An effectual entrepreneur begins with a given set of means and allows goals to emerge contingently over time from the varied imagination of founders and people the business interacts with. Bruce Flohr, an effectual entrepreneur and founder of San Antonio-based company RailTex, was able to conduct his business without a strategy and turn it into a $353 million dollar company. He started his company in 1977, renting hopper cars to owners who needed to transport crushed rocks to construction sites. By 1993, his company went public and became the leading operator of short-line railroads, and eventually went to sell business in 2001. Flohr did this all without a playbook. Flohr gives an example of a close friend, portraying the difference between
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The main difference is that it has structure aimed at reduceing risk. Effectual entrepreneurship lacks structure and is therefore very risky. On the contrary, a hypothesis-driven approach utilizes a 7-step framework aimed at optimizing the use of a startup’s scarce resources. Company’s this approach are known as lean startups. “Entrepreneurs in these startups translate their vision into falsifiable business model hypothesis, then test the hypothesis using a series of ‘minimum viable products’, each of which represents the smallest set of features/activities needed to rigorously validate a concept” (Stevenson, Howard, and Spence). Drew Houston, cofounder and CEO of DropBox, used a hypothesis-driven approach to start his company. While forming the platform for DropBox, the founders wanted customer feedback about what really mattered to them. The platform in progress was called DropBoxMVP to indicate its nature as a minimum viable product. This allowed DropBox to learn the needs of its users and develop a program that provided superior customer experience. By following the lean startup method and incorporating customer feedback into the creation process of DropBox, the company was able to grow from 100,000 users to 4,000,000 users in 15 …show more content…
If we compare Bruce Flohr to Drew Houston, it is apparent that both of their approaches to forming a company were completely different. Although it may not seem clear, they were both alike because neither had a predetermined goal when forming their idea. They had an idea of what they wanted to pursue and formed an MVP, Flohr’s being less apparent, and they revised their plan and product accordingly. Both entrepreneurs continually adapted their goals, through each step of their startup process, to meet the needs of the consumers. Flohr’s adaptation of his company is less apparent than Houston’s, and this is because his adaptations were based on his own intuition rather than testing falsifiable hypothesis’. As mentioned before, this is where the difference lies between effectual and hypothesis-driven entrepreneurship. This further emphasizes the notion that an entrepreneur can embody both types of entrepreneurial thinking and can even benefit from acknowledging the differences. An entrepreneur should recognize the importance of a lean startup strategy while still exploring new
The main difference is that it has structure aimed at reduceing risk. Effectual entrepreneurship lacks structure and is therefore very risky. On the contrary, a hypothesis-driven approach utilizes a 7-step framework aimed at optimizing the use of a startup’s scarce resources. Company’s this approach are known as lean startups. “Entrepreneurs in these startups translate their vision into falsifiable business model hypothesis, then test the hypothesis using a series of ‘minimum viable products’, each of which represents the smallest set of features/activities needed to rigorously validate a concept” (Stevenson, Howard, and Spence). Drew Houston, cofounder and CEO of DropBox, used a hypothesis-driven approach to start his company. While forming the platform for DropBox, the founders wanted customer feedback about what really mattered to them. The platform in progress was called DropBoxMVP to indicate its nature as a minimum viable product. This allowed DropBox to learn the needs of its users and develop a program that provided superior customer experience. By following the lean startup method and incorporating customer feedback into the creation process of DropBox, the company was able to grow from 100,000 users to 4,000,000 users in 15 …show more content…
If we compare Bruce Flohr to Drew Houston, it is apparent that both of their approaches to forming a company were completely different. Although it may not seem clear, they were both alike because neither had a predetermined goal when forming their idea. They had an idea of what they wanted to pursue and formed an MVP, Flohr’s being less apparent, and they revised their plan and product accordingly. Both entrepreneurs continually adapted their goals, through each step of their startup process, to meet the needs of the consumers. Flohr’s adaptation of his company is less apparent than Houston’s, and this is because his adaptations were based on his own intuition rather than testing falsifiable hypothesis’. As mentioned before, this is where the difference lies between effectual and hypothesis-driven entrepreneurship. This further emphasizes the notion that an entrepreneur can embody both types of entrepreneurial thinking and can even benefit from acknowledging the differences. An entrepreneur should recognize the importance of a lean startup strategy while still exploring new