ENTREPRENEURSHIP
(Co – Creation Partnership)
EFFECTUATION
Effectuation is a way of thinking and decision-making
that is based on the idea that entrepreneurs create
their future by taking action and making things
happen.
It is a way of thinking that is focused on creating
opportunities and solving problems by using the
resources that are available to you, rather than
making predictions and trying to plan for the future.
Effectuation is an idea with a sense of purpose – a
desire to improve the state of the world and the lives
of individuals by enabling the creation of firms,
products, markets, services, and ideas.
THE PRINCIPLES OF EFFECTUATION
BIRD IN HAND PRINCIPLE (Means)
When expert entrepreneurs seek to build a new
venture, they start with their means. These means
can be grouped into three categories:
• Who I am—my traits, tastes, and abilities
• What I know—my education, training, expertise,
and experience
• Who I know—my social and professional
networks. Using a combination of these means, the
entrepreneur begins to imagine possibilities and
take action.
AFFORDABLE LOSS PRINCIPLE
(Focus on Downside)
• In much of the business world, the manager in
charge of launching a new product analyses the
market and chooses segments with the highest
expected value. It is a natural reflex that is the
result of years of training around a single mantra:
maximize returns by selecting the optimal strategy
for your target.
• Expert entrepreneurs turn this logic on its head—
they think in terms of affordable loss rather than
expected returns.
• They decide what they are willing to lose rather
than what they expect to make. Instead of
calculating upfront how much money they will need
to launch their project and investing time, effort,
and energy in raising that money, the effectual
entrepreneur tries to estimate the downside and
examines what she is willing to lose.
CRAZY QUILT PRINCIPLE
• The crazy quilt principle of effectual reasoning is
the focus on building partnerships rather than
beating competitors.
• Since entrepreneurs tend to start the process
without assuming the existence of a predetermined
market for their idea, they don’t know who their
competitors will be, so detailed competitive
analyses have little value. Instead, entrepreneurs
generally take the product to the nearest potential
customer.
• Some of the people they interact with make a
commitment to the venture, committing time
and/or money and/or resources and, thus, self-
select into the new-venture creation process.
LEMONADE PRINCIPLE
(Leverage Contingencies)
• If you come across lemons, make lemonade! The
third principle of effectual reasoning is at the heart
of entrepreneurial expertise—the ability to turn the
unexpected into the profitable.
• Expert entrepreneurs learn not only to work with
surprises but also to take advantage of them. In
most contingency plans, surprises are bad—the
worst-case scenarios.
• But because entrepreneurs do not tie their idea
to any theorized or preconceived “market,”
anything and everything is potentially a surprise
that can lead to a valuable opportunity.
PILOT IN THE PLANE PRINCIPLE
(Control vs. Prediction)
• Psychological research suggests that an
enormous range of human behaviours relate to
control striving in some way and are intrinsically
linked to healthy human functioning.
• Having a desire for control over your life doesn’t
make you a “control freak” (despite what your
friends may say!). Instead, it is normal and healthy.
Many entrepreneurs instinctively recognize the
importance of personal control: fundamentally,
many chose entrepreneurship because they want to
be their own boss and choose their own course.
• Control enables entrepreneurs to work on things
they think are important, set their own schedules
and work with whom they want.
 14. Social responsibility is important.
EFFECTUAL CYCLE
UNITED NATIONS SUSTAINABLE DEVELOPMENT
Effectuation isn’t a static, one-time exercise. It is a
logic and process that can be used as the firm GOALS (UN SDG)
develops in the “0-60mph” (early startup) phase of • The 2030 Agenda for Sustainable Development,
growth. Expert entrepreneurs follow the process to adopted by all United Nations Member States in 2015,
gain early customers and committed partners who
provides a shared blueprint for peace and prosperity
then create new means and new goals as resources
for people and the planet, now and into the future.
and viewpoints are added to the mix.
• At its heart are the 17 Sustainable Development
• The entrepreneur’s means provide the starting Goals (SDGs), which are an urgent call for action by all
point. The action begins in earnest when the countries - developed and developing - in a global
entrepreneur begins interacting with people.
partnership. They recognize that ending poverty and
other deprivations must go hand-in-hand with
• Sometimes the starting point of that interaction
is an idea, a provisional goal the entrepreneur strategies that improve health and education, reduce
uses to initiate the interaction. inequality, and spur economic growth – all while
tackling climate change and working to preserve our
• Sometimes the interaction is specifically initiated oceans and forests.
in the terms of “what can we do?” as the
1. No Poverty
entrepreneur determines possibilities together
with the person she interacts with. 2. Zero Hunger
3. Good Health and Well-Being
4. Quality Education
HENRY SY AND HIS 14 LIFE PRINCIPLE 5. Gender Equality
6. Clean Water and Sanitation
HENRY SY SR.
7. Affordable and Clean Energy
• Filipino-Chinese business tycoon and entrepreneur 8. Decent Work and Economic Growth
9. Industry, Innovation, and Infrastructure
• most famous for founding the SM Malls, the
10. Reduced Inequalities
Philippines' largest group of malls
11. Sustainable Cities and Communities
• He owns numerous companies in the areas of real 12. Responsible Consumption and Production
estate, banking, education, mining, retailing, and 13. Climate Action
hospitality, resulting in him being recognized as the 14. Life Below Water
wealthiest person in the Philippines, with an 15. Life On Land
estimated personal wealth of 13 billion dollars. 16. Peace, Justice, and Strong Institutions
17. Partnerships for the Goals
He is also dubbed as the “Father of Philippine
Retailing” due to owning the largest group of malls in SM Group of Companies – UN SDG
the country.
“We serve as a catalyst for development in the
HIS LIFE PRINCIPLES communities where we are present. Our Path to
Sustainable Growth is focused on energizing local
1. Strive to be a leader in your chosen field. economies.”
2. Be a person of integrity.
3. Have a long term vision and strategy. Wherever SM operates:
4. Focusing means concentrating and prioritizing.
1. We Provide Inclusive Economic Opportunities
5. Have great passion to achieve.
- Job Creation
6. Work hard.
- Inclusive Supply Chains
7. Be patient and persevere.
- Innovative Banking Products and Services
8. Recognize opportunity.
2. We Facilitate Development
9. Be optimistic.
- Public Infrastructure Building and
10. Be confident.
Rehabilitations
11. Be disciplined.
- Integration of Disaster Risk Reduction
12. Build your organization.
Features in Design and Management Systems
13. Make it your mission to provide employment.
 3. We Promote Environmental Sustainability
- Conservation and Preservation of Natural
Environs and Biodiversity
- Responsible Consumption

4. We Create Positive Community Impact

- Holistic Community Development
- Promote Social Inclusion

5. We Drive Sustainable Growth

- Contribution to National Development Goals

BUDGETING AND SAVING

SAVINGS

The importance of saving money is simple:

• It allows you to enjoy greater security in your life. If

you have cash set aside for emergencies, you have a
fallback should something unexpected happen. And, if
you have savings set aside for discretionary expenses,
you may be able to take risks or try new things.

Importance of Savings

Why to save money:

- Makes you financially independent.

- No need to take loans and pay interest to
financial institutions.
- Helpful in emergency times.
- Lead a stress-free life.