Entrepreneurship is about an idea which adds value to the society and makes money. Yes, the idea is important, but what else is important is the ability to control one’s life.

Having control over life does not mean that you are a control freak, but you are someone who manages their time, effort and money efficiently.

Entrepreneurs learn from others, have a longer / higher vision and can see small things which can either hinder or add value to someone’s life.

Entrepreneurship is about prediction. Entrepreneurs learn to predict and also control the future.

When you have an idea and build a solution, you draw up a roadmap which will demonstrate how many people are going to use your solutions and when someone adopts to your way, you directly or indirectly start controlling their behaviour through your solution. Once that becomes a habit, it is very difficult for someone to change.

Predicting user behaviour along with providing a valuable solution is something which makes entrepreneurs different.

Many a times when we hit a roadblock, we just go into a shell. The moment we get into the shell, we start thinking about possible solutions and many a times, all the solutions we think about may not make sense.

The third principal of effectuation helps focus on turning the unexpected into our favour.

Let me give you an example, when Air Deccan (India) started their operations, many people were bullish. All airlines which were existing till then (Air India, Kingfisher, Jet Airways etc.) were all full service airlines and Air Deccan was the only low cost carrier and it was very different from the other airlines. Food was not free, few rows of seats were not free. Additional luggage was charged etc. This is the unexpected ways to make money. Air Deccan succeeded and also expanded rapidly.

Today, Indigo is the king of low cost carriers in India. It came to such an extent that the Government had to set many rules to ensure people also benefit from the business. Indigo found all the ways to create business. Even wanting to board first is charged (which no one thought about earlier). Keeping aside the softer aspects, just look at the various ways Indigo makes money apart from ticket sales.

Keep your eyes open, you don’t know where your can generate more revenue from.

The first thing an Entrepreneur does after evaluating his competition is to plan how to kill his competition. Again, this is human tendency.

The world has changed in the last three decades and today, it is definitely not about killing your competition, but to understand how to work with them.

For instance, the Picture Tube in a TV which Samsung produces is purchased by almost all its competition – Sony etc. Why? Can’t the companies make their own picture tubes? They can, but they rather focus on the outcome of their product rather than the small but important component of the TV. Sony also purchases OLED panels from LG.

The large manufacturing companies definitely use third party components in their products. How are Train engines and aircraft manufactured? The key components are in-house but the remaining are got from their supply chain companies. This not only reduces their burden, but also allows co-existance of companies.

Today’s entrepreneurship is all about co-creation. The more partners you have the more stronger is your value and these partners don’t allow you to loose, but help you move forward.

As a Entrepreneur or Product Manager, identify how you can co-exist.

Typically, any startup or Product Manager looks at how to maximise profits in a short time. This is a common human tendency and definitely not wrong.

But an expert product manager or company looks at what they can loose and what is their threshold to loose.

Let me take an example of HAPLO itself. When we started, the segment is very new. Even though there are many companies doing what we do, the approach we have taken is very different. By conversing with few people, I realised that going down the path of fund raising or investments is not only going to take time but it is also an emotional drain.

I did speak with few investment companies and also few angel investors and everyone had the same question, where is the money in Real Estate? Correct. However, we believed in creating value and this would definitely take time to be demonstrated in the market.

So, we decided we will not spend time trying to raise investments, but rather focus on building the platform in our own way. We hire developers when required, get the job done and we sell and implement ourselves. This is a painful process, but we are the long play.

I am not saying I am an expert product manager, but what I have learned is to look at what we can loose, which is both time and money. This is the reason we do consulting works to ensure our livelihoods don’t get hit and when the time is right, we get on the path quickly.

All I am trying to explain is that as Product Managers or Entrepreneurs, what you need to understand is not everything is a hit or a miss on day one. If you can visualise and chart out what you can loose, it will help you focus better on planning the output of your product.

What is effectuation all about? Is it a new way of thinking? It is definitely a way of thinking, but a little different, a thinking supported by data and research on how entrepreneurs create or bring new ideas to life.

What are the fundamentals of Effectuation?

The premise of effectuation stands on 5 principals:

• The Means
• Focusing on the downside
• Creating with Partnerships
• Leveraging contingencies
• Having a world-wide view

How do these principals differ? Well, the Business Model Canvas and the Entrepreneurs framework’s provide us a template to start working with, but they do not provide a way of evaluating the idea as much. For instance the BMC gives you template to identify what your idea is, what the value is, who are your stakeholders, how are you going to establish your customer support, how do you generate revenue and how do you or can you generate additional revenue.

What Effectuation focus’s on is to give you a means to understand the problem. This is very different from the frameworks.

Let us understand this a little in detail.

The Means

As an entrepreneur, it is very important to understand yourself first. Who am I? This can be a spiritual question, but a practical one. Who am I defines who you actually are, what are your strengths, what are your weakness, what do you know and what you do not know.

As an Entrepreneur it is very important for you to accept yourself first.

I know I can drive a car.

I know that I cannot drive a car.

As an Entrepreneur, if you take my example:

• I know that I can build something which creates value
• I know that I cannot sell globally on day 1.

When you start working with this preamble, it will give you a realistic perspective and allows you to be grounded all the time.

The means begins with with self, understanding who you are, what your limitations are.