Entra 320 Essay Question

What are the differences between a "small business idea" and an "entrepreneurial business idea"?

Difference is Entrepreneurial profit. Small Business: no uncertainty, only risk. Entrepreneurial: High Uncertainty, along with high profits.

What is entrepreneurial profit and why is it possible?

Entrepreneurial profit is the compensation for the aptitude and successful effort of a talented businessperson. In bookkeeping, all profit could be credited to this effort. In economics, this is the part far beyond an ordinary profit for normally skillful management.

Joseph Schumpeter describes the entrepreneurial act as an act of creative destruction. What is destroyed and why?

Entrepreneurs create new inventions/innovations as an update to past technology, leaving the past technology in the past leaving them "Destroyed"

Why would an entrepreneur need customer interviews at the ideation/problem development stage? What are the objectives?

Interviews should be done for two reasons: (1) to develop a better understanding of user needs during the inspiration phase of design thinking and (2) to get feedback on ideas during the implementation phase. - The interview must be well-prepared, the customer must be listened to and intelligent questions asked, and the interview must be evaluated when it is over.

What are the differences between invention and innovation? Please give examples of both. Is it possible that an invention is at the same time an innovation? Please explain your response.

Invention: creation of a new technical idea, physical means to accomplish an idea. (Wheel) Innovation: Process translating to social well being economic growth. Specific Market need. (iPhone) No; because there is already an invention of a product where innovation is a rendition of an invention targeted towards a certain market.

What is the problem statement canvas? Why is it important for an entrepreneur?

Problem statement canvas is moving from an initial problem to a business idea. A business idea can be either creative destruction, which is when the entrepreneur creates somethings that moves the market away from equilibrium, or entrepreneurial discovery, which moves the market towards the equilibrium. A business idea can be thought of as an entrepreneurial thought of the creation of a product or service.

What are the three dimensions of novelty within the entrepreneurship context? Please give an example for each dimension.

The three dimensions are technology, market, and business model. Technology ex. new technology at the input, process, and output. Market ex. customer segmentation, market creation, and geography. Business model ex. model to generate revenue, extract revenue from an innovation.

What is the value of a product or service? What defines a value proposition and what are the components of the Value Proposition Canvas?

Value of a product or service refers to the quality of the product/ service in relation to how much you pay for the product or service. Quality does not necessarily refer to the price of the product; quality includes all the non-price attributes that count when making the purchase decisions. It's not absolute, it is relative to competitors. The value proposition is what the consumer gains from utilizing the product/ service. Included in the VPC are the following: Customer Profile, which includes jobs, pains, and gains. Product Value Map, which includes, product and services, pain relievers, and gain creators.