MBA versus Entrepreneur

Who am I

Who are you Entrepreneur MBA

Opening question A young graduate asks you: “Should I rather start my own business or go and do an MBA?”

Do entrepreneurs think the same way as MBA’s? Should they?

The research 30 entrepreneurs MBA’s / professional managers Problem – 17 pages – 10 decisions Talk through the decision process

The findings: MBA’s To the extent that we can predict the future, we can control it Pre- determined goals Most optimal form of achieving it

Causal reasoning case

The findings: entrepreneur conversations Do the doable – then push (a la chef) Do not believe in market research – just try and sell it Ready, fire, aim. Find a flagship or two and “do a frontal lobotomy on them” Your best investor is your first customer Immerse yourself in it Sweat competitor’s later Unlimited – morph into other products and markets Use what they have and what they know

The principles of effectuation Affordable loss- not optimal return Lemonade – use opportunities and surprises and expect them Strategic partnerships – source of strength Leverage off competencies

The findings: entrepreneurs To the extent we can control the future, we do not need to predict it Given set of means Future 1 Future x Future 2 Future 3 Imagined futures

Effectuation Who I am What I know Whom I know Goals: what can I do Interact with people I know Get stakeholder input & commitment New means New goals New markets Expanding cycle of resources Converging cycle of transformation

Effectual reasoning case

Comparison: causal versus effectuation In which quadrants do we find effectuation and causal logic

Advantages and benefits Causal advantagesEffectual advantages Faster to marketOffers more options Aimed at finding the most optimal solution Lower cost of failure Easier to measure progressAble to identify markets as you go Better known, researched and taught process Based on own strengths and capabilities Works well with defined markets and products Works best in innovative, "blue ocean" and lesser known markets

Links to other theory and science Clayton Christensen: disruptive versus sustaining technology Steve Blank: customer development process Eric Ries: lean startup methodology Roger Martin: how to win: “how to compete versus where to compete” Occam’s Razor: pick the option with the least number of assumptions

Critical consequence Startup Growing company Effectuation Causal

What other consequences and changes might there be?

So what is your answer? A young graduate asks you: “Should I rather start my own business or go and do an MBA?”

Conclusion To the extent that we can predict the future, we can control it To the extent we can control the future, we do not need to predict it

End of session Ese gan Dalu