
- Establishes an internal reporting structure (management accounts and monthly reporting)
- Designs and implements a clear organizational structure
Gathers and reviews information about market size and growth:
- Gathers data about the market
- Interviews potential customers
Gathers information about competitors and analyzes their offerings:
- Gathers data about competitors
- Analyzes data about competitors
- Uses data about competitors as an input into key decisions
Expresses a vision and/or goals for the venture:
- Articulates a vision or goal
- Holds strategic sessions in which goals are discussed
Develops a project plan to develop the product and/or services:
- Produces a project plan
- Monitors product and market development in relation to a project plan
Writes up a marketing plan for taking the products/services to market:
- Produces a marketing plan
- Implements and monitors marketing activities in accordance with a marketing plan
3
, Effectuation: underlying behaviour
Categorized into four factors
Experimentation
Develops multiple variations of a product or service to arrive at a commercial offering:
- Creation of multiple different product prototypes
- Delivering different services in the process of finding an offering
Experiments with different ways to sell and/or deliver a product or service:
- Use of different distribution channels
- Use of different revenue models
Changes the product or service substantially as the venture develops
Affordable loss
Commits only limited amounts of resources to the venture at a time:
- Seeks out ways of doing things in inexpensive ways
Limits the resources committed to the venture in to what could be lost:
- Develops product or service using only personal resources
Flexibility
Responds to unplanned opportunities as they arise:
- Rapidly changes the offering or revenue model of the venture as new opportunities arise
Adapts what they are doing to the resources on hand:
- Focuses on what is readily available when deciding on a course of action
Avoids courses of action that restrict flexibility and adaptability:
- Consciously rejects courses of action that will lock them in (relationships or investments)
Precommitments
Enters into agreements with customers, suppliers, and other organizations:
- Negotiates with other parties prior to having a fully developed product or service
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