Effectuation

Under Knightian uncertainty, start from available means and affordable loss—not a fixed goal and predicted return. Create the path through controllable action and real commitments.

When to Use

• The market, technology, or problem is novel enough that outcome probabilities are not trustworthy.
• Means are clearer than the goal: identity, skills, assets, and network exist before a fixed target does.
• A small action can buy information or a partner commitment without risking ruin.
• Plans keep breaking because the environment shifts faster than forecasts.

When NOT to Use

• The path is predictable: known market, knowable unit economics, established playbook → use causal planning.
• A single wrong step is ruinous or irreversible → de-risk first; do not treat affordable-loss steps as free.
• The goal is already fixed and resources are the only uncertainty → plan to the goal.
• Routine execution with settled requirements → act; do not re-inventory means.

Procedure