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The Entrepreneurial Method: students validate theory with practice in class

11 Nov 2018

WRITTEN BY Komselis Alexis
Teaching Fellow
Director of AHEAD - ALBA Hub for Entrepreneurship and Development


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The academic year for Alba’s new MSc in Entrepreneurship cohort kicked off in September and our students followed the introductory course “Realities of Entrepreneurship”. In this course we aim at showcasing the entrepreneurial method based on the theory of Effectuation, as introduced by Professor Saras Sarasvathy in 2001.

“Realities of Entrepreneurship” focuses on understanding, analyzing and applying the five effectual principles that combine into the effectual cycle. By using this cycle, entrepreneurs can exploit ideas and form ventures that avoid usual startup pitfalls. The effectual principles are:

  • Means: Entrepreneurs set up goals based on possibilities that relate to their means; who they are, what they know and whom they know.
  • Affordable Loss: Entrepreneurs examine opportunities and limit risk by defining what they can afford to lose.
  • Co Creation Partnership: Entrepreneurs expand their means and create more possibilities by working with others and identifying key partners.
  • Leverage Contingencies: Entrepreneurs embrace surprises.
  • Worldview: Entrepreneurs avoid prediction and prefer to control their settings by focusing on actions that they determine.

These principles are intuitively combined by entrepreneurs in what researchers identify as the effectuation process. Means create goals and encourage interactions that look for commitment in order to implement ideas. Commitment create new means and expand goals. At the same time, changes in the environment may create additional means, new possibilities or lift constraints. The combination of the above drives entrepreneurs to create new firms, products or, even, markets.


effectuation 101



Discussing such an anthropocentric theory is accelerated by inviting guests. So, our students had the opportunity to interview, challenge and learn from six entrepreneurs who visited our class throughout the course.


The Means of an entrepreneur are what makes her and the entrepreneurial idea she pursues unique. Understanding the Means behind ones entrepreneurial activity makes it easier to identify competitive advantages, risk factors and success drivers. We welcomed four entrepreneurs who answered in depth questions aiming at re-constructing the Means that initially were the cornerstone of their start up process. Ploos Design co-founder Angelika Niarchou, 9AM’s owner Vicky Dallas, The Local Pub  & Anastasiou Microbrewery  owner Fotis Anastasiou and The Cube Athens  co-founder (and iconic figure of the Athenian startup ecosystem) Stavros Messinis, openly shared their stories and contributed to our understanding of the Means principle.

From right to left: Angelika Niarchou, Vicky Dallas, Fotis Anastasiou and Stavros Messinis

From right to left: Angelika Niarchou, Vicky Dallas, Fotis Anastasiou and Stavros Messinis

The next step in understanding the entrepreneurial method is the element of Affordable Loss that is closely linked to risk. Isidoros Sideridis, CEO & co-founder of Sieben-Pobuca , shared his insights in class linking the growth of Sieben-Pobuca to relevant risk factors. From a university student team of seven, five really started the company and now four are still part of the business. Not all entrepreneurs have the same attitude towards risk and each one has a different level of Affordable Loss. Once Sieben-Pobuca sold part of its traditional business in Greece and decided to reinvest in developing CRM as a service solutions for the international market under the Pobuca brand, one of the initial founders decided to step back. Even during the first days of Sieben, not all of the initial Patras University research team decided to take the plunge and become entrepreneurs. Isidoros also shared with the class challenges of entrepreneurial growth: the challenges of growing a company from zero to twenty five employees and then getting to the first one hundred, attracting and retaining talent, and becoming a truly international venture.

Affordable Loss Isidoros Sideridis

Isidoros Sideridis


The entrepreneurial method’s third principle is Co-Creation. Entrepreneurs can expand their Means and reduce risk by co-creating with others. A metaphor that showcases how Co-Creation works is quilting (or patchwork). Entrepreneurs firmly attach to their Means little “pieces” that others contribute in a continuous process that no-one can predict the exact outcome. “Crazy Quilting” allows for achieving larger goals, faster growth, pivoting and peer support. Co-Creation within this context goes beyond contractual partnerships, and focuses on sharing success and downturns. Yiannis Varellas-Ouzounopoulos, Founder of Olyra Foods and 5th generation family business member at Flourmills Thrakis, shared the vision behind Olyra and explained how he built his new venture following the Co-Creation principle. A key challenge for Yannis was not taking his products to the US, but combining the quality he aspires to offer his customers with increased production capacity to satisfy anticipated demand. He achieved this by relying on his extended means and co-creating with one of the leading production facilities in Greece. At the same time, Yannis co-created (and is still doing so) his final product together with his consumers. As a result, he will be reducing the use of plastic in his packaging to reduce Olyra’s environmental footprint and cater for consumer expectations.

co-creation guest - Yannis Varellas

Yannis Varellas-Ouzounopoulos


To sum up, Means, Affordable Loss and Co-Creation are the three principles of the entrepreneurial method that allow entrepreneurs to Leverage Contingencies and exercise Worldview. Contingencies are essential parts of the entrepreneurial journey and offer both opportunities and obstacles. Since entrepreneurial goals rely on existing or co-created means the entrepreneur is in control of her business, she controls her environment and can determine her future. The entrepreneurial method is a different way to interpret and understand entrepreneurial failure or success. It offers a rooted paradigm that applies across all sectors and a self-check mechanism that helps entrepreneurs craft their own path in venturing.


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