Flashcards in Unit 1 Deck (85):
1
What is Entrepreneurship?
A mindset that is:
opportunity-focused,
risk taking,
innovative,
and growth-oriented.
2
At its core, entrepreneurship is
about...
a novel entry into new or established markets, and about exploiting new or existing products and services.
3
According to Gartner's conceptual framework, the role of entrepreneurship in the economy is affected by?
Three categories of variables:
1. The individual entrepreneur and what he/she brings to process
2. The environment (external variables)
3. The organization (strategic aspects and resources of the new venture)
4
What are the step entrepreneurs go during the venture process?
•Identify an opportunity
• Conduct market research
• Validate a business model
• Acquire resources
• Produce the product or service
• Marketing and sales
• Designing and building a company
• Responding to the environment
5
As the leader, what two roles does an entrepreneur essentially play?
the catalyst: initiating and driving the process.
the ringmaster: in a three-ring (or more) circus, managing the process through all its changes.
6
The entrepreneurial process provides many benefits to society. What are the chief benefits among those?
economic growth, new industry formation, and job creation.
7
In general, entrepreneurial ventures have three primary characteristics. They are:
*Innovative
*Value-creating
*Growth-oriented
An entrepreneurial venture brings something new to the marketplace, whether it be a new product or service. Entrepreneur’s goal
is not small.
8
What numbers in our economy do small businesses according to U.S. SBA definition represent?
-99.7 percent of all employers
-pay more than 45 percent of the total U.S.
private payroll.
-generated 65 percent of net new jobs over the past 15 years.
9
What are the three categories of countries where different Economic development can occur?
• Factor-driven economies
• Efficiency-driven economies
• Innovation-driven economies
10
Survival of businesses has been attributed to:
sufficient capital, having employees, and the entrepreneur’s intention in starting the business.
11
How did entrepreneurship evolve throughout the decades?
1960s: Bigger is better. Diversification. Job security.
1970s: Macroeconomic turmoil. International
competition. Technological revolution. Deregulation.
1980s: Decade of Entrepreneurship: Lean and mean. Takeovers. Anti-diversification. Small firm innovation. *Early internationalizing.
1990s: Information Age. No job security. Fewer benefits. Service firm growth. Creative financing.
2000s: Knowledge Economy. Rebirth of the
commercial. Internet. Renewed interest in biotech/biomed. Low transfer costs. Emergence of new media companies
12
What are the recent economic trends?
• Global economic turmoil
• Green power
• The women’s market
• The internet, social media, and mass mingling
13
What are incremental innovations?
Improvements that are made on existing technologies.
-Schumpeter did not see this as innovation even if they generated economic growth.
14
What is Knowledge economy?
Brought about by increased globalization and competitive shift towards more knowledge-based economic activity.
15
What is Mass mingling?
New trend in the consumer market which uses social media to make it easier to meet up with a lot of people for a common purpose.
16
What is a Nascent entrepreneur?
An individual who has intends to start an independent business.
17
What is a Nascent intrapreneur?
An individual who has intends to start entrepreneurial ventures inside a large corporation.
18
What are Platform technologies?
Technologies that serve as a fertile ground for startup ventures that license the technology and apply it in a number of different ways.
19
What is the fuzzy front end?
the period of time prior to firm birth where evaluation happens and activities undertaken at this point are often unclear and subject to change as more information is obtained.
20
The amount of investment an individual is willing to make in a new product/venture can be explained in what function?
[Inv = f(PS + VS + CF)].
The probability of its success, the value of that success, and the cost of failure
21
Which innovations can find no identifiable market in the earliest stages of development?
disruptive or radical innovations which obsolete previous technology or ways of doing things.
22
Name seven myths of entrepreneurship?
1. Entrepreneurs start businesses solely to make money
2. It takes a lot of money to start a business
3. It takes a great idea
4. The bigger the risk, the bigger the reward
5. A business plan is required for success
6. Entrepreneurship is for the young and reckless
7. Entrepreneurship cannot be taught
23
What are the Paths to Entrepreneurship?
•The home-based entrepreneur
• The serial or portfolio entrepreneur
• The nonprofit entrepreneur
• The corporate entrepreneur
24
What are the things needed for an entrepreneurial mindset to succeed inside a large corporation?
■Senior management commitment.
■A champion or several champions.
■Corporate interoperability (work environment)
■Clearly defined stages and metrics.
■A superior entrepreneurship team.
■Spirit of entrepreneurship.
25
What are the challenges of the entrepreneurial path?
• Finding the right business opportunity
• Needing to work, often with no pay & long hrs.
• Facing uncertainty and high risk
• Having no previous experience on which to rely
• Raising capital and other resources
• Finding the right people for expertise & resources
• Needing to make major decisions affecting others lives
• Dealing with a sense of isolation and disillusionment
• Facing failure at some point
26
What are the opportunities of the entrepreneurial path?
• Becoming independent—taking charge of a career
• Creating wealth
• Doing well while doing good for society
• Doing something the entrepreneur is passionate about
• Creating new jobs
• Supporting the community
27
What are the steps for preparing for Entrepreneurship?
1. Find a mentor
2. Build a professional network
3. Learn about entrepreneurs
4. Understand personality and business
preferences
5. Improve on or acquire new critical skills
6. Study an industry
28
What is networking?
Exchanging information and resources
• Strong Ties
• Weak Ties
• Brokering
29
Name some of the key networking contacts in a business.
• Friends and Family Investors
• Key Angel Contact > Angel Investors
• Professional Service Providers
• Key Production Contact > Engineers - China
30
Name the barriers to self-employment:
• Financial needs
• Lack of confidence
• Lack of skills
• Personal or family issues
• Time constraints
• Startup logistics
31
Name some of the critical Entrepreneurial skills:
• Decision making
• Written and oral communication
• Calculated risk taking
• Analysis and critical thinking
• Resource gathering
• Persuasion and negotiation
• Opportunity recognition
• Organizational and time management
• Leadership and people management
• Storytelling
32
What is a Serial entrepreneur?
Entrepreneur who starts one business and then moves on to start another.
33
What is Skunk works?
Autonomous group that is given the mandate to find and develop new products for the company that may even be external to the company’s core competencies.
34
What are the entrepreneur strong ties?
The entrepreneur’s close friends and family members whom he or she knows well.
35
What are the entrepreneur weak ties?
The entrepreneur’s acquaintances and business contacts.
36
What is the value chain?
all the businesses involved in the production of a product or service from raw materials through delivery to the final customer.
37
What is creativity as it relates to an entrepreneur?
the basis for invention-discovering something that did not exist previously. A critical skill for recognizing or creating opportunity in a dynamic environment.
-Creativity enables entrepreneurs to differentiate their businesses from competitors.
-it also fundamental to problem solving
38
What is innovation?
finding a new way to do something or improving on an existing product or service.
39
What are the four general themes of creativity?
1. Characteristics of creative people
2. Activities creative people undertake
3. Products creative people produce
4. The environment or context for creativity.
40
Name Wallas' Four stages of creative process?
1. Preparation: looking at a problem from a variety of perspectives
2. Incubation: letting the problem lie in the subconscious for a time
3. Illumination: the discovery of a solution
4. Verification: bringing the idea to an outcome
41
What are Norman Seeff's Seven Stage Dynamic of the Creative Process
1. Hearing the Call
2. Fear and Resistance
3. Resolution
4. Turning point
5. Creation
6. Manifestation
7. Fulfillment
42
What are the challenges to creativity?
• No time for creativity
• No confidence
43
What are good steps to take to develop creative skills?
1. Design and be in an environment to stimulate creativity
2. Log ideas
3. Put the familiar into a new context
4. Take advantage of a personal network
5. Return to childhood
44
What are the best way to be creative for problem solving?
1. Define the problem(inc. develop a decision tree)
2.Generate ideas for sources of the problem and potential solutions
3. Other techniques for generating ideas: Brainwritting, Attribute identification, etc.
45
Techniques to focus on problem definition:
• Use affirmative judgment
• Use a set of predefined criteria
• Effective problem statement contains
1. A “how” question
2. Identification of responsible party
3. Action verb, representing positive course of action
4. Targeted or desired outcome
46
Techniques to develop solutions:
• Use same techniques used to generate and focus
ideas
• Criteria plays critical role in solution identification
-Explicit: time limits, budgets, constraints
-Implicit: considerations such as intuition,
team culture, preferences, prejudices, etc.
47
Name Joseph Schumpeter's five categories of innovation.
1. A new product or substantial change in an existing product
2. A new process
3. A new market
4. New sources of supply
5. Changes in industrial organization
48
List the The Innovation and Commercialization Process steps:
1. Source: Discovery, Invention, Market Need
2. Research
3. Prototype
4. Validation
5. Production
6. Launch
7. Diffusion, Adoption, and Response
49
Name some of the sources of innovation discussed in the book.
• Customers
• Observation
• Unexpected news events
• Trends and patterns of change
• New government regulation
• Newspapers and magazines
• Emerging industries
• Demographic shifts
• Small businesses
• Business operations
50
What is Affirmative judgment?
Looking for the strengths or positive aspects of a problem definition first.
^move up
51
What is Brainwriting?
Getting ideas down on paper and then organizing ideas and creating themes.
52
What is Commercialization?
Process that moves an innovation from the laboratory to the market and develops the business strategy
^move up
53
What are the two identified fundamental
theories to explain how opportunities happen?
Creation theory: Entrepreneurs create opportunities via their actions, reactions, and experiments around new products, services, and business models.
Discover theory Opportunity arises from shifts in external factors in the market or industry.
54
List the Five questions that form the basis for development of the business model.
1. What is our mission?
2. Who is our customer?
3. What does our customer value?
4. What are our results?
5. What is our plan?
55
List all of The Business Model Components it addresses.
-Pricing Model
-Revenue Model
-Value Proposition
-Process
-Internet Commerce.
56
What are the reasons why business models fail?
• Flawed logic
• Limited strategic choices
• Imperfect value creation and capture assumptions
• Incorrect assumptions about the value chain
57
What is a business concept?
A concise description of an opportunity that contains four essential elements
1. the customer definition
2. the value proposition
3. the product/service
4. the distribution channel.
58
What is an Elevator pitch?
Term applied to the idea of entrepreneurs have only a few seconds—the time it takes to ride an elevator up to the twelfth floor of a building—to get an investor interested in the entrepreneur’s business concept.
-Must be a clear and concise concept. Requires ability to parse words.
59
What is a Business model?
A model that is created once the business concept is identified; it addresses how the company creates value for the customers and what the organization must do to become or remain viable.
60
What is the Value proposition?
The benefit that the customer derives from the product or service the entrepreneur is offering.
-Entrepreneur needs to identify the need or
“pain” the customer is experiencing
61
Who is the customer and what is important to know about your relationship with them?
• The customer is the one who pays for the solution are offering them.
• The customer determines:
1. What the entrepreneur will offer
2. What the value proposition is
3. How the benefit will be delivered to the
customer
62
What is the distribution channel?
answers the question “How do you deliver the benefit to the customer?”
63
What is the concept of The Entrepreneur's Story?
• A compelling story that gives meaning to the venture and the audience a reason to invest. It has a beginning, middle, and end.
1. How they identified or created the opportunity
2. Challenges they overcame
3. Where they are now
64
What are the important question that needs to be asked when building a business model?
1. What are the size and importance of revenue streams?
2. What costs most affect the model, and what is their size and importance
to the model?
3. How much capital is required to execute the business model?
4. What are the critical success factors to achieving the goals?
65
What changes can occur to a business model?
• Incrementally expand the existing model
• Revitalize an established model
• Take an existing model into new areas
• Add new models via acquisition
• Use existing core competencies to build new business models
• Reinvent the business model
66
What are the steps to building a business model?
1. Identify position in the value chain
2. Calculate how to create value for the customer(rely on market research)
3. Identify all sources of revenue and their drivers(subscription, licensing, etc)
4. Determine expenses and cost drivers
5. Develop the competitive advantage:
Differentiation, Niche, Access
6. Test the model through feasibility analysis
67
What is the value chain?
The value chain consists of companies that contribute to the development and distribution of a good.
-Upstream is the top of the value chain such as suppliers/ producers of raw materials.
-Downstream refers to the intermediaries such as distribution and retailers.
68
List some of the expenses and cost driver.
•Marketing or advertising
•Inventory
•Office or retail space
•Support centered
•Direct costs
69
Effective competitive strategies either:
1. Differentiates the new venture from existing ventures
2. Creates a niche in the market that other companies are not serving
3. Has access to other resources that others in the industry do not
70
What are the determinations of whether the business model appears feasible?
1. What is the probability a change in the forecast will occur
2. What is the magnitude of the change if it occurs
3. What is the impact of the change on the business
4. What can be done to mitigate the change or reduce the impact substantially
71
What is a Commitment pyramid?
A depiction of the relationship between the location of a business in the value chain and the time commitment, level of risk, and financial capital required.
72
What is feasibility analysis
Tool that is used to assess and reduce risk at startup:
-Industry Analysis (value chain)
-Market Customer Analysis (value proposition)
-Financial Analysis (revenue model, cost model, pricing model)
-Product Service Analysis (Business Process)
-Competitive Analysis (competitive strategy)
73
Name the three critical success factors for any business.
1. Is there a customer and market of sufficient size to make the concept viable and able to grow?
2. Do the capital requirements to start and operate to a positive cash flow make sense?
3. Can an appropriate startup or founding team be assembled to effectively execute the concept?
74
What areas are analyzed in the feasibility test?
1. Industry and market/customer
2. Product/service
3. Founding team
4. Financial needs assessment
75
What are Intermediaries?
When services or products aren’t delivered directly to the customer, they often go through distributors and retailers.
76
What is Keystoning?
When a retailer charges twice as much for an item as it cost to purchase the item from the distributor or sales rep.
77
What is Markup?
The price increase that occurs at each stage in the value chain.
78
What is a Transaction fee?
Costs associated with distribution.
79
_____ entrepreneurship is characteristic of small lifestyle businesses.
replicative entrepreneurship, Unlike innovative entrepreneurship.
80
The best question to ask to define a problem is?
“what is the source of the problem?”
81
Responding to this entrepreneurial drive, big business in the 1980s found it necessary to downsize and reverse the trend of...
trend of diversification it had promulgated for so long.
82
The process of new venture formation is characterized by ____ stages and ___ transition points or decision points.
four stages and three transition points.
83
An entrepreneur’s ____ are the foundation for the business and are always reflected in the business and in the way customers are treated.
Allen, Kathleen R. (2011-06-01). Launching New Ventures: An Entrepreneurial Approach (Page 42). Cengage Textbook. Kindle Edition.
core values
84
______ is very different from a business model because it considers more than the customer and how the new venture will create and capture value; it considers the competition.
Strategy
85