The generation of new markets is an emerging area of interest among researchers working in the traditions of evolutionary economics. And true to those traditions, the current study incorporates empirical evidence from psychology and cognitive science to develop micro-foundations for evolutionary theories of new market generation. In this paper we present an indepth analysis of how expert entrepreneurs use effectual logic to conceptualize the creation of new markets. Our results challenge received wisdom based on search and selection processes and move beyond combinatorial ideas to develop instead a “transformational” view of market genesis.