Exam #1 - ENT 401 (Chapter 4) Small Business Ideas: creativity, opportunity & feasibility
customer segment
A group or subgroup of potential purchasers that can be approached in a coherent manner.
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.
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.
opportunity recognition
Searching and capturing new ideas that lead to business opportunities. This process often involves creative thinking that leads to discovery of new and useful ideas.
value proposition
Small business owners' unique selling points that will be used to DIFFERENTIATE their products and/or services from those of the competition.
conversion rate
The measure of how many visitors to your Web site are actually willing to make a commitment to the product of service promoted on the site
licensor
The person or organization that is offering the rights to use a particular piece of intellectual property
license
a legal agreement granting you rights to use a particular piece of intellectual property
target market
a marketing term (also called serviceable obtainable market or SOM) that refers to the group of customers in the area you plan to serve who would be likely to be interested in your product, or those of competitors. Target markets can refer to individuals or market groups called segments.
royalty
a payment to a licensor based on the number or value of licensed items sold
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
creativity
a process producing an idea or opportunity that is novel and useful, frequently derived from making connections among distinct ideas or opportunities
business models
a way to identify and organize key information on a business and how it achieves its goals. Can be analytic tolls (like a business model canvas) or a way to do business (like the "razor and blade" business model)
imitative strategy
an overall strategic approach in which the entrepreneur does more or less what others are already doing
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. One of two driving forces of creating new products or services, which the other driving force being PAIN
pain
any sort of problem, annoyance, source of aggravation, shortcoming, or suboptimal situation customers or potential customers face. One of two driving forces of creating new products or services, which the other driving force being GAIN.
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
4 step process - decrease risk in causal model of entrepreneurship
feel check plan do
Causal model of entrepreneurship
one of two approaches to think about entrepreneurship (the other is effectuation) the causal approach is one in which 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.
radical innovation strategy
rejecting existing ideas, and presenting a way to do things differently
RBI Screen
stands for "really big idea" and is a fast technique for making initial assessments (called screens) of prospective business ideas based on five questions. One of the simplest and fastest ways to screen ideas Approach comes from Alex Bruton
incremental strategy
taking an idea and offering a way to do something slightly better than it is done presently
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
RBI Screen
this is one of the simplest and fastest ways to screen ideas
pain and gain
what are the 2 driving forces of creating new products or services?
preparation incubation illumination verification
what are the 4 steps of Graham Wallas' process for organizing creative thinking?
freemium
freemium is an approach to pricing, and a business model that connects free and premium products or services. typically a free version is offered and users have the option to pay to move up to premium features. examples: Dropbox (5GB free, pay for more storage) Angry birds (free ad-supported version, paid version removes ads)
licensee
the person or firm which is obtaining the rights to use a particular piece of intellectual property
1. identifying the wrong problem 2. Judging ideas too quickly 3. Stopping with the 1st good idea 4. Failing to act 5. Obeying rules that don't exist
what are the 5 pitfalls that hinder innovation?
1. PEOPLE - who are you? 2. OFFERING - what are you offering? 3. CUSTOMER - who are you offering to? who's your customer? 4. VALUE PROPOSITION - why do they care? why is your business important to them? 5. DISTINCTIVE COMPETENCIES - Do you have any key or core science/technology or feature?
what are the 5 questions that RBI Screen asks? (this is one of the simplest and fastest ways to screen ideas)
substitue combine adapt magnify (or modify) put to other uses eliminate rearrange
what does the SCAMPER acronym stand for? (tool used to trigger new ideas for your business)
