Affordable Loss Covered in TechCrunch editorial

Check out TechCrunch today - the article by Peter Sims talks about making "little bets" ...

http://techcrunch.com/2011/03/19/little-bets/

About effectuation in the article - 

Just as Twitter went from a small bet to a big one, small bets are affordable and achievable ways to learn about problems and opportunities, while big bets are for capitalizing upon them.

Saras Sarasvathy, a professor at the Darden Graduate School of Business at the University of Virginia, is one of the leading researchers to study how entrepreneurs tend to make decisions. (One of her studies, titled, “What Makes Entrepreneurs Entrepreneurial,” started to ripple through Silicon Valley after Vinod Khosla posted a copy of the article on the Khosla Ventures website along with the note, “First good paper I’ve seen.”)

Sarasvathy points to the value of what she calls “affordable losses.” Seasoned entrepreneurs, she emphasizes, will tend to determine in advance what they are willing to lose, rather than calculating expected gains. They don’t teach this in business school; just the opposite, in fact. But the next new billion-dollar idea is virtually impossible to predict, even for a visionary like Mark Zuckerberg for much of Facebook’s early history.

Also included are Lean Startup (Eric Ries), the Customer Development model (Steve Blank), and Dave McClure of 500 Startups. Cool!