In a nutshell
When we ask entrepreneurs how they think, we usually get stories – not evidence. This study replaces self-reports with real-world decision tests that reveal what entrepreneurs actually do when faced with uncertainty.
For a long time, entrepreneurship research assumed success came from good planning. Set a goal, make a plan, gather resources, execute. The entrepreneur was seen as a rational architect, building their venture brick by brick according to a blueprint. Then Saras Sarasvathy came along and asked one simple question: is that really how entrepreneurs work? She decided to interview a bunch of expert founders, and what she found didn’t fit the textbook model at all. They didn’t start with a fixed goal (that’s causation) – they started with what they already had and worked outwards. Instead of trying to predict the future, they co-created it with others as they went.
From that insight came effectuation theory – a way of explaining how entrepreneurs act when the future can’t be predicted. It was a huge shift in thinking, and entrepreneurship educators quickly embraced it. It gave them a framework for what they were already trying to do: help students learn by doing, by testing ideas, and by dealing with uncertainty firsthand.
But there’s been a persistent problem ever since effectuation theory emerged: how do you actually measure it? For two decades, most studies relied on simple self-assessment questionnaires – “I prefer to act quickly under uncertainty,” “I start with what I have,” and so on. Useful, but limited. People aren’t always reliable narrators of their own behaviour, especially when they’ve been taught the “right” entrepreneurial answers.
This new study, led by Sonia Koller, Gorkan Ahmetoglu, and Ute Stephan, takes a more grounded approach. Instead of asking entrepreneurs to describe themselves, it places them in a series of short, realistic business situations and asks what they’d do next. Do you plan first? Team up with others? Take a small risk and see what happens? The thought was for each scenario to work a bit like a role-playing game.
Publication Date: November 2025
Authors: Sonia Koller, Gorkan Ahmetoglu, and Ute Stephan
Institution: King’s College London, King’s Business School; Division of Psychology and Language Sciences, University College London
Study Type: Scale development and validation (seven studies, including a 14-month panel)
Sample Size: UK entrepreneurs (N= 176 at baseline; N= 93 follow-up)
Research Focus: Measuring entrepreneurs’ use of effectuation through a situational judgment test (SJT) capturing real-time decision-making under uncertainty.
Research Methodology: Multi-study validation using psychometric testing, longitudinal data, and comparisons with self-report scales to assess predictive and incremental validity.
Main Findings: The SJT identified five effectual logics – causation, focus on means, affordable loss, co-creation, and leveraging contingencies – and predicted venture outcomes more accurately than traditional surveys. It offers a robust new way to study entrepreneurial cognition and evaluate experiential learning.
Citation: Koller, S., Ahmetoglu, G., & Stephan, U. (2025). Measuring entrepreneurs’ use of effectuation as heuristics: Development and validation of a situational judgment test (SJT) for effectuation. Journal of Business Venturing, 40 (6), 106538. Link
Each possible answer reflects a different way of thinking – what the researchers call “logics”: planning ahead (causation), using what’s already at hand (focus on means), keeping losses manageable (affordable loss), partnering with others (co-creation), and making the most of surprises (leveraging contingencies).
The team spent several rounds refining these scenarios until the test felt realistic and reliable. Then they followed a group of UK entrepreneurs for more than a year to see whether their answers could predict what actually happened in their businesses. And as it turns out, they could.
Entrepreneurs who leaned toward co-creation reported making more progress. Those who scored high on causation attracted more funding. Those who focused on affordable loss kept their spending in check. Generally, the test picked up subtle patterns in decision-making that traditional surveys completely missed.
Even better, these results held up over time. The old self-report questionnaires – the field’s long-standing standard – showed almost no link to later success. The situational test, meanwhile, consistently explained who was more likely to keep their ventures moving forward.
That’s what makes this study a subtle but genuinely important shift for entrepreneurship research. It shows that we can move beyond asking entrepreneurs what they believe about themselves and instead look at how they reason when the path ahead is uncertain. It hints at better ways to understand what students actually learn from experiential courses – not by surveying their confidence levels, but by seeing how they’d act in messy, realistic situations. It’s a reminder that if we want to understand entrepreneurial thinking, we should stop asking people what they think and start watching how they decide.
Related Research Recaps include
The Skill of Seeing What Others Miss and
Measuring What Matters.
