SE Chapter 4

What is a pilot test?

- A preliminary run of a business, sales, effort, program, or website with the goal of assessing how well the overall approach works and what problems it might have - low-cost, low-risk approach to testing feasiblilty

What does A in SCAMPER stand for?

- Adapt - Think about what could be adapted from products or services that already exist

What are the parts of the financial projections in the feasibility study?

- Assumptions (list all assumptions in which you're basing your financials) - Summary financial table (develop basic three-year summary including: revenues, COGS, gross margin, operating expenses, and net profit) - Three-year detailed financials (details from above step) - Start-up budget (provide list of all costs)

What does C in SCAMPER stand for?

- Combine - Think of the possible products, services, or business combinations you can make that result in something entirely different

What are the parts of the business idea in the feasibility study?

- Description of your business (describe your product/service concisely) - Your Customers (get demographics and learn what you can about customers) - Trends related related to the product or service (how will you stay relevant and what trends in product use are in the future?)

What does the E in SCAMPER stand for?

- Eliminate - Search for opportunities that arise when you get rid of something or stop doing something

What does the P in SCAMPER stand for?

- Put to other uses - Think of ways you could generate a high number of opportunities for your product or service beyond what it is traditionally used for

What does R in SCAMPER stand for?

- Rearrange or reverse - What can you rearrange in the way your product or service appears, or the way businesses in your industry usually look or are decorated or located

What does S in SCAMPER stand for?

- Substitute - Think of what you might substitute for something else to form a new idea

What is the screening process in the causal model of entrepreneurship?

- The goal is to start with lots of ideas and narrow them down to a few - Test ideas with an IDEO screen, a business model canvas, or a feasibility plan - Develop a business plan for the most promising ideas

What are traditional problems facing new products or services?

- The idea cannot be economically made Ito a product/service - The resulting product/service works, but lacks a large market appeal - The product/service works, has a market, and could be profitable, but you need to get additional people, funding, and other resources

What are the ten sources of business ideas?

- Work/personal experience - A similar business - Chance — retail arbitrage - Family and friends - Education or expertise - Magazines - Idea sites - Side gigs - Make and sell, locally or online - Going online to spot trends

What is the opportunity identification process?

- assesses whether the situation is traditional or unexpected/changing

What are the parts of the business in the feasibility study?

- description of the entrepreneur or team (what do you bring to this idea or business; developed from technical feasibility and business validity sections from IDEO screen) - Stage of development (where are you in the process) - Legal issues (list any patents, copyrights, licenses, franchise agreements or government regulations) - Insurance Requirements (research liability involved)

What does M in SCAMPER stand for?

- magnify or modify - Taking an existing product and changing its appearance or adding more features or increasing the hours your store is open or making its advertising more dramatic are some examples

What are the parts of the product or service in the feasibility study?

- product/service description (describe product simply, using photos or drawings) - the competition (consider direct and indirect competitors who may a substitute) - Competitive advantage (consider what they are, why they exist, and how they will help you succeed) - Market penetration (describe all the ways you reach your customers)

What are the parts of the future action plan in the feasibility study?

- summary feasibility evaluation (confirm idea, hold off until you learn more, or realize idea is not feasible) - Next Steps (depends on previous step) - Start-up capital (list money needed) - Sources of start-up capital (consider all sources, like persona savings or family and friends)

What are the five parts to the feasibility study outline?

1. Business Idea 2. The Product/Service 3. The Business 4. Future Action Plan 5. The Financial Projections

What is the four step model for the effectuation model of entrepreneurship?

1. Feel 2. Check 3. Plan 4. Do

What are the five major pitfalls?

1. Identifying the wrong problem 2. Judging ideas too quickly 3. Stopping with the first good idea 4. Failing to act 5. Obeying rules that don't exist

What are the four steps for organizing creative thinking created by Graham Wallas?

1. Preparation 2. Incubation 3. Illumination 4. Verification

What percent of new businesses first had the decision/desire to start a business (effectual)?

23%

What percent of new businesses first had a business idea (causal)?

36%

What percent of businesses first simultaneously had an idea and decision to start a business?

41%

What is design thinking?

A customer-focused approach using interviews, observation, and exercises to create products and services that provide demonstrated evidence of solving customers' problems

What is a customer segment?

A group or subgroup of potential purchasers that can be approached in a coherent manner

What is brainstorming?

A group thinking technique where you ask participants about a situation or a product or a service. You ask them to tell you all the things that come to mind when they think of that situation, product, or service

What is painstorming?

A group thinking technique where you ask participants about a situation, product, or service they experienced. You ask them to tell you all the things about that experience that were suboptimal -- what was wrong, what didn't work well, what caused pain or discomfort, what could have been better

What is creativity?

A process producing an idea or opportunity that is novel and useful, frequently derived from making connections among distinct ideas or opportunities

What is the IDEO screen?

A technique for conducting a fast initial analysis of ideas for their potential. It looks at three elements -- market desirability, technical feasibility, and organizational viability

What is A/B testing?

A way to check customer reaction to websites describing your product or service. Two versions (version A and version B) of the site are posted and are served up randomly to prospective customers. The version of the website that gets the most commitments from customers is the one kept and the less attractive site is revised and the two versions tested until one revision gets consistently superior customer reactions.

What is imitative strategy?

An overall strategic approach in which the entrepreneur does more or less of what others are already doing

What is a gain?

Any sort of outcome (a product, service, outcome, or situation) customers or potential customers would like to encounter or be able to depend on. It is one of two driving forces of creating new products or services

What is the check step of the effectuation model?

Assess what you know and who you know to determine your product or service and your customers

What is technical feasibility?

Can the solution really solve the problem, and can we make it

What is business viability?

Can we make the solution and make money doing it?

What is the feel step of the causal model?

Decide you have a great idea and want to go into business to make it happen

What is market desirbalilty?

Do people (your customers) really want the solution being offered?

What is the feasibility study?

Evaluates the potential of a business opportunity by studying five primary areas in depth: the overall business idea, the product/service, the industry and market, financial projections (profitability), and the plan for future action.

What is the plan step of the causal process?

If the idea is feasible, plan for making and selling it, checking with potential customers to make sure they will buy it. If you get enough interest, keep going. If not, go back to the check step

What is the do step of the effectuation model?

If you get enough sales, keep going. If not, go back to the check step

Look at the business model canvas approach

Look at the business model canvas approach

What is the feel step of the effectuation model?

Recognize you want to do or make something through a business

What is value proposition?

Small business owners' unique selling points (also known as benefits) that customers can expect from your goods or services, including benefits that differentiate your offering from those of the competition

What is feasibility?

The extent to which an idea is viable and realistic and the extent to which you are aware of internal (to your business) and external (industry, market, and regulatory environment) forces that could affect your business

What is the licensee?

The person or firm that is obtaining the rights to use a particular piece of intellectual propoerty

What is the licensor?

The person or organization that is offering the rights to use a particular piece of intellectual property

What is the incubation step for organizing creative thinking?

Thinking about the problem or opportunity in a "not-conscious" way, putting it on the back burner, so to speak

What is the effectuation model of entrepreneurship?

You start with what you have -- your skills, knowledge, and networks, and what needs you see that you can meet by using what you have. You talk to the people you know to find out if they can commit to your idea. If not, find out what they need, and which of those needs you can do something about.

What is Federal Labs?

a centralized location for over 700 federal programs

What is a license?

a legal agreement granting you rights to use a particular piece of intellectual property

What is a royalty?

a payment to a licensor based on the number or value of licensed items sold

What is entrepreneurial alertness?

a special set of observational and thinking skills that help entrepreneurs identify good opportunities; the ability to notice things that have been overlooked, without actually launching a formal search for opportunities, and the motivation to look for opportunities.

What is SCAMPER?

an acronym for a set of cues that trigger new ideas for your business

What is a pain?

any sort of problem, annoyance, source of aggravation, shortcoming, or suboptimal situation customers or potential customers face. It is one of two driving forces of creating new products or services.

What is the check step of the causal model?

assess you ability to understand it and create it yourself. Get help if needed. Then assess the technical feasibility of the idea

What is the illumination step in organizing creative thinking?

bringing ideas together to spark new insights

What does the opportunity recognition process often involve?

creative thinking that leads to discovery of new and useful ideas

What is the preparation stage for organizing creative thinking?

exploring the problem or opportunity from all directions

What is the do step of the casual process?

make the product or service and the company to sell it and get it into the market

What is the plan step of the effectuation model?

offer your product or service to your customers and see if you get any sales

What is a radical innovation strategy?

rejecting existing ideas, and presenting a way to do things differently

What is opportunity recognition?

searching and capturing new ideas that lead to business opportunities

What is incremental strategy?

taking an idea and offering a way to do something slightly better than it is done presently

What is the verification step in organizing creative thinking?

testing the idea and reducing it to its most exact form

What is conversion rate?

the measure of how many visitors to your website (or people who click in on your online advertisement) are actually willing to make a commitment to the product or service promoted on the site.

What areas does the feasibility study consist of?

the overall business idea, the product/service, the industry and market, financial projections, and the plan for future action

What are powerful but rarely used sources of ideas?

universities and government agenices

What are the ways the licensee can pay the licensor?

up-front payment, annual fee, or royalty per item sold

What are business models?

ways to identify and organize key information on organizations and how they achieve their goals

What is the causal model of entrepreneurship?

you want to create a particular product or service that does not yet exist, and to achieve that end, you have to cause the product or service to exist. This can mean you will have to learn new skills, or find others to help you achieve your end.