ENTR CHP 7
Why is experimentation required? (2)
(2)to make sure that entrepreneurs have the right assumptions about meeting the demands of potential customers
Angelina makes all purchases of printers and small computers for her company, a company that employs over 1000 people. However, all purchases must be approved by her district vice president. The district vice president would be listed under which of the following customer types?
decision maker
Sabrina just received a toy from her mother for her seventh birthday. She is describing all the things she likes and dislikes about the new toy. What type of customer is Sabrina's mother?
decision maker
What is the term for customers who have a high level of authority in their ability to approve purchases others make due to their high position in the hierarchy?
decision makers
Customers who have the ability to approve large scale purchases are called which of the following?
economic buyers
Sabrina just received a toy for her seventh birthday. She is describing all the things she likes and dislikes about the new toy. What type of customer is Sabrina?
end user
A storyboard is classified as what category of business development tools?
prototyping
Experiments need to have a clear purpose, be achievable, and generate ______.
reliable results
A customer who delays or vetoes the purchasing decision is referred to as which of the following?
saboteur
In general, how many different types of customers are there?
six
A high-level view of thoughts and ideas displayed in sequence through drawings, sketches, or illustrations is called a ______.
storyboard
The best way to conduct an experiment is to ______.
test the product, service, or idea with real customers
A new perfume manufacturer wants to test peoples' reaction to the scent. As people enter a large department store, they are sprayed with the product and asked to fill out a questionnaire in exchange for a free sample. This would be an acceptable way of conducting the experiment.
F
A pilot experiment is a large-scale study to assess the feasibility of a product or service.
F
A written description of a product is a better way to generate discussion from potential customers than a storyboard.
F
Entrepreneurs are more likely to generate new business ideas if they stick to a routine of familiar experiences.
F
Entrepreneurs should avoid experimenting with potential customers.
F
Experiments do not have to have a clear purpose; they only need to be observed and have an outcome.
F
Experiments do not need to be completed in order to produce results.
F
If the experiment fails to deliver the results the entrepreneur anticipated, the experiment is a failure.
F
Observations are not acceptable data in an experiment.
F
One of the disadvantages of storyboarding is that it requires artistic talent.
F
The customers who actually buy, use, and give feedback on your product are called decision makers.
F
When there is insufficient data available, intuition and experience are reliable to use to make decisions.
F
What was the first step of experimentation that the founder of Amazon began using the process to assess online business opportunities?
He asked questions about shopping behavior and mail order shopping.
What did the founder of Amazon come to discover that encouraged him to begin the scientific process?
He read about the huge growth of Internet usage.
The main problem with analyzing historical data is that ______.
Historical data can provide insight into past behaviors, but may not predict behavior in new environments.
Which of the following is the main problem regarding intuition in the role of decision making?
It does not provide evidence to support the idea.
What is necessary for a prototype to be effective?
It must communicate what our ideas look like, behave like, and how they work.
What do the authors suggest about using data that was not specifically gathered to test the hypothesis?
It should not be ignored. Keep track of everything.
What hypothesis did Subway marketers make during the 2008 recession?
Selling foot-long subs at the reduced price of $5 would increase sales.
A prototype is often created before a pilot test is conducted.
T
A true experiment identifies a clear hypothesis.
T
An entrepreneur following the scientific process of experimentation should conduct background research before forming a hypothesis.
T
Entrepreneurs have more freedom to experiment than larger organizations, as they have less to lose.
T
For a prototype to be effective, it must communicate what our ideas would look like, behave like, and how they work.
T
Taking apart a product or a process to understand how it works can help an entrepreneur generate new ideas.
T
The main problem regarding experience in the role of decision making is that some new ideas are better than convention or what we thought we knew.
T
Using historical data will only provide insights into past behaviors—they cannot predict how people might react to new products and innovations.
T
When gathering data about customers, it is almost impossible to observe direct outcomes of advertising.
T
Kristin is a buyer for a local Costco. She is interested in having your line of one-of-a-kind jewelry displayed during a weekend promotion. However, her supervisor, Dave, says they have had too many unsuccessful jewelry displays lately and he does not want to present the idea to the store manager. What type of customer is Dave?
a saboteur
If an experiment outcome indicates that the original hypothesis was incorrect, what should the entrepreneur do?
adapt the original assumption
In designing experimentation opportunities, on which of the following should the entrepreneur focus?
all of these
What is the advantage of storyboarding that makes it so effective?
all of these
Who is credited with developing the idea of storyboarding?
Walt Disney
A city is suggesting that homeowners participate in a mandatory recycle program. Which of the following would most likely be sketched as the benefit (remember that storyboards are from the customer's perspective)?
neat recycling bins placed near the curb and a happy resident
As an entrepreneur, one should think like a scientist and ______.
not put as much time or precision in experiments as a scientist would
What are the elements in the framework for storyboarding?
problem, solution, benefit
Which of the following is an important benefit of experimentation?
Assumptions are validated or proven false.
What question is asked when an entrepreneur draws conclusions from the results of the data analysis?
Do the results support the hypothesis?
Why do some organizations discourage experimentation?
They fear failure or incurring short-term loss.
How did Subway carry out their experiment to test the effect of $5 subs?
They tested the price of the sub at selected stores for a limited period of time.
In experimentation, an entrepreneur's goal should be to do which of the following?
Use continual iteration to test and shape ideas.
What is a hypothesis?
an assumption tested through experimentation
Carmen has recently published her first book and is delighted when she sees an A-list actor praising it on a morning talk show. What kind of customer is the actor?
an influencer
Sarah is a musician who is frequently photographed for celebrity magazines. Readers often inquire about where to buy the fashions she is seen wearing in the photographs. What kind of customer would Sarah be?
an influencer
Sean is thinking about creating an automatic cat feeder similar to one that he created for dogs. He talks to several cat owners to find out what they dislike about feeding their cats. He also takes a look at current cat feeders and asks the same cat owners what they like and don't like about the feeders. What is this action called?
asking questions and background research
What is the last step of the scientific process?
assess the results of the data analysis
Anthony is thinking of starting a small hot-dog cart that he will take to the beach area in San Diego, California. Before starting, he investigates city ordinances and talks to vendors in the beach area. He also talks to people at the local parks who sell hot dogs to find out what makes their business successful. Anthony is conducting what stage of the scientific process?
background research
How does one formulate a hypothesis?
by asking questions, conducting background research, and creating theories of what might work
What does one hope the storyboard will do when presented?
generate questions
Taking apart products and putting them together again can be thought of as experimentation because doing so ______.
generates ideas about how we can make our products or services work better
What phase of design thinking is associated with experimentation?
implementation
Sabrina just received a toy from her mother for her seventh birthday. The toy was recommended by her elementary school teacher for its educational value. The teacher has been conducting lectures on educational toys for children. Sabrina's teacher is what kind of customer?
influencer
People with a large following who can affect purchasing decisions are called ______.
influencers
A pilot test ______.
is a small-scale study conducted to assess the feasibility of a product or service
Sean is thinking about creating an automatic cat feeder similar to one that he created for dogs. He believes that cats eat several times a day. He also believes that cats can be trained to come to the sound of a slight ding, indicating that a new tray of food has been opened. He has several friends set out small trays of food, sounding a ding to see if cats will associate the sound with curiosity about the food. This action is called ______.
testing the hypothesis
Anthony is thinking of starting a small hot dog cart that he will take to the beach area in San Diego, California. Before starting, he asks an ice cream vendor if he can offer hot dogs using his stand for a small rental fee. He will only need to use space for one day. Anthony is conducting what stage of the scientific process ?
testing the hypothesis by running an experiment
The owner of Amazon.com developed a site for a relatively low cost and offered books on the site. What stage of the scientific process was the owner executing by doing this?
testing the hypothesis by running an experiment
In storyboarding, who or what is at the center of the story?
the customer
Rather than just gathering data, an experiment matches an outcome to which of the following?
the hypothesis
Which of the following participant right is an ethical requirement when performing an experiment?
the right to informed consent
The first step of the scientific process for an entrepreneur is which of the following?
to ask a lot of questions
Why is experimentation required?
to strengthen ideas
The ability to make connections, expand our knowledge, and become more innovative is often the result of which of the following?
trying out new experiences and learning new skills
How should an entrepreneur approach experimentation?
use quick, low cost methods of experimentation informed by scientific thinking
