Opportunity Development (VL 5) Flashcards
(24 cards)
When was Decision Theory first proposed and what are some implications?
Proposed in 1944, Decision Theory accounts for the fact that we know the probabilities of the risks we are taking as entrepreneurs. The main ambiguities include the subjective and emotional evaluation of the entrepreneur. Furthermore, the decision making is a dynamic matter that cannot be fixed.
What is Set Theory and what does it proposes?
Set Theory provides a language to describe the openness or closedness of the options and outcomes an entrepreneur has.
What does an Open Set mean compared to a Closed set according to the Set Theory?
According to the Set Theory, Open or Closed define the openness or closedness of options or outcomes in the entrepreneurial field. Closed indicates a set of known probabilities and results, an open one indicates a creative or uncertain ambiance.
How can we classify uncertainty? How many different conceptualizations are there? Who proposed them?
According to Millikan ther are three sources of Uncertainty as Status (lack of data about a current setting), Response and Effect. To Packard there are 2x2 dimensions of uncertainty that end of classifuing them as:
Absolute uncertainty + Creative uncertainty + Environmental Uncertainty + Risk/Ambiguity.
What is the difference between Effectuation and Causation approach?
The Effectuation approach asks oneselves which EFFECT I want to have in an environment considering that I have CLOSED set of options. The Causational approach asks itself HOW to cause a specific X result»> CLOSED outcomes.
How do expert entrepreneurs differentiate themselves from recent entrepreneurs in terms of decision making?
Clark and Klein proved that expert entrepreneurs avoid decisions that include oversimplistic frameworks that attempt to estimate the chances but rather focus on resource based judgments.
What does NONERGODIC means in probability?
Nonergodic means that past decisions and probabilities cannot dictate how likely or less likely a certain outcome is, as the setting might have changed and no longer be applicable.
What does creative uncertainty mean?
Creative uncertainty gives space to a very specific series of outcomes but a variety of forms through which we can solve a problem. - “Get it done, no matter how”»_space;> CLOSED outcomes and OPEN possibilities.
When we choose to go for a creative uncertainty, I also choose a CAUSATIONAL APPROACH that means HOW can I cause X to happen?
When do we encounter absolute uncertainty? What does it mean in terms of possibilities and of outcomes?
Absolute uncertainty is encountered at the initial stages, since the entrepreneur does not know how to approach a problem nor how the consumers will react. We have OPEN possibilities and OPEN outcomes. Eventually, the entrepreneur has to close either its options or its outcomes and choose an effectuation/causational approach.
When do we encounter an ENVIRONMENTAL UNCERTAINTY? What does it imply in terms of possibilities and outcomes?
Environmental Uncertainty means that I do not know WHAT i want to offer but I am sure about WHICH RESOURCES I can exploit. If I do get started looking at the RESOURCES (closed possibilities and OPEN outcomes), I have an effectual approach. Thus, I ask myself, which EFFECTS can I have on the environment?
What is the Lean Startup Approach? What does it mean? Who made it popular?
The Lean Startup Approach was suggested by Eric Ries that it encourages a RAPID OBTAINMENT of FEEDBACK. It suggests learning as quickly as possible about the product and the costumers acceptance of it through an MVP (Minimum Viable Product).
What is a MVP in the Lean Startup Approach?
MVP = Minimum Viable Product > It encourages the creation of the minimum features to quickly obtain feedback and later add potential new features.
What is the difference between OPEN engagement and CLOSED engagement? Who proposes it?
The OPEN vs CLOSED engagement is proposed by Shepherd.
Open engagement = diverse set of team members and pools of people to whom ask questions.
Closed engagement = focus on a set of people related to my product, potentially EXPERTS.
What does the paper by Ravasi & Turati (2005) talk about when referring to opportunity research and evaluation?
Ravasi & Turati mention that opportunity research and opportunity evaluation are ALWAYS in conflict. All opportunities must be tested but we cannot have an expectation of having precise outcomes early as they need time to evolve.
Too much exploration > waste of resources
Too much evaluation > kills innovation
In which case do I have Risk/Ambiguity when talking about uncertainty that entrepreneurs must face?
Risk/Ambiguity presents itself when out options and our outcomes are CLOSED. I know X resources, I want to obtain Y result. This means knowing the odds, but can we really know them?
What is the concept of Pivot or Persevere in the Lean Startup model?
The concept of Pivot or Persevere comes to place when we have the MVP (Minimum Viable Product). This means that after gathering feedback the individual can either alter the product or continue on the same direction.
How does Packard define the Continuous Judgment Process? Which elements take place?
Packard says that the continous judgement process is composed of Judgement > Action > Outcomes (also exogenous factors) and then loop back to Judgement.
Who talks about Belief Formation? What does it mean?
Belief Formation is mentioned in the paper by Zellweger & Zenger and it indicates that Entrepreneurs initiate their process by forming a hypothesis of how a new idea might fit the market. The element of uncertainty is the product being under-fitting.
What is the process of the Lean startup structured according to Zellweger and Zenger?
According to Zellweger and Zenger there are three steps, Belief Formation, Belief Testing and Response Definition > Refining initial belief based on feedback.
What is the Variance-Bias Trade off?
The Variance-Bias trade off indicates that if you are too adaptive ( you reduce bias) you will necessarily increase variance. This means that you might overreact to noise.
How can entrepreneur work with the uncertainty of whether comments about their startup are valid or not? Who talks about it?
Entrepreneurs can be error-oriented. Compared to Erroravoidant, that means that they recognize that embracing the error as a step closer to the final goals. Error avoidant individuals might require more time to improve elements. FUNKEN talks about it.
Which correlations does Eller look into?
Eller looks into the correlations between high-changes and high error orientation, proving that they are a successful combination. Eller also looks into high performance and high monitoring across time. They prove that high performance and monitoring also requires less feedback across time.
What are some forms of pivot in the feedback loop of the lean startup?
When having to pivot in a lean startup situation, entrepreneurs can zoom-in (focus on one feature of the prodcut that becomes the whole product) or add new features. They can change the costumers or address other needs.
