February 18, 2021

Go Before You Know: The Power of Learning Through Doing

Scrabble tiles and smartphone
By: Sarah Williamson


The stories behind many large, established businesses—from Waste Management to Walmart—often start the same way. A young person, motivated by a good idea, pursues small, uncertain niche opportunities. They do so without much capital, research, industry experience, or contacts. 

How does this happen? How does an inexperienced, cash-strapped entrepreneur manage to transform an unrecognizable idea into a sustainable success? 

Hint: It isn’t a propensity for taking risks. 

Origins and Evolutions of New Business

Researcher and author Amar Bhidé has spent more than 30 years looking into innovation and entrepreneurship. In his book The Origin and Evolution of New Businesses, he wrote that “well-planned startups, backed by substantial venture capital are, by far, the exception rather than the rule.”

Because these enthusiastic newcomers are starting small, they have to test their ideas in the real world and learn through trial and error; a process Bhidé describes as opportunistic adaptation

In other words, they learn by doing. Their lack of resources forces these unfunded entrepreneurs to conduct micro-experiments that enable them to test their ideas—thus creating a vital feedback loop that allows them to learn and adapt as they go. 

Different Approaches To Discovery

This ready-aim-fire approach, also known as rapid prototyping, enables entrepreneurs to identify and actualize opportunities that others overlook. It works because they use effectual reasoning. This starts with a given set of means and allows goals to emerge contingently over time from their imaginations and the diverse aspirations of the people they interact with. 

Another approach, called casual rationality, seeks out the fastest, cheapest, and most efficient way to achieve a goal based on extensive research and investment. Causal rationality is important, of course—which is why it’s taught at most business programs worldwide. But effectual reasoning can be highly effective when the cost of failure is low. This is because there was little money to start with.

Thus, to understand how inexperienced, cash-strapped entrepreneurs manage to identify and actualize opportunities, we must recognize that the lack of resources (combined with a willingness to try) forces them to micro-experiment. This type of experimentation, in turn, helps them tease out latent opportunities that no amount of planning can unearth.

What You Don’t Need

Business success requires plentiful capital is a contrary notion. The lack of resources becomes an advantage that enables the “enthusiastic and somewhat inexperienced” entrepreneur to identify opportunities that large organizations are likely to overlook. Like the story of David and Goliath, underdog entrepreneurs learn to transform their adversity into an advantage.

It’s worth noting that inexperience does not equal ignorance. Entrepreneurs must clearly understand the power of effort applied to knowledge and new ideas. This ensures that the actions they take are not misguided or ineffective. This prevents them from getting stuck in the patterns that have held them back in the past.

Looking for Problems

The world has changed in ways that now require everyone to be more innovative and entrepreneurial, regardless of their chosen path. This does not require big ideas, access to venture capital, a genius IQ, or an MBA. Nor does it require an inherent propensity for risk. It does, however, require us to look for problems to be solved. It also requires us to take action, think critically and creatively, and test our ideas in the real world and learn from the results. To adapt and thrive in the 21st century, we must learn how to identify and evaluate new opportunities. We do so within highly ambiguous, resource-constrained circumstances where the rules are not clear. We also do this when the path is not well defined.