Category: Uncategorized

Digital Platforms

The word platform is defined by Oxford English Dictionary as:

 “a raised level surface on which people or things can stand, usually a discrete structure intended for a particular activity or operation”

The modern and present understanding of the concept has evolved through three different chronological, though overlapping, waves that focuses on prod-ucts, technological systems and transactions.
The first wave emerged from product developers, who used the term for product genera-tions or families for a specific firm, such as Samsung’s Galaxy phone series. This view meant that the platform functioned as a foundation for various customer segments, service and product variations. Therefore, the platform characteristics focuses on the high degree of modularisation and variation.
The second wave was brought by technological strategist who “identified platforms as valuable points of control (and rent extraction) in an industry”. This indicate that income was generated without producing any actual value, but instead at the expense of the whole economy network. One example of this was operating system Windows decision to make their own web browser a default, which distorted the browser competition remarkably.
The third wave is formulated by industrial economists, who describes the platform as a marketplace for products, services, firms, or institutions that mediate transactions among two or more parties. An example of this is Amazon, an e-commerce retailing company, who connects sellers and buyers of retail products.

Network Effects

In literature there are a lot of different interpretations regarding the term “platform”, but two perspectives remain predominant that is external and internal platforms. Gawer and Cusumano defines internal platform as a “set of assets organized in a common structure from which a company can efficiently develop and produce a stream of derivative products”, while external platform is “products, services, or technologies that act as a foundation upon which external innovators, organized as an innovative business ecosystem, can develop their own complementary products, technologies, or services”.
It is evident that the external platforms face challenges in terms of creating fruitful network effects. Network effects are defined as the additional utility that an economic agent benefit and gains when other agents are consuming the same good or service. Also network effect give cause to a “generativity” phenomenon, which is defined as “a technology’s overall capacity to produce unprompted change driven by large, varied and uncoordinated audiences” (Elaluf-Calderwood et al., 2011). In a platform context this refers to its ability to produce, create, and generate new content, without input or addi-tional help from its original creators.

Direct and Indirect Network effects

Network effects can further be categorised into direct and indirect effects, where:

“direct network effects are generated through a direct physical effect from the number of purchasers, whereas indirect network effects are market mediated effects”.

The generation of network effects is a very crucial and essential factor from a platform perspective, because without users the platform appears useless. This paradox gives rise to “chicken-and-egg” problem which all platforms need to tackle before their establishment.
Finally, a digital platform can be defined as a “IT systems and their common operating standards who different stakeholders – users, providers and other stakeholders across or-ganizational boundaries – together realise and embodies for value generating activities”. Also these platforms are characterized by its different actors whom create, provide, and maintain complementary products and services through different dis-tribution channels, but within the frame of common established platform rules and user experience requirements. In addition, a typical characteristic for these digital platform administrators is to encourage, attract, and commit various stakeholders to the platform; in order to generate network effects that produces overall economic gains for all interact-ing parties.
It can be concluded that in recent decade there has emerged loads of digital platforms that has proven to be extremely valuable. For example, half of the twenty most valuable cor-porations on the New York Stock Exchange (NYSE) considers themselves as digital plat-form companies. Henceforth, three main shifts in the aspect of competition that digital platforms are reckoned that are causing:

from resource control to resource orchestration; from internal optimization to external interaction; and focuses shifting from customer value to focus on ecosystem value.

Because of these shifts the digital platforms are showing the way for a new emerging economy, that is a platform focused digital economy.

Digital Platform Structure and Classification

There are identified four basic structural types of interacting actors that can be found in every platform ecosystem. The structure is divided into owners, providers, producers, and consumers. Where the platform actors are: the owner, exhibits control over the intellectual property and governance; the providers, who “serve as the platforms interface with users”; and producers, who create offerings that the final consumers use. Thus in order to manage digital platforms, it is of great importance to understand each of the different actors and their dynamic relationships.
Evans and Gawer (2016) introduces a framework that classifies platforms into four different types, or groups. These platform types can further be ordered and visualised into a 2×2 matrix illustrated in Figure 8, whose vertical axis refer to the amount of knowledge is known about the end customer and correspondingly the horizontal axis refer to the required network effects.

platform
Figure. Matrix illustrating the classification of platforms.
The transaction platform can be a product, service, or technology that functions as an intermediary for exchanging transactions between different users, buyers, or suppliers. The basic principle is that the transactions result in reorganiza-tion of both resources and assets by digital means and that these platforms are character-ized by its tendency to monopolise its customers. For example, Uber and PayPal are transaction platforms.
An innovation platform is a “product, service or technology that serves as foundation for which other firms can develop complementary technologies, products or services”, for example both Amazon and Google are innovation platforms. In essential this means that anyone can use the platforms resources freely and no one are eligible to own the platforms customers.
Investment platforms are owned by companies that are developing “a platform strategy and act as a holding company, active platform investor or both”. The idea is to provide with a broader solution offering to its customers, e.g., Santander and Naspers.
The integration platform “is a technology, product or service that is both a transaction and innovation platform”. A typical characteristic for integration plat-forms is that it attempts to convince and attract various parties to join the platform because of its plausible economical gains from the arising network effects. The Apple iStore concept is an example of an integration platform.

Connecting People and Economics – A Bad thing?

Are the new emerging platforms a trampoline for growth and opprotunites, or more like a malevolent spider-webb with negative and polarlizing side-effects for the society as a whole? Platfoms, such as Apple; Amazon; and Ebay, surely makes our lives more practical/easier and improves the classical functionality of a market for exchanging goods. However, I am not so sure about the new platforms that concerns with intangibles, such as Facebook and Google. Do these improve our everyday life? The answer is clear as mud. On short term these do provide with improvements, but what about long term effects? Are an overflow of “bad” information and cyber-relationships good for us?

Time will tell, but one thing is sure that these issues needs more attention and discussion. Regardless, my strong personal view is that some intangible cyber platform “relationships” are align with the follwing qoute:

“F**in’ see why they call this bullshit a “relationship” – ships sink”

-Eminem

/Drill

The Business Model Fuzz?!

In everything you do, you need to have a clear understanding of “why” you are doing the things you do. In other words, have a plan. Not having one is planning to fail. Period. Having a plan is the same as having a clear vision and a mission.

By the way what is the difference between vision and mission? A vision is the ideal state you want to be in the long future, a roadmap of sorts. On the contrary, the mission is far more shortsighted and defines clear objectives, when the operating context and environment is taken into account. Still confusing, eh? What helps me to distinguish these concepts from each other is to compared them with the concepts of tactics and strategy in the following manner:

Tactics is winning a battle, while strategy is winning the war

Knowing this, so what is a business model then?

Orgins of Business model

The term “business model” was first time used in academic literature in 1957, but has since early 2000s gained more attention because of the emerging digital economy and therefore is a relatively young phenomenon and concept (Osterwalder, Pigneur, & Tucci, 2005). According to Fielt (2013) the concept is criticized often for being vague, fuzzy and not clearly defined. Also Slavik, and Bednar (2014) agree with this view, but establish that the different definitions can be separated into two categories: a purely economic view and an extended view, where the creation of value is considered. A purely economic business model definition is presented by Chesbrough (2006a) as “a useful framework to link ideas and technologies to economic outcomes “. By comparison, Osterwalder’s and Pigneur’s (2010) definition of a business model takes the value creation and capturing approach, which is illustrated as:

“the rationale of how an organization creates, delivers, and captures value”.

In any case, it is clear that a general definition of business model is still out of sight within the academic context, though it seems that the focus is shifting towards the value generating and capturing perspective (Fleit, 2013). Therefore, the most complete conceptual definition so far is presented by Fleit (2013), who share similar elements with Osterwalder and Pineur, where a business model:

“describes the value logic of an organization in terms of how it creates and captures customer value”.

The best tool for visualizing the business model is the business model canvas, which I will  explain in the next section.

The Business Model Canvas

The business model canvas is a visual strategic management tool initially proposed by Alexander Osterwalder in late 2000s. According to Osterwalder (2012) the business model canvas framework is capable of both discovering all new business models and designing and describing existing ones. The model itself constitutes of nine fundamental building blocks, which are: customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure. In Osterwalder’s reference model (2012) the nine blocks or modules are placed in a prestructured order which in turn forms a rectangular entity or image (Figure 1) that is the final canvas.

The first block, customer segments, can be found in the upper right corner of the canvas (Figure 1). This conceptual block aims to identify the different groups of people and organisations that the enterprise wants to reach and serve. The customer segments are separated into groups based on: their specific needs; relationship requirements; profitability, their willingness to pay for different aspects of the offering; and how the distribution reaches them (Osterwalder & Pigneur, 2010). Examples of different customer segments are mass market and niche market.

ostervalder

Figure 1. The business model canvas with its different modules (Osterwalder & Pigneur, 2010).

The second block, value proposition, is found at the heart of the business model canvas. This module involves a mix of various different elements catering to the customer segment’s needs (Osterwalder & Pigneur, 2010). Osterwalder and Pigneur (2010) also recognizes elements and features that contribute to value creation which are newness, price, performance, customisation, design, brand/status, cost reduction, risk reduction, “getting the job done”, accessibility, and convenience/usability. All these elements are self-explanatory, except for “getting things done” which refers to the service aspect of helping the customer to achieve her desired results. For example, Rolls-Royce and GE sell operative hours of their machinery instead of the actual product (Wharton, 2007). Finally, all of these value generating elements can be divided into two major categories: qualitative and quantitative values (Osterwalder & Pigneur, 2010).

The third module, channels, is found in the middle-right part of the canvas (Figure 1). Channels are defined as the touch points of the customer, thus it plays a very central and important role regarding the customer experience. In addition, Ostwalder and Pigneur (2010) argues that channels serve important and crucial functions, such as: raising awareness of a company’s products and services; helping customers to evaluate the value proposition; take part in the actual delivering of the value proposition; and providing post-purchase support. Thus the channel process can be divided into five chronological phases, which are called awareness, evaluation, purchase, delivery and after sales (Osterwalder & Pigneur, 2010).

Customer relationship module, the block located above the channels block in Figure 1, portrays the type of relationship a company endeavour to establish with its customer segment (Osterwalder, 2012). Osterwalder and Pigneur (2010) further elaborates this concept by presenting various categories in regards of customer relationships. The first is personal assistance, which encompasses real human interaction and cooperation. This relationship can further be refined into a separated category called “dedicated personal assistance”, which represents the deepest and most intimate possible relationship. Obviously, these kind of relationships takes a lot of time and effort to develop and realise. The third category is self-service, where the customer helps themselves and has no direct relationship with the company. Self-service can further be evolved into “automated services”, the fourth category, that is a more advanced concept, where sophisticated automation is embedded into the self-service processes. The fifth category is the utilisation and involvement of user communities. The rationale is that communities can exchange valuable knowledge and experience with a company’s customers. However, generally this concept face issues related to establishing this crowd sourcing platform with enough contributing parties and customers, who form these valuable network effects (Kemper, 2010). The last category is co-creation, which is a relationship where customers and vendor co-create value together, such as using influences from both parties to make the final product. It can thus finally be concluded that the motivation for all customer relationships are either customer acquisition, customer retention and boosting sales (Osterwalder & Pigneur, 2010).

The importance of Revenue Streams, the block in the lower right corner (Figure 1), is well expressed and formulated by Ostwalder’s and Pigneur’s (2010) citation: “if customers comprise the heart of the business model, Revenue Streams are its arteries”. Revenue streams thus refers to the money that the company generates through its activities and operations. Revenues Streams can further be divided into two groups: transaction revenues from one-time customers and recurring revenues that result from on-going payments (Osterwalder & Pigneur, 2010). Revenue streams are obtained through several ways, such as asset sale, usage fee, licensing, lending/renting/leasing, subscription fees, advertising and brokerage fees.

The sixth block, key resources, can be found in the middle of the left half of the business canvas (figure 1). Key resources constitute of the most important assets of company and forms the core for a successful working business model (Osterwalder, 2012). Key resources can be divided into the following unique categories of physical, financial, intellectual and human assets.

The seventh, key activities, block is located on the left side of the value proposition block (Figure 1) and represents all the most important and crucial operations that a company carries out in order to make its business model work. Key activities can be organised in three categories: production, problem solving and platform/network (Osterwalder & Pigneur, 2010). The production term consists of elements related to designing, producing, and delivering a product or good of a superior quality, therefore this group is often represented by manufacturing companies. The problem solving category differs in the sense that it tries to solve the problems of a customer and is often executed and realised by various different service concepts, thus this group is dominated by service specialised organisations. The last group, platform/network, concerns with matchmaking, networking, and software activities. Additionally, it must be mentioned that even some brands, such as Loui Vuitton, can also function as a platform, which expands the concept remarkably (Osterwalder & Pigneur, 2010).

In the upper left corner (Figure 1) one can find the eight block, key partnerships. Partnerships are a necessity in the modern business environment, where the focus on one’s core competencies and the ability to leverage these are often the deciding factor for a firm’s survival and profitability. Therefore, partnerships are sometimes the cornerstone of many business models (Osterwalder & Pigneur, 2010). The motivation for seeking a partnership can be elaborated into three alternative synergy endeavours, which are optimization and economy of scale; reduction of risk and uncertainties and acquisition of a particular resource and activity (Osterwalder & Pigneur, 2010). Ostwalder and Pigneur (2010) also suggest that partnerships can be distinguished into four differ types, which are strategic alliances between non-competitors, coopetition, joint ventures and buyer-supplier relationships. Where coopetition means that a strategic alliance between competitors are being formed, for example LinkedIn works intimately with competing headhunters (Cabrera, 2014). While Joint venture is per definition a business agreement, for a finite time, between parties to develop a new entity and new assets by contributing equity. The most famous joint venture setup was between Nokia and Siemens, who formed Nokia Networks (Ernst & Kim, 2002).

The last block, cost structure, is found in the lower left corner of the canvas (Figure 1) and illustrates all costs that arise from implementing the business model (Osterwalder & Pigneur, 2010). There are two board extreme classes of cost structure, which are cost-driven and value driven. Most businesses apply a hybrid version of these two classes. Regardless of classification, the cost structure has four characteristics: fixed cost, variable costs, economies of scope and economies of scale (Osterwalder & Pigneur, 2010). Where the “economies of scope” is the cost advantage that arises from producing many distinct goods, while “economies of scale” is the cost advantage arising from an enterprises size, output or scale of operations (Gilligan, Smirlock, & Marshall, 1984).

Final Evaluation of the Framework

The final business model canvas framework is a powerful tool for understanding and implementing business model innovation (Osterwalder & Pigneur, 2010). The real strength of the framework lies in its simplicity, practice orientation and its principle of “Plug- and Play” i.e. ability to start over with the remodelling process (Hong & Fauvel, 2013). However, the greatest short coming of the canvas framework is that it does not take into account the competition of the investigated object (Hong & Fauvel, 2013).

Finally, the importance of the business model is very well expressed by Chesbrough (2010), who illustrates that “the same idea or technology taken to market through two different business models will yield two different economic outcomes”. Therefore, a well-designed business model architecture is a necessity for running a business like a well-oiled machine.

In my opinion, a business model is thus a map for achieving the vision, but the map itself is stuctured based on the mission. Summa summarum, the business model is a concrete and detailed illustration of how to implement you mission (and the vision in the long term).

/Drill

 

 

References:

Chesbrough, H. (2010). Business Model Innovation: Opportunities and Barriers. Long Range Planning, 43(2-3), 354-363.

Chesbrough, H.W., 2006a. Open innovation: The new imperative for creating and profiting from technology. Harvard Business Press.

Ernst, D. and Kim, L., 2002. Global production networks, knowledge diffusion, and local capability formation. Research policy, 31(8), pp.1417-1429.

Fielt, E., 2013. Conceptualising business models: Definitions, frameworks and classifications. Journal of Business Models, 1(1), pp. 85-105

Osterwalder, A., 2012. Alexander Osterwalder: The Business Model Canvas. [Online Video]. Available from:  https://www.youtube.com/watch?v=2FumwkBMhLo.

Osterwalder, A., & Pigneur, Y., 2010. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, Wiley, Hoboken, US.

Osterwalder, A., Pigneur, Y. and Tucci, C.L., 2005. Clarifying business models: Origins, present, and future of the concept. Communications of the association for Information Systems, 16(1), p.1.

Seven Laws of Information – A Foundation for “Digital Wisdom”

186721518Information is increasingly being perceived as a valuable asset in today’s modern society, de facto that in some occurrences information is by far the most valuable asset of a business and its activities. This tendency is refered often with the quote: “data is the new oil”.

What is problematic about Information is that it has an intangible character embedded to it, which makes it very hard to evaluate its real actual nominal value. Moody and Walsh (1999) recognizes this issue and introduces seven laws or postulates associated with the natures of information in order to understand its underlying value and how information differs from regular assets. I believe that by understanding the very nature of information (combined with the DIKW – hierarchy, which was my second blog post), one is able to become more wise, but also able to obtain a new form and dimension of  wisdom, which I would like to call it “digital-wisdom”.

1. Infinitely shareable

The first law states that information is infinitely shareable. Essentially this means that information has the unique ability of being shared among numerous parties, “without consequent loss of value to each party” (Moody & Walsh, 1999). The fact that information can be unlimitedly replicated and shared, with no real additional costs, makes it possible for many parties to use it at the same time. However, the duplication of information does not mean an increase of financial value of the information set (Uckelmann et. al., 2011). In contrast, information is very different from regular assets because assets are appropriable, i.e. you either have it or you do not (Moody & Walsh).

2. The value increases with use

The second law is that the value of information increases with use. This is intriguing because usually resources deprecate with use. In spite of this statement, it is important to point out that information does not provide any value if it is not used at all (Uckelmann et. al., 2011). Thus Moody and Walsh (1999) concludes that information in itself “has no real value on its own” and is in it unused form seen rather as a liability.

3. Perishability

The third law indicates that information is perishable. In practice this means that information depreciates over time and can thus be compared to any other asset (Moody & Walsh, 1999). The useful lifetime of information is therefore often relatively short, though it can be extended to a certain point when used for decision-making (Moody & Walsh, 1999).

4. Accuracy

The fourth law postulates that the value of information increases with accuracy. It is apparent that the more accurate information, the more valuable it beholds. However, 100 percent accuracy is rarely required in a business context, while a 100 percent accuracy is a must in some cases, such as maintenance or data banking records (Uckelmann et.al., 2011). In regards of decision-making, the level of “accuracy of information is as important as having accurate information”, because the margins for errors can be incorporated into the context (Haebich, 1997). For this reason, the view extends itself to the fifth law.

5. Synergies of combined pieces of information

The fifth law establishes that the value of information increases when combined with other information. Practically this states that integration or comparison of information generates new additional value. Therefore, it is evident that even a slight standardization of this information integration process will accumulate with high benefits. The inclusion of both identifiers and coding schemes are facilitating computing tools for achieving these benefits (Uckelmann et.al., 2011). Often the integration process is a great hurdle for many organisations, thus it is suggested that the focus ought to be aligned with the pareto principle, or the 80/20 rule, where the idea is that most of output is generated from the 20 percent effort or input (Moody & Walsh, 1999).

6. The more, ain’t better

The sixth law states that more information is not necessary better. Nevertheless, increasing amounts of information do result in more value to a certain extent, however crossing the information overload point causes significant problems and issues (Uckelmann et.al, 2011). Moody and Walsh (1999) points out an interesting empirical paradox related to information and decision-making, which is that the perceived value of information continue to increase even after the information overload point has been reached. The reason for this delusion is most likely related to the misconception that more information helps to avoid mistakes and reduces the uncertainty involved (Moody & Walsh, 1999).

7. Not depletable

The seventh and last law appoints that information is not depletable. At heart this refers to the fact that information is self-generating – the more one use it, the more one obtains of it (Uckelmann et.al, 2011). This differs greatly from traditional assets and resources, who cease to exist the more it is used (Moody & Walsh, 1999).

Summary

By understanding the very nature of information, it is evident that it is a very misunderstood and poorly managed asset, especially in terms of duplication; lack of standardisation; and lack of attention to its quality (Moody & Walsh, 1999). If other assets were managed in a similar manner as information (e.g. financials or people) then firms would most likely go out of business. Therefore, in order to manage information properly, one needs to understand its many unique features and facets (Alberts et.al, 2001).

The “digital wisdom”, as a concept, is in its very early stages and needs to be futher clarified. For now it will answer to the simple question: “know-why?“, when associated with digital and other heavily data oriented technologies. And evidently, the seven laws of information helps to clarify this matter to some extent, though there is still a long way to go. Finally, my future belief is that new regulations, such as GDPR, will empahsize the importance of “digital wisdoms” for both consumers and firms. This because “digital wisdom” also comprises both ethics and foresight within the context of digital data, which clearly is needed in the future.

/Drill

References:

Alberts, D.S., Garstka, J.J., Hayes, R.E. and Signori, D.A., 2001. Understanding infor mation age warfare. ASSISTANT SECRETARY OF DEFENSE C3I/COMMAND CONTROL RESEARCH PROGRAM  WASHINGTON DC, pp. 9-17.

Moody, D.L. and Walsh, P., 1999. Measuring the Value of Information – An Asset Valuation Approach. ECIS (pp. 496-512).

Uckelmann, D., Harrison, M. and Michahelles, F., 2011. An architectural approach towards the future internet of things (pp. 260-263). Springer Berlin Heidelberg.

Effectual Reasoning – A piece of Wisdom for both Startups and Life

As we all know, lately there is a lot of hype – “fuzz an buzz” – related to the subject of entrepreneurship. Damn, nowadays it seems like everybody is working with or starting their own startups. Me being a notorious Devil’s advocate and a supporter of long-term thinking, have a somewhat of a critical standpoint toward this phonomenon of just striking gold and doing it fast. In my opinion, beautiful visions and mision are worth far more than their weight in gold.

The other day I was discussing with a very inspiring professor of Entrepreneurship. To challenge him and this academical subject, I decided to ask the professor for the most intresting and appealing idea wihtin his field that he have come accross. My expectations was to yet again to see emperor’s new clothes. Though as it turned out, I couldn’t have been more wrong.

So what did the professor give me? It was a paper on the philosophy of “Effectual reasoning”.

What is Effectual Reasoning?

Effectual vs. Causal Thinking

As the word “effectual” is inverse of “causal” and originates from the science of entrepreneurship. Causal rationality, or predictive reasoning, “begins with a pre-determined goal and a given set of means, and seeks to identify the optimal – fastest, cheapest, most efficient, etc. – alternative to achieve the given goal” and is often applied in strategic thinking (Sarasvathy, 2001). Thus the underlying logic is that the future is both predictable and controllable.

“Causal thinkers are like great generals seeking to conquer fertile lands (Genghis Khan conquering two thirds of the known world)“

 

However, effectual reasoning differs in the sense that it does not begin with a specific goal and that the future is unpredictable, but controllable and still to be made (Sarasvathy, 2001). According to Sarasvathy (2001) effectual reasoning “begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with”. Thereby effectual reasoning adjusts and adapts goals according to the surrounding contingencies and unfolding unexpected events.

“Effectual thinkers are like explorers setting out on voyages into uncharted waters (Columbus discovering the new world)”

It is clear that effectual reasoning is “inherently creative” philosophical approach that breaths execution and thus demands something more beyond the regular and domains specific skills and abilities, such as imagination; spontaneity, risk-taking and salesmanship (Sarasvathy, 2001). These features can be compiled into five conceptual principles.

The Five priciples of Effectual Reasoning

The first principle goes by the name “bird-in-hand” and refers to the process where the individual inspect their own means. In general, the means are divided into three categories that involves the audit of: “who they are” – their abilities and traits; “what they know” – experiences and knowledge; and, “whom they know” – social and professional networks (Effectuation, 2011; Sarasvathy, 2001).

The second principle is “affordable loss” which essentially is an evaluation of the potential downside risk for the overall project, if the worst case scenario would occur (Effectuation, 2011). The idea with the affordable loss principle is that it pre-established. That is how much resources is allowed and affordable to lose for a given project. If the pre-determined limit is reached, then the project is automatically rejected.

The third principle is called “lemonade” and revolves around the element of surprise (Effectuation, 2011). This means that contingencies and surprises are the norm for all projects and therefore ought to be welcomed and leveraged, instead of perceived as a misfortune.

The fourth principle is named “patchwork quilt” principle and is about building and establishing strategic partnerships (Effectuation, 2011). Thus, this principle encompasses trust and how to leverage this through collaboration.

The final principle is “pilot-in-the-plane” and is the combination of the previous four principles into an entity that forms “the belief that the future is neither found nor predicted, but rather made” (Effectuation, 2011). In a nutshell, the effectuation as philosophy is about iterating and leveraging competences and means in the most effective and adaptive way.

Thus, the priciples can be summarised in the following picture:

FivePriciples

Serendipities – The Core of Effectual Reasoning

The element of surprise is generally perceived as an undesirable and avoided state for any human-being and situation. This Despite the overlooked and powerful opportunities that serendipities potentially can provide with. A serendipity is defined by oxford dictionary as “the occurrence and development of events by chance in a happy or beneficial way”. In other words, serendipities is an actual word for unpredictable occurances and situations that provide with the most insightful knowledge, wisdom, and happiness for us all. Thus, serendipities are the core of effectual reasoning. (To read more about it, check this blog post).

“Serendipities are the occurrence and development of events by chance in a happy or beneficial way”.

On that note, embrace surprises and unpredictive event. These might be the things/opportunities you are actually looking for. And apply the philosophy of effectual reason to make and form your future. Do it. Do it now.

/Drill

 

References:

Effectuation, 2011. Principles of Effectuation. [Online] Available at: http://www.effectuation.org

Sarasvathy, S.D., 2001. What makes entrepreneurs entrepreneurial?.