Effectual Entrepreneurship Review Part 2: The Perfect Book For Newhouse Entrepreneurs
Part 2:
The name “Effectual Entrepreneurship” is fitting, as it truly began to teach me the ins and outs of funding a startup venture. In Ch. 14, ‘The nuts and bolts of venturing: Effectuation in Action’, the authors begin digging into the details worth noting:
“Angel investors often provide the seed capital for start-ups. They will invest less and earlier than VC firms. Typically, an angel investor will ask for between 20 percent and 50 percent of firm ownership. They may invest as little as US$1000 and more than US$5 million” (p. 135).
As intriguing as it was to learn about the ranging types of angel investors, I also found their insight on firm ownership to be interesting. I obviously want to maximize the income streams in my entrepreneurial efforts (as I want to work for myself, even at my young age), so being flexible about ownership may be essential. The book further notes how “sharing ownership wisely can create more cash than hoarding it. In new ventures, the pie is not fixed. You want to share ownership with talented people, partners, and providers of great resources” (p.129). Becoming fluid in allocating ownership responsibly has truly fleshed out ideas that have been cooped up in my head for almost a year, and this book helped facilitate this growth.
Additionally, this book encourages embracing uncertainty as a force to be used to your advantage rather than a hindering factor on the horizon of innovation. This way of thinking is highlighted in Ch. 15, ‘The lemonade principle: Leverage surprise’, where “in many ways, the lemonade principle lies at the heart of entrepreneurial expertise. It says that the unexpected is not a cost to a new venture; instead, it is a resource that may be turned into something valuable in entrepreneurial hands” (p. 141). Because I want to innovate in multimedia, the communication technology emerging in today’s market are constantly changing and updating, so there is plenty of uncertainty. Rather than viewing this as a hindrance, it instead motivates me to look onto the horizon of what types of media technologies will take precedence moving forward. Ultimately, “expert entrepreneurs exploit contingencies as building blocks for their new ventures. For them, the unexpected event does not represent a loss of control over the situation; it is an opportunity to exercise control of an emerging situation by pointing it in a new direction” (p. 141).
Overall, Effectual Entrepreneurship is the perfect resource for someone trying to uncover the mysteries of entrepreneurship. Choosing to buy this book rather than rent it was a great decision, as I have plenty of reasons to keep going back to it as a therapy tool whenever I am not sure how to approach an entrepreneurial challenge. As the book notes in Ch. 8, ‘I’m human: I’m afraid of failing’, “entrepreneurship is less about the vision and more about the journey of creation” (p. 64), and I am excited to continue this journey with this book. The practical advice given throughout is always worth revisiting, and I want to leave you with one more quip that embodies the reading as a whole:
“You need not wait for the right technology or the proper resources or the massive machinery of governments or the feeble hope of the next election to rebuild your life and the world in which that life seeks to thrive. You can start today—with who you are, what you know, and who you know—and invest nothing but what you can afford to lose to begin building corridors through which your stakeholders can self-select into your valuable new venture. And together you can co-create a better world that neither you nor they can fully imagine at this point in time” (p. 208-209).
These will be words I will live by in my entrepreneurial efforts. I give the book an overall 9.6/10. Definitely check it out, as it has greatly influence my capstone DOodle the News!
He has been published across a wide variety of media outlets, including Sports Illustrated, the Cornell Daily Sun, SportTechie, Clutchpoints, Cavs Nation, the Cornell Chronicle, and many more.
Tobe has a plethora of hobbies, including writing, athletics, drawing, acting, and collaborating with others about ideas and startups working in the multimedia space.