As we integrate all the learnings this week, we have looked at all five principles together in the Airbnb story. We also have to look at how to put all these principles into motion in the form of an effectual process, which we will do next. But before we do that, it would be useful to review the fundamental dimensions of the space in which all entrepreneurs operate. Let's go back to the beginning. When I went out and did the research with the expert entrepreneurs, the key finding was their attitudes towards prediction. In most toolboxes that we teach in business schools or you learn through books and media, there is this idea that we need to learn to predict the future better, because to the extent that we can predict the future, we can control it. Prediction leads to control. This is why in my early status as an entrepreneur, a lot of the books we're talking about, seeing things around the corner and skating to where the puck will be and stuff like that. But when I actually did the research with the expert entrepreneurs, I found they were doing the inverse. They were thinking that we can actually literally separate prediction and control. If you separate prediction and control to do non-predictive control or effectual action, the interesting thing that happens is you actually get four strategies. Strategies that are high in prediction and high in control, low in prediction, low in control, and then you also get the causal strategies, high in prediction, low in control, and the effectual strategies which are low in prediction, and high in control. Now, the high in prediction and high in control is actually the visionary quadrant. A lot of the time people think that that's what entrepreneurs are actually very good at. They are visionaries, they can see the future, and they can make the future happen. The idea here is you stick to your vision, you're persistent, you're passionate, and you're going to make exactly what you want happen. The opposite view is to be nimble and quick and flexible and adjust. It's the adaptive quadrant, which is where a lot of novices begin their journey. We've already talked about causal and effectual a lot in this course so far. Here what I want you to notice is that in actual fact, you can mix and match strategies from all the four quadrants. You can move from one quadrant to another at different stages in the venture, but also in different stages in your career or in any other thing that you're designing to co-create the world with somebody. As you are co-creating, as you are effectuating, you do have the option to use some of the other strategies as well. For example, a lot of us, just like me, will begin very early stage in the adaptive quadrant. We're just trying many different things. Then we might suddenly get passionate about something or we come upon a pitch that sticks, and now you've got a huge bunch of money and you can literally implement your vision, so you can move into the visionary quadrant. Or you can learn how to do some design thinking, you can do some customer interviews and get user inputs and develop prototypes, find product market fit, and you can move through it into the pitch quadrant and into investment and building the company. You can also start effectually and then if needed, because the world sometimes asks you to be more causal than you actually want to be, you might end up writing a business plan. You have to learn some of these techniques and that's okay too. One of the things you want to understand is that you are going to be navigating just like all human beings, in fact, not only entrepreneurs, you're going to be navigating this prediction control space. The last thing I want you to think about here is these expert entrepreneurs who have all these experience of everything that happens in entrepreneurship. For some reason, they overwhelmingly prefer the effectual quadrant, especially when they're starting a new venture. Think about that for a minute. Why is it that they prefer that quadrant? There are two reasons that you can think of. One is that experience teaches them and you have yourself been through their experiences with them but you also have your own experiences. You can see there is something very special about working with people that allows you not to have to predict a future and not to have to place bets. But the other reason the expert entrepreneurs told me is because they said, even if the future is predictable, we don't want to actually be there because if the future is actually predictable, in the case of the venture we are building, then somebody who's smarter, who can predict better, who has deeper pockets can come and grab that. You want to be in a space where maybe things are a little bit more unpredictable and that you can actually shape and co-create with whoever wants to work with you.
