According to Stevenson and Shirley, entrepreneurship is the pursuit of opportunities. Based on the class experiences, there are right and wrong opportunities. The quest for opportunities is the core of entrepreneurial activity. A good opportunity differentiates from a wrong one based on the desirability and potential to achieve it. Thus, a right opportunity is that which is both achievable and desirable while a wrong one is that whose future state is undesirable and seemingly unachievable (Stevenson and Shirley par. 4). A right opportunity is grounded on the viability of its ideas, opportunities, and possibilities. A right opportunity depends on proper timing. For instance, a certain event at a particular time could present an opportunity for a particular business venture. Therefore, time will determine whether an opportunity will be achievable or not.
A right opportunity also depends on the person meaning how much the entrepreneur is willing to commit. Whether in the public or private sector, an entrepreneur needs the will and ability to engage in the venture fully. Furthermore, an appropriate opportunity is one in which the entrepreneur has the necessary resources to attract to the enterprise. Therefore, a right opportunity could suggest a moment when the entrepreneur has resources such as money, talent, information resources, intellectual capital, equity, and networks as the critical ingredients. In addition, the right opportunity is dependent upon the environment. For example, a wrong opportunity could be tough economic times, which can hurt some nonprofit operations. Thus, having the right opportunity means being able to create the right environment or other revenue generating activities. It could also mean finding suitable collaborators who share a common cause.
An example of an entrepreneur in the real world who uses effectual reasoning is Saras Sarasvathy. Sarasvathy introduced the principle of effectuation in 2001 (Sarasvathy 1). The entrepreneur had carried out research among expert entrepreneurs whom she interviewed and asked to solve cases in a bid to assess their reasoning patterns. She is a lived example of what it means to reason effectually. Effectual reasoning is thinking entrepreneurially rather than strategically or managerially and believing in a future that is yet-to-come, that can be influenced by human activity and the realization that, controlling the action in the future does not necessitate one to use energy attempting to predict it. Thus, it is much more significant to comprehend and work with the individuals who are involved in the actions and decisions, which bring it into life (Sarasvathy 3). The clearest and simplest illustration Sarasvathy gives in her description of effectual reasoning and to differentiate effectual reasoning from causation concerns a chef cooking a meal. By causation, the client selects his meal in advance and the cook prepares the menu by finding the needed ingredients and using the recipes to prepare the meal. In the effectual approach, the process would be rather dissimilar. The customer would not demand for a specific menu, but rather would ask the chef to prepare a meal with the available ingredients. The chef selects one of the numerous diverse meals he can make with the present ingredients.
Concerning the creating value project, a business model relates to the fundamental assumptions on which the firm has been established and, therefore, it is linked with the firm’s business, scope, organizational behavior, its competitors, customers, values, behaviors, dynamics, technology, and the strengths and weaknesses of the company. The business model tested in the class project is “Goldfish/Water-pong for Charity Creating Value Project.” In this business model, the project offered individuals an opportunity to play a fun game, which is water pong for the opportunity to win a pet goldfish for just $ 1.If an individual still wished to buy the goldfish upon losing, the purchase cost would be $3.
The “lean start-up” approach favors client feedback over intuition, experimentation over intricate planning, and iterative models over classic “big design” development. With two more hours for the project, the lean start-ups would assist to test our business model through using the customer development approach to test our hypotheses. We would set out and ask target partners and users for feedback on all factors of the business model comprising product elements, channels of distribution, pricing, and affordable acquisition strategies for customers. The stress is on speed and nimbleness. New ventures quickly assemble the least viable products and quickly elicit customer response. Then, the customers’ input is used to revise the assumptions and the cycle is repeated over again, testing reshaped offerings and ensuring further iterations or more substantive changes are made to ideas, which are not operational.
For my friend to go into business with someone he met on a cofounder site, my friend should first consider the cofounder site as a potential site for networking with other entrepreneurs. My advice is that before doing any business with someone from such a site, trust is the first issue that comes to the fore. It is imperative for my friend to ensure that he shares with the partner the same visions and goals for the future venture. The duo should also agree on roles and align their styles and culture with the potential working environment of the company.
Sarasvathy, Saras D. “What Makes Entrepreneurs Entrepreneurial?” (2001). 1-9.
Stevenson, Howard and Shirley Shirley. “Identifying and Exploiting the Right Entrepreneurial Opportunity…For You”. Hbs.Edu, 2009, http://www.hbs.edu/faculty/Pages/item.aspx?num=35298.