In this chapter, we draw on Sarasvathy’s (2001) concept of effectuation and underlying logics for exploring the innovation processes in entrepreneurial firms. Contrary to the traditional understanding that co-opetition is more suitable for large corporations, the effectuation concept provides a novel perspective for entrepreneurial firms to pursue innovation (Sarasvathy, 2001). Instead of focusing on maximizing returns, the effectuated decision making process allows entrepreneurial firms with insufficient resources to select the optimal solutions based on given means or tools and the abilities to control unpredictability, withstand affordable losses, adapt surprises and collaborate with stakeholders. In this way, incorporating these five effectual principles would provide a more realistic approach for entrepreneurial firms to pursue the innovation process (Sarasvathy, 2001).