Entrepreneurship: A great article on what makes entrepreneurs entrepreneurial and the gauge of value...

I came across this really interesting article written by Saras Saraswathi, which I downloaded while looking up Vinod Khosla the No: 1 VC ranked by Forbes & Fortune. http://www.khoslaventures.com/presentations/What_makes_entrepreneurs_entrepreneurial.pdf. The article clearly brings out what qualities makes an entrepreneur unlike the qualities that make a good manager by bringing out the difference between causal reasoning and effectual reasoning. While in causal reasoning the manager often knows that goals to achieve and may or may not use creativity to pick the best means to achieve the stated goal, while the entrepreneurial effectual reasoning takes stock of the means and set out to action on several means to achieve a unstated or not clearly articulated goals. The author brings out an interesting nuance that good entrepreneurs demonstrate both the qualities of reasoning fairly well....Quiet interestingly entrepreneurs have 3 very important principle abstracted by the author so well: 1. "The affordable loss principle", 2. The strategic partnership principle and 3. The leveraging contingency principle. The Causal reasoning fellows look for predictive model to enable them control a situation, while the effectual reasoning fellows don’t care predicting things they can control nevertheless...Quiet interesting insight for some managers out there :-)....it often sparks a question in my mind why are managers so paranoid about risks-contingency plans, issues etc. on an opportunity...aren’t they the experts who should take it on stride and solve it as it comes along or atleast influence the desired outcomes being the players rather than the spectators... to me that separates leadership and management....

I've also been simultaneously reading about the value created by entrepreneurship http://www.mitpressjournals.org/doi/pdf/10.1162/itgg.2006.1.1.97 . One is an Opportunistic entrepreneurship and the other is Necessity Entrepreneurship.
Opportunistic: It seems leads to tapping the opportunity for unmet need in the market through Innovation. This will result in creating probably a "New Business Model" with new job. This I also come to believe has a positive correlation with GDP and growth of country, thereby adding the maximum value.
Necessity: This I understand stems, when a new entrepreneurial venture is started as the resources are not employable or lack of opportunities for employment. Classic example is that of an agriculturist who ploughs his/her own land to make a living. This does not add great value to the society...
The article also goes ahead in identifying three stages through the development cycle that a country goes through resulting in entrepreneurial ventures/self-employment opportunities: The 3 stages are: agricultural/small manufacturing firms with high self-employment but limited value, stage 2 where managers are in great demand and small firms become bigger, here the self-employment opportunities shrink, this is then followed by Stage 3 where services overtake and creates more self-employment opportunities. Interesting to see in which stage a country is in, thereby giving us cues to what we can expect as the next stage of development/evolution of firms.... But, interestingly it also helps us understand whether an entrepreneurial venture would eventually lead to contributing value to the society on nation-sate.....interesting reflections for me is to consider if any of this thoughts could be used to view the new deals that we sign for our firm....are these deals value adding or value eroding....which stage of cycle is the firm in considering the unprecedented volatility in the markets right now....interesting to think about it....