Entrepreneurship Exam 1

What four elements are used to separate ideas from opportunities?

1. Attractive 2. Timely 3. Durable 4. Accorded in a product, or service, or business that creates or adds value for its buyer and end user.

Know five feasibility determining questions used to "select a solution"?

1. Can it be implemented in a reasonable time? 2. Can it be done within cost limits? 3. Will it work reliably? 4. Will it use staff and equipment efficiently? 5. Is it flexible enough to adapt to changing conditions?

Recognize examples of each force or trend used to identify opportunity gaps.

1. Economic forces a. Example- A weak economy favors start-ups that help customers save money. 2. Social forces a. Examples: i. Aging populations ii. Increasing workplace diversity iii. Increased participation in social networks iv. Growth in uses of mobile devices v. Increasing focus on health and wellness 3. Technological advances a. Examples: i. Computer industry ii. Internet iii. Biotechnology iv. Digital photography 4. Political and regulatory changes a. Examples: i. Laws enacted to protect the environment have created opportunities for entrepreneurs to start firms that help other firms comply with environmental laws and regulations. (OSHA)

What are the four categories identified for opportunity recognition and observing trends?

1. Economic forces 2. Social forces 3. Technological advances 4. Political and regulatory changes

What are the five steps/stages of "design thinking" provided by Stanford's d.School?

1. Empathize 2. Define 3. Ideate / brainstorm 4. Prototype 5. Test

What are the three processes used to identify an opportunity?

1. Observing trends 2. Solving a problem 3. Finding gaps in the market place

Know the four main elements of a framework for feasibility analysis.

1. Product/Service Feasibility 2. Industry/Target Market Feasibility 3. Organizational Feasibility 4. Financial Feasibility

What are the five elements of the sense making mindset?

1. Sense changing conditions 2. Seeing in overviews 3. Foreseeing trends 4. Reframing problems 5. Forming an intent

Know the 8 critical elements used to determine financial feasibility

1. Steady and rapid growth in sales during the first 5 to 7 years in a clearly defined market niche 2. High percentage of recurring revenue — once a firm wins a client, the client will provide recurring sources of revenue 3. Internally generated funds to finance and sustain growth 4. The existing alternatives for the money being used (invested) 5. Availability of an exit opportunity for investors to convert equity to cash 6. The amount of capital invested 7. The risks assumed in launching the business 8. The existing alternatives for the entrepreneur's time and efforts

What are the three considerations used to assess a concept statement?

1. Total Start-Up Cash Needed 2. Overall Financial Attractiveness of the Proposed Venture 3. Financial Performance of Similar Businesses

What are the four phases of the convergent/divergent business problem solving process?

1. What is? 2. What if? 3. What wows? 4. What works?

What are the two "basic principles" of entrepreneurial problem solving?

1. acknowledge and act upon human need for meaning and connectivity - analyze + engage. 2. apply the appropriate level of inquiry and analytical-based synthesis - diagnose + inquire

Know the 6 steps of scientific experimentation

1. ask lots of questions 2. ask lots of questions 3. develop hypotheses 4. test by running experiments 5. analyze the data 6. assess the results

What are four key questions to ask when assessing idea feasibility?

1. does your idea make sense - something real customers will buy? 2. does it exploit a trend, solve a problem, or fill a gap in the marketplace? 3. have you defined the basic product or service and developed a design concept? 4. what is the timeliness and durability in context of the current and future marketplace?

What are the five elements of a concept statement?

1. product: a description of the product/service - details the features and benefits - napkin sketch 2. why: creating value - a description of the benefits or value created and how the concept solves a specific problem 3. competency: brief description of the "idea's" management team 4. target market: a defined target market - list of consumers or businesses expected to buy the product/service 5. special feature: how will the product/service be positioned relative to competitors

Know the five qualities for identifying industry attractiveness.

1. young vs. old 2. fragmented vs. concentrated 3. growing vs. shrinking 4. "must have" vs. "want to have" 5. high margin vs. low margin

What are the five trends shaping the modern entrepreneurial landscape?

1] Be disruptive and experimental 2] Sense of purpose - purpose beyond profit 3] Personalization vs. privacy - build brand value 4] Collaborative culture - information sharing and creativity 5] Storytelling - transparency, authenticity and engagement

Know the three overviews of effectual thinking.

1] Effectuation is an idea with a sense of purpose 2] Effectual reasoning is a type of human problem solving 3] Effectuation is a logic of entrepreneurial expertise

Know the four worldviews (outlooks) of entrepreneurial thinkers.

1] They fabricate as well as recognize new opportunities 2] They make rather than find markets 3] They accept and leverage failure through iterative processes 4] They create the future rather than simply trying to predict

How do we define opportunity in this course?

An opportunity is a favorable set of circumstances that creates a need for a new product, service, or business. K.I.S.S.-Embrace simple solutions, to a specific problem, for a specific segment.

Know the basic actions used to determine desirability.

Ask questions in order to determine desirability.

Know the two basic elements associated with seeing "system overviews".

CONTEXT - the circumstances + events in a situation in which something happens - comprised of (i) the things people use (ii) services they subscribe to (iii) the brands that surround them (iv) the markets they are apart of (v) and the policies that govern their transactions. FORCES - trends - people's changing preferences - availability of resources

Know the difference between causation and effectuation.

Causation - the focus is on achieving a desired goal through a specific set of given means. Effectuation - the focus is on using a set of evolving means to achieve new and different goals

What is the academic definition of Entrepreneurship?

Entrepreneurship is the process by which individuals pursue opportunities without regard to resources they currently control (Stevenson & Jarillo).

Understand the various aspects of the "implementation phase"

IMPLEMENTATION PHASE- focuses on early, fast, low-cost testing and experimentation to strengthen ideas and ensure that entrepreneurs are on the right path toward meeting the needs of their potential customers. Validating assumptions, taking action, getting out there.

Know the two primary ways people enter an entrepreneurial path.

Path 1 Many begin with the desire to be an entrepreneur and then go searching for an idea that will help them realize that ambition - people who want to be their own boss or have more control over their lives (self-actualization) - who want to work with a specific team, or who want to build the company they always wanted to work for encompass this group. Path 2 Others begin with an idea and slowly find their way to an entrepreneurial identity - this group includes people trying to solve a particular problem - who stumble across an idea - who make a discovery or realize a new technology - this group often identifies more with a particular industry or core subject area.

What label do we attach to the varying degrees of corporate entrepreneurship?

Proactive, innovative, risk-taking.

Know the two elements of understanding "frontiers".

SEEK - information about advanced developments - techniques, or knowledge surrounding your topic of interest. IDENTIFY - underlying forces and conditions that cause or influence the formation of these frontiers.

What forms the basis for defining corporate entrepreneurship?

The conceptualization of entrepreneurship at the firm level - all firms fall along a conceptual continuum ranging from highly conservative to highly entrepreneurial - proactive, innovative, risk-taking (Pearson).

Know the definition of "opportunity recognition".

The process of perceiving the possibility of a profitable new business or a new product or service - opportunity cannot be pursued until it is recognized.

Know the three basic phases associated with understanding "context".

[Phase 1] of our focus is to understand what in the past has led to where we are now. [Phase 2] is to constantly understand the flux - local to global and narrow to broad - always seeking a different perspective. [Phase 3] is to reduce the complexity while increasing your understanding.

What is entrepreneurial "problem solving"?

a multi-functional and multi-perspective approach helps eliminate the complexity and clutter so we can focus on the basics of human needs and human problems.

What is the purpose of industry/market feasibility?

industry/market feasibility provides an estimation of overall attractiveness.

What is the focus of organizational feasibility?

organizational feasibility evaluates the prowess, ability, or competency of the initial management team.

What are the five phases of the "creativity" framework according to Barringer et al.?

preparation incubation insight- eureka moment evaluation elaboration

What is the purpose of product/service feasibility assessment?

translates expectations of desirability and demand.

What are the four principles of effectuation?

• Bird in Hand Principle - Start with your means. Don't wait for the perfect opportunity. Start taking action, based on what you have readily available: who you are, what you know, and who you know. • Affordable Loss Principle - Set affordable loss. Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside. • Lemonade Principle - Leverage contingencies. Embrace surprises that arise from uncertain situations, remaining flexible rather than tethered to existing goals. • Crazy-Quilt Principle - Form partnerships. Form partnerships with people and organizations willing to make a real commitment to jointly creating the future--product, firm, market--with you. Don't worry so much about competitive analyses and strategic planning.

What are the four labels applied to "entrepreneurial thinking"?

• Choose your mindset • Be determined • Relationships • Be bold

Know the five defining periods of "entrepreneurship" in the U.S.

• Colonial America (pre-1776) "Emergence of the self-made man" • First Industrial Revolution (1776-1865) "An entrepreneurial nation - the U.S. constitution, a launch pad for creativity and innovation." • Second Industrial Revolution (1865-1920) "Pinnacle of entrepreneurship - new innovations, businesses, and inventions satisfy a growing market and demand for technical innovation." • Interwar and Postwar America (1920-1975) "Rise of institutional America - signalling a shift from the traditional entrepreneur to the big corporation." • Knowledge Economy 1.0 (1975-Present) "Confined re-emergence - the rise of information technology, advanced software development, biotech and medical research, and new materials drove transformations in the economy creating new markets and new business opportunities - the 'tech entrepreneur' was born."

Know the three primary reasons people list for why they want to start a new venture.

• Desire to be their own boss • Desire to pursue their own ideas - self-actualization • Pursuit of financial rewards

Know the three common areas entrepreneurial activity has an economic impact.

• Innovation Defines the process of creating something new, which is central to the entrepreneurial process - small innovative firms are 16 times more productive than larger innovative firms in terms of patents per employee - adaptive operating system vs. command and control. • Job Creation Small businesses create a substantial number of net new jobs each year in the U.S. - firms with 500 or fewer employees create 65% of new jobs on an annual basis. • Impact New innovations make our lives easier, enhance productivity, improve health etc. - many small firms have built entire business models around producing products and services to help larger firms (B2B) - more efficient and effective.

What are the five most common myths about entrepreneurs?

• Myth 1 - Born, Not Made • Myth 2 - Gamblers • Myth 3 - Money Chasers • Myth 4 - Young and Energetic • Myth 5 - Love of the Spotlight

Know the commonly recognized characteristics of successful entrepreneurs.

• Passion for the Business- Passion is the number one characteristic shared by successful entrepreneurs - this passion most typically stems from the belief that the business will positively influence people's lives. • Product + Customer Focus- A second defining characteristic of successful entrepreneurs is a product + customer focus - most often this keen focus on products and customers typically stems from the fact that most entrepreneurs are at heart craftspeople. • Tenacity Despite Failure- Due to the corollary nature of starting something new, the failure rate is naturally high - a defining characteristic is the ability to persevere regardless of setbacks and failures. • Execution Intelligence- The ability to fashion a solid business idea into a viable business is a key characteristic of successful entrepreneurs.

Know the three types of innovation featured in the framework for Entrepreneurial Thinking (venn diagram).

• People (desirability) • Business (viability) • Technology (feasibility)

What are the three most common types of new venture "firms"?

• Salary-Substitute Firms- firms that basically provide their owner or owners a similar level of income to what they would be able to earn in a conventional job. • Lifestyle firms- firms that provide their owner or owners the opportunity to pursue a particular lifestyle, and make a living out at it. • Entrepreneurial Firms- firms that bring new products and services to the market by creating and seizing opportunities regardless of the resources they currently control.