MGT358 Entrepreneurship Midterm CongCong

Corporate

- generate new revenue growth and create value through entrepreneurial thought or action Ex: 3M/Qualcomm

What are the six steps of scientific experimentation? Describe in a few short sentences each step.

1. Asking lots of questions 2. Carrying out background research 3. Developing hypotheses 4. Testing the hypotheses by running experiments 5. Analyzing the data 6. Assessing results

What are the different types of customers?

1. End users—customer who actually buys and uses the product 2. Influencers—celebrities or other trend setters 3. Recommenders—industry experts, bloggers, those that offer opinions to the public 4.Economic buyers—customers who approve large purchases such as retail store buyers, office managers, etc 5.Decision-makers—ultimate decision-makers such as CEOs, CFOs, or mom and dad 6.Saboteurs—those that can veto purchases or slow down the purchasing process

What are some of the rules of experimentation? How could entrepreneurs most effectively use the data generated from experimentation?

1. Focus on all stakeholders. Entrepreneurs need to focus on all the stakeholders potentially involved in the startup - these include customers, partners, suppliers, distributors, even real estate agents. 2. Ask lots of questions. Remember, every question you have about your idea is fertile ground for an experiment. 3. Think like a scientist but don't act like a scientist. In other words, it's important to think through your hypothesis, what you want to test and how you are going to test, but don't get bogged down in the rigor. 4. Build your learning into the next iteration. Don't ignore negative information just as you don't want to ignore positive information. A general rule of thumb is that six pieces of information saying the same thing can be a fact! 5. Keep track of your data. You may think a piece of information is not important but it is essential to keep track of everything. 6. Keep your experiments low cost and quick; and use them to shape and improve ideas. 7. Don't just talk with stakeholders - interact with them. 8. Don't ignore data just because you don't like what it's telling you.

What are the eight components of entrepreneurship?

1.Reflect on your desired impact on the world 2. Start with means at hand 3. Describe the idea today 4. Circulate affordable loss 5. Take small action 6. Network and enroll others 7. Build on what you learn 8. Reflect and be honest with yourself

What are some common types of experiments?

1.Trying out new experiences (Live in a different country, Work in multiple industries, Develop a new skill) 2.Taking apart products, processes, and ideas (Disassemble a product, Visually map out a process, Deconstruct an idea, Michael Dell (Dell) took apart a computer to see how it worked) 3.Testing ideas through pilots and prototypes (Build a prototype, Pilot a new process, Launch a new venture on the market, Nick Swinmum (Zappos) launches products quickly and uses feedback to make improvements)

Customer Relationships

:Relationships can be developed on a one-to-one basis in a brick and mortar T-shirt store and/or through a purely automated process of selling the T-shirts online. Customer relationships go beyond just buying and selling; they depend on engendering positive feelings about your business, building a sense of customer identity ("I am a so-and-so T-shirt customer"), and motivating customers to want to bring their friends into the relationship. The key here is one of the most important questions an entrepreneur can answer: How do you establish and maintain relationships with your customers?

Key Resources

:Resources are what you need to develop the business, create products and services, and deliver on your CVP. Resources take many forms and include people, technology, information, and physical and financial resources. How much and which resources will you need if your company has 1,000 customers or 1,000,000? What resources do you need to accomplish the key activities? If you're opening up a store, then you need to figure out the location and size; you also need people who are going to sell your T-shirts; space to store inventory; and a range of artists who will provide the designs for your T-shirts. You will also need to calculate how much money you will need to set up, as well as accumulating the skills, knowledge and information you need to start your own business.

Revenue Streams

:Revenue is generated if a successful value proposition is delivered. Here you need to ask: How much are my customers willing to pay? How many customers do I need? How much cash can be generated through T-shirt sales in the store or T-shirt sales online? How much does each stream contribute to the total? (We will explore revenue models in further detail in Chapter 10).

Cost Structure

:The cost structure represents all the expenses required to execute and run the business model. What are the most important costs inherent in the business model? Which resources are the most expensive to get? Which activities are the most expensive? Store rental, employee salaries, the cost of purchasing T-shirt materials and designs, and the cost of sales and marketing are all factors to consider when formulating a cost structure.

Channels

:The value proposition is delivered through communication, distribution, and sales channels. The core question here is: What are all the ways in which you can reach your customer? For example, you could reach your customers online, through a brick and mortar store, and/or through word of mouth.

EMPATHY

:•Enhances networking•Plays role in effective leadership•Promotes team building•Brings inspiration to ideation of 'what is the problem?'•Helps us understand not only how, but why people think and feel as they do.

What is a business model?

A conceptual framework that describes how a company creates, delivers, and extracts value (this helps entrepreneurs generate value and scale; Fulfilling unmet needs in an existing market, by delivering existing products and services to existing customers with unique differentiation, and by serving customers in new markets

What is a problem statement? What is a point of view? Can you give some examples of problem statement?

A problem statement is a statement about the problem trying to be solved, it addresses the need and WHY it needs to be met. Point of view is an individual's perception or unique world view, empathizing with individuals can help us learn about this and give insight on how to solve the problems presented.

What is a prototype? What role does the prototype serve in the design thinking process?

A prototype is a simple experimental model of a proposed solution used to test or validate ideas, design assumptions and other aspects of its conceptualisation quickly and cheaply, so that the designer/s involved can make appropriate refinements or possible changes in direction.

Experimentation:

Acting in order to learn, Collect real-world information, Test new concepts, Asking questions, Validating assumptions, Based on action not research

What are the difference between opportunity and ideas? What are some key characteristics of an opportunity?

An idea is a thought, an impression, or a notion. It may or may not meet the criteria of an opportunity. An opportunity is attractive, timely, durable, and anchored in a product/service that potentially adds value for buyers/users. You can identify opportunities by observing trends, solving a problem or a challenge, and by finding gaps in the marketplace.

Customer Segments

As defined above, a customer segment is a part of the customer grouping of a market. For example, gluten-free is a segment of the grouping of customers who buy food; another segment would be customers who are lactose intolerant. In Chapter 1 we saw that the caffeine-free ZOOS Greek Iced Tea would appeal to pregnant and new moms. The customer segmentation questions for the T-shirt business are: Who are your most important customers? What segment of the market would be most likely to buy your T-shirts?

Put yourself in the shoes of an entrepreneur designing a product, describe the steps of the design thinking product?

Begin with a problem statement that defines a problem. Use convergent and divergent thinking to create an outline to solve the problem. Then create a sketch to put the idea onto paper. Create a prototype of the sketch that can be used in the design. Determine feasibility, viability, and desirability

What are customer value proposition? Give some examples of customer value proposition for successful companies?

Customer Value Proposition - Describes exactly what products or services your business offers and sells to customers, explains how you can help customers do something more inexpensively, easily, effectively, or quickly than before Most important, must offer better value than the competition, must be measurable in monetary terms, must be sustainable

4What is design thinking? What are the three criteria for a successfully designed idea?

Design Thinking: Process most commonly used to solve complex problems, navigate uncertain environments, and create something that is new to the world.

DIVERGENT VS CONVERGENT

Divergent thinking: Opens our minds to possibilities i.e. the practice of play. Convergent thinking: Moves us from abstract to concrete; from openness to understanding

Differentiate life style entrepreneurship, social, corporate, franchise and growth oriented entrepreneurships and give examples for each type-

Entrepreneurs are confident in themselves and their abilities. They recognize that they don't know everything or control all the available resources. Instead they have the ability to understand what they need. We educate ourselves or partner with others who have a needed skillset or experience.

Key Partners:

Entrepreneurs are not able to do everything by themselves, so partnering with suppliers, associates, and distributors is a logical option, not only for strategic purposes but also for efficiency needs. For example, you could partner with a designer who could advise you on the artwork of the T-shirts as well as providing you with a network into other designers. You could ask the questions around outsourcing: Could some activities be outsourced? Do you have a network of suppliers/buyers you could tap into or negotiate with?

Play:

Frees the imagination, Opens our mind to opportunities Helps us become more innovative

-What are the differences between grounded, blue sky and spaced-out ideas? Can you shape an idea from a spaced-out idea to a blue sky idea?

Grounded Ideas are safe ideas that are predictable with little innovation; Blue Sky Ideas are ideas that are forward thinking; Spaced out ideas are crazy, impractical ideas.

Reflection

Helps critically analyze our feelings and knowledge, Provides new perspectives, Evaluate outcomes, Draw conclusions

What's the difference between observation and insight? Can you give an example of insight?

Observation: The action of closely monitoring behavior and activities Insights: An interpretation of an observation that provides a new understanding EX of insight: Observing a friend format their resume and liking the look, gaining insight to how a resume should look and how to do the operations in order to format it correctly.

What is predictive logic? What's the creation logic? Compare and contrast the prediction and creation approaches to entrepreneurship. What strengths and weaknesses do you see in the creation view of entrepreneurship?

Predictive logic - big planning, waiting until you get what you need, expected return, linear, optimization, avoid failures at all costs, competitive, knowable. The saying, "to the extent we can predict the future, we can control it." Creation logic - small actions, starting with what you have, acceptable loss, iterative(iterate), experimentation, embrace and leverage failure, collaborative, unknowable. The saying, "To the extent we can create the future, we don't need to predict it." "Strengths of Creation approach: Flexibility and adaptability, ownership over outcome. Weaknesses: Uncertainty and stress, no expected success generally facing acceptable loss or failure, missing 'big picture' thinking"

Define entrepreneurship as the pursuit of opportunity without regards to the resources currently held.-

Professor Howard Stevenson, the godfather of entrepreneurship studies at HBS. According to Stevenson, entrepreneurship is the pursuit of opportunity beyond resources controlled.So this is the working definition of entrepreneurship.. Entrepreneurs generally only control their own human, social, and personal financial capital, and the opportunities they seek are far beyond that

Creativity:

Requires openness to the world, Entrepreneurs create opportunities instead of looking for them, Taking action under conditions of uncertainty

What do design thinkers do in inspiration, ideation, and implementation stages?

STEP 1 Inspiration: Empathize and ask 'What is the problem?' use divergent thinking STEP 2 Ideation: Use creativity to solve the problem, to create and answer 'How might we solve the problem? 'STEP 3 Implementation: DO IT, Test and ask 'How can we do it better?' Use convergent thinking

In the design thinking process, what are the benefits of using sketches rather than words to generate ideas for products and services?

Sketching forces individuals to look at a problem from a new perspective, sketches are less limiting, and allow greater use of the imagination

What are the four core areas of a business model?

The Offering → identifies potential customers the offering might be useful for and resources The Customer → segments of a market that your offering is serving, plan to reach the target market, plan to maintain relationships with the market segment The Infrastructure → All resources an entrepreneur must have in order to deliver the CVP (ex: people, tech, products, suppliers, facilities, cash) The Financial Viability → revenue and cost structures (how will the firm make money given the cost structures of the resources/processes?) Not just about revenue and costs

How would your views differ if you choose to see entrepreneurship as a process or a method/practice?

The process approach is based on planning and prediction, it is the predictive logic; The method approach is based more on trial and error based, it is based on the creative logic

Empathy:

Understanding the emotion, circumstances, intentions, thoughts and needs of others. Allows you to connect with potential stakeholders Can help identify unmet needs

Key Activities:

What are the most important activities that the company participates in to get the job done? When running a T-shirt business you will need to consider such activities as stock management, sales management, and T-shirt design selection.

-How could you identify opportunities? Can you give an example of opportunities that come from trends and identifying gaps in the marketplace?

You can identify opportunities by observing trends, solving a problem or a challenge, and by finding gaps in the marketplace.

CVP:

described earlier in this chapter, the CVP is designed to solve a customer problem or meet a need. With regard to your new T-shirt business, ask yourself the following: What value do we deliver? What bundle of products and services are we offering? What are we helping customers achieve by providing a new range of T-shirts?

Social -

enterprise that focuses more on solving social problems or effecting social change Ex: Toms/Warby Parker

Lifestyle -

focuses more on personal lifestyle rewards rather than profits Ex: Mom and Pop retail stores

•viability—

how sustainable the idea is in the long term; and

Growth-oriented -

moving the business forward in a revenue-focused manner Ex: Facebook

Franchise/Licensing -

offering a product or a service labeled by a corporation that provides assistance in every aspect of business Ex: Chick-fil-A/Business Model Canvas

•feasibility—

what can be possibly achieved in the near future;

•desirability—

who will want to use or buy the product or service.