In entrepreneurship and innovation, ideas are just one part of the story. Everything depends on whether or not you can raise money to execute them!

People often think that ideas will be enough to let people change their minds and behaviors. Once you have a great idea, everything depends on advertisements to make people buy it.

People often think that you have to wait until you get the right idea, or that you have to get some kind of flash of genius to get a great entrepreneurial idea. In reality, ideas are very often the result of the entrepreneurial process itself, or they can come from exchanges with customers or potential partners.

Some entrepreneurial ventures are best started alone: if the entrepreneur has all the capabilities required to launch the venture, or when the entrepreneur simply doesn’t find the right people with whom s/he can cofound, single founded businesses are the best option for entrepreneurs. Many studies have shown, however, that the success rate of team-based entrepreneurial ventures  is higher than the success rate of solo entrepreneurs.

Even though team-based ventures have a higher likelihood of success, their success depends on whether the team is sufficiently complementary in composition, and whether the team has actions in place to manage the diversity in objectives and actions in the team.

The role of the entrepreneur is to come up with great, visionary ideas. From thereon it is just execution. Good entrepreneurs are able to raise money on the basis of this vision, and then pay people that can execute the vision for them.

The reality of entrepreneurial ideas is that they are most often the result of co-creation. Entrepreneurs build on elements of value creation, value distribution and value capture that they observe, have experienced or that they other people share with them and then recombine through trial-and-error.

Big successes are 50% great ideas and 50% hard work.

Great businesses all started with great ideas.

Ideas can be as much the beginning as they result of an entrepreneurial process.

Ideas require patience, not genius. You just have to wait until the right idea comes to you.

What design thinkers initially brought to the field of product development is “Iteration”. Rather than seeing new product development as a linear process of ideation, manufacturing and finally marketing and sales, it brought in the idea that it is better to test raw ideas quickly through experimentation and prototyping, and to only perfect ideas once the basics are right.

While creativity and innovation can come from processes that are not as rigorous or methodical as design thinking, and often involve serendipity and pure luck, design thinking offers a way to reproduce this process in more deliberate ways. The process of design thinking is sensitive to recombining new knowledge, with existing knowledge. As such it is sometimes important to replicate ideas that have already been tested in one domain and apply them to other domains. This is the reason why design thinking teams are often multidisciplinary.

Design thinking has introduced the notion that “Imitation” is the enemy of “Innovation”. If you want to innovate, innovators must take everything that is already known and then stay away from this as much as possible. Breaking the rules and imagine new unprecedented futures is why the design thinking is called design “thinking”: it is only through intellectual processes that novelties are conceived.

One of the most important barriers for aspiring entrepreneurs is their fear of failure. What the Lean Startup helps doing is to split up the search cost into smaller costs, such that the cost of potential failures is both minimized and managed.

The Lean Startup offers a way to speed up the search process involved in entrepreneurial ventures and innovation projects. Since the search process requires getting validation on many assumptions, the process forces one to think of experiments and tests that can validate these assumptions in the quickest and cheapest way possible, rather than making these tests only once they have turned into “perfect” products.

The word “Lean” in the “Lean Startup” shows that building ventures must be done without any cost or investment in money, knowledge, time or other resources. The Lean Startup therefore manages the risk of venture building by completely eliminating the risk.

Many entrepreneurs and their stakeholders like the rigor that the Lean Startup offers in developing a venture. The fact that the development of a venture can be turned into a process that can be tracked and traced, gives them the feeling that they have more control over the process.

In the process of searching for a self-sustaining and successful business model, success is not only uncertain, but is likely to involve both small successes and failures. Knowing how much money, time or other resources that one is willing to invest in this process does not take away the uncertainty, but it ensures that the impact of this uncertainty is managed. The affordable loss principle is what turns entrepreneurs from reckless risk seekers into smart risk managers.

The affordable loss principle forces people to only choose resources that are cheap or for free. The difference between managers and entrepreneurs is that managers have budgets, while entrepreneurs don’t. Since entrepreneurs don’t have any resources, they cannot spend it, and so they have to manage all their decisions in a way that they do not spend or lose any money. This is precisely the reason why entrepreneurs always look for investors, so that the entrepreneurs can draw a salary for building the venture. By not spending any money, they make the risk of failure, and hence any losses, affordable. The affordable loss principle could therefore have been called the “not spending any money” principle.

While success is uncertain, one can predict how much one is willing to lose. By sinking the cost of (potential) failure in advance, entrepreneurs can operate with much more focus on what needs to be done to develop the business. Instead of being afraid to fail, they know that they can carry the cost of a (potential) failure. Fear is often bad company in decision making, and so managing the emotions involved in this process is important. Next, one can focus all one’s efforts on building the venture.

During the process of developing a business, choices have to be made about the opportunities and approaches followed for the venture. While in predictable environments one can use financial methods to optimize these decisions, such as the calculation of the “Net Present Value” of these decisions, and choosing the best option between them, future revenues are often unpredictable in startups. As a result, this method is difficult to use in startups. In order to apply some rigour to the decision process, the affordable loss principle allows the entrepreneur to base their decisions on what IS controllable, ie - the amount of time and money that one is willing to dedicate to a decision. This doesn’t mean that these decisions cannot change, nor that other solutions can be found to solve resource constraints (by partnering with others for example), but at least they offer a method to make decisions for the entrepreneur.

Coincidence is the enemy of both scientists and entrepreneurs: this is why their sponsors (research funds or investment funds) require them to present detailed plans on how their money will be used, and what the expected results will be.

Scientists and entrepreneurs find their discoveries in books.

Scientists often formalize their ideas into hypotheses, for which they then design experiments to test their veracity and accuracy. Entrepreneurs turn their ideas into hypotheses and design tests to validate them as well!

Both scientists and entrepreneurs have absolute freedom in doing exactly what they want. 

You have always thought that bathtubs are so old fashioned. While you can turn on your heating and lighting in the house with a light, why not develop a similar system for bathtubs. You would just use your smartphone to make your bathtub fill up with water at the exact temperature that you would desire. By the time you get to your bathtub, you no longer have to wait and you can just sink in and enjoy it at exactly the right temperature. Welcome to the world of the “Internet of Bathtubs”! All it would take is to develop an app and a communicating tap. You even have the name ready: “RunTapp”.

The Covid-19 pandemic has frustrated the three of you: your social life is just not what it is supposed to be for people of your age. If only you could go back to organizing festivals in the worry-free way that you had been able to do 3 years ago. Your desire to make a huge impact on the world inspires you to make a bold statement: you will develop a universal, revolutionary COVID-eradicating medicine. Your passion is your most important asset and the three of you are determined to making your dreams come true, make an impact on the world, and becoming the next unicorn in life sciences.

You think about launching an investment fund in startups. Investing in startups is so cool: you get to see so many startups, and invest in the most promising ones. Your friend’s experience with Eurazeo is showing just how exciting it is. She says that all it would take is to find about 100 million euros from investors in your fund, and then start looking for startups! Surely you will develop a reputation quickly so the startups will choose you over more established ones!

The three of you love smoothies: they are healthy, much better tasting than all the crap food that you tend to eat when you have an afternoon crave, and more convenient and consistent in quality than fruit. Yet your knowledge of sport foods has shown that they also lack protein, an important ingredient. Your friend working at Monoprix says that protein rich foods are a booming product category. So you come up with the idea to launch a protein smoothie. You already make them at home by mixing fruit and greek yogurt in your blenders, and your friends love them. All you need now is a brand name and start selling!

You start making random sounds with your voice in different directions. If there is an echo, this may mean that there is a wall closeby.

You start thinking about all the kinds of dark rooms that you have been in your life, and then predict whether the doors were more on the left side, or the right side. Depending on this analysis, you convince the two others that they have to run in your chosen direction and open the door for you. Once they have opened the door, you can walk safely to the door yourself, where the two others will thank you for your genius insights.

You refrain from going too fast to avoid falling over, bumping into the other objects or hurting yourself. Instead, you take small steps and touch around you to get a better sense of the environment around you.

Each framework is like a different religion. Some people believe in Design Thinking, others in Effectuation, and yet others in the Lean Startup. Each framework has its own community, and gatherings. This is important to know, because once you choose one framework, it is difficult to combine it with other frameworks.

Old wine in new bottles. It is actually three times the same theory, but just using new terms and concepts. Airports have bookshops and they have to sell books. So writing the same thing in different words improves book sales.

Each framework takes a different perspective on the entrepreneurial process. While the main question for design thinking is how to come up with more innovative ideas, effectuation takes the perspective of the entrepreneur and offers insights into how entrepreneurs deal with the potential costs of failure in the innovation process. The lean startup shares with design thinking the attention for the project, but goes beyond the creative process and applies this thinking to the development of an entire venture. So each perspective helps to find answers for different sub-questions of the innovation and entrepreneurship process.