TAMUCC MGMT 5350 Entrepreneurship Byus FINAL - Chap 01-12
What are three important points of a business model (according to Alex Osterwalder)
1 - Be SYSTEMATIC 2 - PLAY with alternative business models 3 - TEST your hypothesis (did you NAIL IT or do you need to PIVOT your model to adapt?) (from video "A New Approach to Designing Business Models")
Social Media
1 - Claim your Name! 2 - Pick social networks, listen, learn, post 3 - Four Helpful posts > One sale posts (Anita Newton, Video 5)
According to speaker Alex Osterwalder, what nine building blocks should a business model canvas include?
1 - Customer Segments 2 - Value Proposition 3 - Channels 4 - Customer Relationships 5 - Cost Structure 6 - Key Activities 7 - Key Resources 8 - Key Partners 9 - Revenue Streams (from video "A New Approach to Designing Business Models)
Tablestakes
1 - Web Copy - Customer's point of view 2 - Design - Less is more 3 - Keyword Development - optimize for search 4 - Relevant Content - returning customers 5 - Responsive - looks good on all devices platforms 6 - Media-Friendly (Anita Newton, Video 4)
Types of Startup Markets (per Steve Blank)
1- Existing Market 2- New Market (invented something) 3- Re-segmented Market 4- Clone Market (Video 01 Startups)
Three Reasons Startups Need Funding
1-Cash Flow Challenges 2-Capital Investments 3-Lengthy Product Development Cycle (Text, p. 329)
Determine What Intellectual Property to Protect
1-Is the intellectual property in question directly related to its competitive advantage? 2- Does an item have value in the marketplace? (Text, p. 407)
Companies with consistent content marketing reduce their cost per lead by _____ %
80% (Anita Newton, Video 4)
Solutions to change the world
>Change how business sees itself >Change how others see business (Porter Video)
Startup Definition (per Steve Blank)
A *temporary* organization designed to *search* for a repeatable & scalable business model. (Video 01 Startups)
Content Litmus Test
A - Actionable E - Educational (ex: LinkedIn) I - Inspirational O- Outrageous U - Useful 4 Elements that are Helpful > 1 sales attempt (Anita Newton, Video 4)
Iteration
A MINOR change to a business model component (Video 03 Startups)
Pivot
A SUBSTANTIVE change to a business model component (Video 03 Startups)
Entrepreneurship per Dr. Byus
A way of thinking, reasoning, & acting that is opportunity obsessed, wholistic in nature and leadership balance, for the purpose of creating value, delivering value, & capturing value for the entrepreneur. (Stated in his video)
Founders' Agreement
A written document that deals with issues such as the relative split of the equity among the founders of the firm, how individual founder will be compensated for the cash of the "sweat equity" they put into the firm, and how long the founders will have to remain with the firm for their shares to fully vest. (Text, p. 228)
Trend 3: Technological Advances
Advances in technology frequently create business opportunities. Once a technology is created, products often emerge to advance it (EX: Rokit Boost). Examples of Entire Industries that Have Been Created as the Result of Technological Advances ~Computer industry ~Internet ~Biotechnology ~Digital photography
Trademark
Any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those products or services from others. (Text, p. 414)
Elevator Speech or Pitch
Brief, carefully constructed statement that outlines the merits of a business opportunity. (Text, p. 335)
Networking
Building and maintaining relationships with people whose interests are similar or whose practice is that a founder calls a business acquaintance or friend to ask for an introduction to a potential investor, business partner, or customer. (Text, p. 301)
Conventional Wisdom
Business profits from CAUSING social problems. Example: Pollution Example: Safe working environment (Porter Video)
Industry Analysis
Business research that focuses on the potential of an industry. (Text, p. 150)
What do Bankers look at?
Cash and Working Capital or the... Net Working Capital = Working Capital LESS ST Liabilities Debt Equity Ratio (Bill Reichert Video #3)
Tagline
Catchy phrase that's used consistently in a company's literature, advertisements, stationery, and even invoices, and thus becomes associated with that company -- to reinforce the position it has staked out in the market. (Text, p. 370)
Skills Profile
Chart that depicts the most important skills that are needed and where skills gaps exist. (Text, p. 305)
Primary Research
Collected by the person or persons completing the analysis. (book p78)
Subchapter S Corporation
Combines the advantages of a partnership and a C corporation. It is similar to a partnership in that the profits and losses of the business are not subject to double taxation. Profit and losses are passed through to the individual tax returns. (Text, p. 241)
Future Competitors
Companies that are not yet direct or indirect competitors but could move into one of these roles at any time. (Text, p. 166)
Public Corporations
Companies traded on the New York Stock Exchange (NASDAQ) (Text, p. 240)
Intellectual Property Audit
Conducted to determine the intellectual property a company owns. (Text, p. 429)
Organizational Feasibility Analysis
Conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch. (book p89)
Net Sales
Consist of total sales minus allowances for returned goods and discounts. (Text, p. 266)
Economic Espionage Act (1996)
Criminalizes the theft of trade secrets. (Text, p. 426)
"You need to understand the underlying financial flows of your business. That's key to your understanding of how to manage your business."
Crucial to know how to manage & build your company. (Bill Reichert Video #1 & Video #2)
"So we pursue mastery as a powerful motivator in all aspects of our lives. What we really need to do is bring it into the workplace and harness its power there too." Who stated this?
Daniel Pink (Pink Video 05)
Financial Management
Deals with the two activities: raising money and managing a company's finances in a way that achieves the highest rate of return. (Text, p. 261)
Improving a company's performance will naturally improve what ratio?
Debt Equity Ratio (Bill Reichert Video #3)
Partnership Agreement
Details the responsibilities and the ownership shares of the partners involved with the organization. (Text, p. 238)
Firm Position
Determines how the company is situated relative to its competitors. (Text, p. 151 and p. 194)
Creative Destruction
Developing new products and technologies that over time make current products and technologies obsolete. (text, p. 22)
Sources & Uses of Funds Statement
Document that lays out specifically how much money a firm needs, where the money will come from, and how the money will be used. (Text, p. 201)
How do investors look at your Income Statement?
Gross Profit Margin Operating Margin Net Margin And... Operational Efficiencies (Bill Reichert Video #5)
Debt-to-Equity Ratio
If a firm continues to borrow from its lenders and this gets too high, it may have trouble meeting its obligations and securing financing needed to fuel its growth. (Text, p. 262)
Product Attribute Map
Illustrates a firm's positioning strategy relative to its major rivals. (Text, p. 369)
Road Show
Whirlwind tour that consist of meetings in key cities where the firm presents its business plan to groups of investors. (Text, p. 342)
Working Capital
current assets - current liabilities (Text, p. 269)
Current Ratio
current assets divided by current liabilities (Text, p. 269)
Opportunity Gap
entrepreneur recognizes a problem and creates a business to fill it (p. 43)
Current Liabilities
Liabilities of the business that must be paid within a year. (Text, p. 269)
Fair Use
Limited use of copyrighted material for purposes such as criticism, comment, news, reporting, teaching, or scholarship. (Text, p. 424)
Cost-Based Pricing
List price is determined by adding a markup percentage to a product's cost. (Text, p. 376)
Fragmented Industry
One that is characterized by a large number of firms of approximately equal size. (Text, p. 163)
Milestone-Based Budgeting
Organize your expenses around each milestone. (Bill Reichert Video #7)
What is the single best management technique and powerful tool?
PURPOSE!!! How? and Why? employees are doing their job (Pink Video 06)
Board of Advisors
Panel of experts asked by a firm's management to provide counsel and advice on an ongoing basis. (Text, p. 200)
Four Key Forms of Intellectual Property
Patents Trademarks Copyrights Trade Secrets (Text, p. 407)
Are the majority of founders SOLO or CO-FOUNDERS?
Per Wasserman's data, 16% are SOLO and 84% are CO-FOUNDERS (Kauffman Video 02)
Carry
Percentage of the profits that the venture capitalists get. (Text, p. 338)
Inside Director
Person who is also an officer of the firm. (Text, p. 307)
Business Model
Plan or recipe for how it creates, delivers, and captures value for its stakeholders. (Text, p. 25)
"Your first 1000 customers are an extension of your customer development"
Quote by Hiten Shah of Kiss Metrics (Anita Newton, Video 5)
"Why business can be good at solving social problems"
Quote by Michael Porter, Strategy Professor (Porter Video)
"That people who can spread ideas, regardless of what those ideas are, win."
Quote from Ted talk speaker, Seth Godin
strong-tie relationships
Relationships characterized by frequent interaction that form between like-minded individuals such as coworkers, friends, and spouses; these relationships tend to reinforce insights and ideas the individuals already have and, therefore, are not likely to introduce new ideas. (Text, p. 57)
In regard to an Entrepreneur's Social Network, what is a a STRONG-tie relationship?
Relationships that are characterized by frequent interaction and form between like-minded individuals, coworkers, friends, and spouses. Result: It is more likely that an entrepreneur will get new business ideas through weak-tie rather than strong-tie relationships.
Wealth
Resources create wealth (being in business). Business creates wealth when it meets needs... at a profit. (Porter Video)
Distribution Channel
Route a product takes from the place it is made to the customer who is the end user. (Text, p. 386)
1- Design is FREE when you get to scale. 2- The riskiest thing you can do now is be safe. "Very good" is boring
Rules according to Seth Godin (Godin Video)
Statement of Cash Flows
Summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred. Operating Activities Investing Activities Financing Activities (Text, p. 270)
The TV-Industrial Complex
TV and mass media made it really easy to spread ideas in a certain way. Buys Ads > Get More Distribution > Sell More Products > Make a Profit > [back to beginning} (Godin Video)
Product Prototype
The first physical manifestation of a new product, often in a crude or preliminary form. (Text, p. 198)
New-Venture Team
The group of founders, key employees, and advisers that either manager or help manage a new business in its start-up years. (book p89)
New-Venture Team
The group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm. (Text, p. 296)
Resources
The inputs a firm uses to produce, sell, distribute, and service a product or service. (book p124)
Target Market
The limited portion of the industry that it goes after or to which it wants to appeal. (book p85) A place within a larger market segment that represents a narrower group of customers with similar interests. (book p122)
Cost of Goods Sold
The materials and the direct labor needed to produce the revenue driver. (Text, p. 196)
How do you create an ENGAGED workforce?
The way human beings ENGAGE is by getting there under their own steam. Self-Direction = Engagement (Pink Video 04)
Trend 4: Political Action and Regulatory Changes
These changes also provide the basis for opportunities. Changes engender new business and product opportunities. For example, global political instability and the threat of terrorism have resulted in many firms becoming more security-conscious. General Example: This happened with the passage of the Affordable Care Act in 2010. The provisions of the act yielded opportunities for entrepreneurs to launch electronic records start-ups, apps to help patients monitor their medication, and similar companies. Specific Example Evolv Technology is a start-up that has assembled a multidisciplinary team of experts to identify, invent, and apply new technologies to meet current terrorism-related threats.
SEARCH > *BUILD* > EXECUTE
Three phases of a startup to grow the firm to its full viability. It's more than product-to-market fit. Building the right team is crucial (*overlapping skills* & *complementary temperaments*). A 1/3 of teams fail because of personal issues. (Video 04 Startups)
Trend 2: Social Forces
Trends that alter how people and businesses behave and set their priorities. These trends provide opportunities for new businesses to accommodate the changes. Examples of these Trends are: ~Aging of the population. ~The increasing diversity of the population. ~Millennials entering the workforce. ~Growth in the use of mobile devices. ~An increasing focus on health and wellness.
Trend 1: Economic Forces
Trends that help determine areas that are ripe for new start-ups and areas that start-ups should avoid. Example Creating a Favorable Opportunity: ~A weak economy favors start-ups that help consumers save money. ~An example is GasBuddy.com, a company started to help consumers save money on gas.
True or False: According to Timmons, one study indicated that about 95% of the new teams seeking capital never get off the ground.
True. (Article by Timmons, p 33)
True or False: 73% of teams split equity within a month of founding
True. (Kauffman Video 04)
True or False: Four years into the business, 50% of founders are no longer at the organization.
True. (Kauffman Video 05)
Illiquid
Typically is not easy to find a buyer for the stock. (Text, p. 240)
Preferred Stock
Typically issued to conservative investors who have preferential rights over common stockholders in regard to dividends and to the assets of the corporation in the event of liquidation. (Text, p. 239)
Global Strategy
Use the same basic approach in all foreighn markets. (Text, p. 165)
Types of Patents
Utility Design Plant (Text, p. 410)
STTR Program
Variation of the SBIR for collaborative research projects that involve small businesses and research organizations. (Text, p. 348)
Variable Costs
Vary proportionally with the volume of goods or services produced. (book p128)
General Partners
Venture capitalists who manage the fund. (Text, p. 338)
Closely Held Corporation
Voting stock is held by a small number of individuals and is very thinly or infrequently traded. (Text, p. 240)
Signaling
Well known and respected board members bring instant credibility to the firm. (Text, p. 309)
Basis of Differentiation
What causes consumers to pick one company's products over another's. (book p122)
Vendor Credit (Trade Credit)
When a vendor extends credit to a business in order to allow the business to buy its products and/or services up front buy defer payment until later. (Text, p. 345)
Historical Financial Statements
reflect past performance and are usually prepared on a quarterly and annual basis. (Text, p. 265)
network entrepreneurs
those who identified their ideas through social contacts (text, p. 57)
CREATIVITY
~The process of generating a novel or useful idea. ~Opportunity recognition may be, at least in part, a creative process. ~For an individual, the process can be broken down into five stages
Three Components of the LEAN Method (per Steve Blank)
1- Business Model Design 2- Customer Development 3- Agile Engineering (Video 03 Startups)
Three Ways to Identify an Opportunity
1. observing trends 2. solving a problem 3. finding gaps in the marketplace
Three Ways to Identify Opportunities
1. observing trends 2. solving a problem 3. finding gaps in the marketplace (Text, p. 44-53)
Five Myths about Entrepreneurs
1: Entrepreneurs Are Born, Not Made 2: Entrepreneurs Are Gamblers 3: Entrepreneurs Are Motivated Primarily by Money 4: Entrepreneurs Should Be Young and Energetic 5: Entrepreneurs Love the Spotlight
Entrepreneurial Lessons Learned (per Timmons)
1st - Competent Behaviorist can significantly increase capacity and willingness of team members to reason out their differences 2nd - Recognize factors which should influenced decisions concerning matters as ownership & salaries 3rd - Need for a "mating dance" among potential partners... PRIOR to solidifying venture(s) 4th - Internal adjustments will be required as the firm grows (Article by Timmons, p 37-38)
Line of Credit
A borrowing "cap" is established and borrowers can use the credit at their discretion. (Text, p. 343)
Supplier or Vendor
A company that provides parts or services to another company. (book p130)
Virtual Prototype
A computer-generated 3D image of a product or service idea. (Text, p. 198)
What is an OPPORTUNITY?
A favorable set of circumstances that creates a need for a new product, service, or business.
Sarbanes-Oxley Act of 2002
A federal law that was passed in response to corporate accounting scandals involving prominent corporations, such as Enron and WorldCom. This wide-ranging act established a number of new or enhanced reporting standards for public corporations. (Text, p. 342)
Press Kit
A folder that contains background information about the company and includes a list of its most recent accomplishments. (Text, p. 381)
General Partnership
A form of business organization where two or more people pool their skills, abilities, and resources to run a business. (Text, p. 238)
Code of Conduct
A formal statement of an organization's values on certain ethical and social issues (also called code of ethics) (Text, p. 223)
Industry
A group of firms producing a similar product or service. (Text, p. 150)
Limited Partnership
A modified form of a general partnership. The major difference between the two is that a limited partnership includes two classes of owners: general partners and limited partners. (Text, p. 239)
Emerging Industry
A new industry in which standard operating procedures have yet to be developed. (Text, p. 163)
Milestone
A noteworthy or significant event. (Text, p. 194)
Business Model
A plan or recipe for how it creates, delivers, and captures value for its stakeholders.
Bug Report
A popular technique that is used in classrooms to teach brainstorming. (p. 60)
Mediation
A process in which an impartial third party (usually a professional mediator) helps those involved in a dispute reach an agreement. (Text, p. 231)
Brand Management
A programs used to protect the image and value of an organization's brand in consumers' minds. (Text, p. 371)
10-K
A report similar to the annual report except that it contains more detailed information about the company's business. (Text, p. 265)
Mastery
A sense of progression (inherently motivating) (Pink Video 05)
Corporation
A separate legal entity organized under the authority of a state. (Text, p. 239)
C Corporation
A separate legal entity that, in the eyes of the law, is separate from its owners. (Text, p. 239)
Landing Page
A single web page that typically provides direct sales copy, like "click here to buy a Hawaiian vacation." (book p84)
Ethical Dilemma
A situation that involves doing something that is beneficial to oneself or the organization, but may be unethical. (Text, p. 224)
Core Competency
A specific factor or capability that supports a firm's business model and sets it apart from its rivals. (book p124)
First Screen
A tool that can be used in the initial pass at determining the feasibility of a business idea. (See Appendix 3.1, Ch3 ppt, Slide 34)
Idea Bank
A vault of digital or physical repository for storing ideas.(text, p. 62) --intranet--
Business Plan
A written document that describes all the aspects of a business venture in a concise manner.
Profitability
Ability to earn a profit. (Text, p. 262)
Cost Reduction Strategy
Accomplished through achieving lower costs than industry incumbents through process improvements. (Text, p. 164)
Venture-Leasing Firms
Act as brokers, bringing the parties involved in a lease together. (Text, p. 346)
Promotion
Activities the firm takes to communicate the merits of its product to its target market. (Text, p. 377)
New Market Disruption
Addresses a market that previously was NOT served. (book p118)
Creating Shared Value
Addressing a social issue with a business model. Social Value + Economic Value (Porter Video)
Fictitious Business Name Permit
Allows a business to legally operate under a fictitious name. (Text, p. 235)
Rewards-based Crowdfunding
Allows entrepreneurs to raise money in exchange for some type of amenity or reward. (Text, p. 345)
Price
Amount of money consumers pay to buy a product. (Text, p. 376)
Operating Leverage
An Analysis of its fixed versus variable costs. Highest in companies that have a high proportion of fixed costs relative to their variable costs. (Text, p. 197)
What is the difference between an OPPORTUNITY & an IDEA?
An OPPORTUNITY is a favorable set of circumstances that creates a need for a new product, service, or business. An IDEA is simply a thought, an impression, or a notion.
Service
An activity or benefit that is intangible and does not take on a physical form. (Text, p. 373)
Industry/Target Market Feasibility
An assessment of the overall appeal of the industry and the target market for the product or service being proposed. (book p85)
Product/Service Feasibility Analysis
An assessment of the overall appeal of the product or service being proposed. (book p78) NOTE: Before a prospective firm rushes a new product or service into development, it should be sure that the product or service is what prospective customers want. DESIRABILITY & DEMAND (ch 3 ppt, slides 10-17)
What is the "liquid network" as described by TED speaker Steven Johnson?
An environment that leads to innovation
Forecasts
An estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans. (Text, p. 263)
Assumptions Sheet
An explanation of the most critical assumptions on which the financial statements are based. (Text, p. 273)
Assumptions Sheet
An explanation of the most critical assumptions on which the financial statements are based. (Text, p. 201)
Declining Industry
An industry or a part of an industry that is experiencing a reduction in demand. (Text, p. 164)
Global Industry
An industry that is experiencing significant international sales. (Text, p. 165)
Mature Industry
An industry that is experiencing slow or no increase in demand, has numerous repeat (rather than new) customers. (Text, p. 163)
Trade Secret
Any formula, pattern, physical device, idea, process, or other information that provides the owner of the information with a competitive advantage in the marketplace. (Text, p. 426)
Secondary Market Offering
Any later public issuance of shares. (Text, p. 340)
Intellectual Property
Any product of human intellect that is intangible but has value in the marketplace. (Text, p. 405)
SBA Guaranteed Loan Program
Approsimately 50% of the 9,000 banks in the U.S. participate in this program. The *7(A) Loan Guaranty Program* is the most notable SBA Program available to small businesses. (Text, p. 344)
Homogeneous
Areas of expertise are very similar to one another... likely to have different points of view about tech, hiring, decisions, competitive tactics, etc. (Text, p. 300)
Explain what Entrepreneurs Do
Assemble and then integrate all the resources needed - the money, the people, the business model, the strategy - to transform an invention or an idea into a viable business.
Balance Sheet Equation
Assets = Liabilities + Shareholders Equity (Bill Reichert Video #3)
Fixed Assets
Assets that are relatively permanent, such as land, buildings, and equipment. (Text, p. 267)
Key Assets
Assets that the firm owns that enable its business model to work. (book p125)
What do investors want to know?
Balance Sheet & Capitalization Table (Bill Reichert Video #3)
Why do over 90% of startups fail?
Because they did not find a market or customers (Blank Video) [1000 to 1 Silicon Valley companies fail]
What is the most frequent reason that venture capital investors fire founders?
Because they miss the budget. So, hit the budget every time! (Bill Reichert Video #7)
Non-disclosure Agreement
Binds an Employee or another party to not disclose a company's trade secrets. (Text, p. 231)
Techniques for Generating Ideas
Brainstorming Focus Groups Library and Internet Research Customer Advisory Boards Day-In-the-Life Research
Market Analysis
Breaks the industry into segments and zeroes in on the specific segment (or target market) to which the firm will try to appeal. (Text, p. 194)
The NEW Thinking
Business profits from SOLVING social problems. (Porter Video)
Direct Competitors
Businesses that offer products or services that are identical or highly similar to those of the firm completing the analysis. (Text, p. 165)
Multi-domestic Strategy
Compete for market share on a country-by-country basis and vary their product or service offerings to meet the demands of the local market. (Text, p. 165)
SBIR Program
Competitive grant program that provides over $2.5 billion per year to small businesses for early-stage and development projects. (Text, p.. 347)
Ratio Analysis
Computed items, such as return on assets and return on sales, are computed by taking numbers out of the financial statements and forming ratios with them. Each ratio has a particular meaning in regard to the potential of the business. (Text, p. 201)
Barrier to Entry
Condition that creates a disincentive for a new firm to enter an industry. (Text, p. 156)
Positioning Statement
Consolidates COMPETITORS, INDUSTRY, & PRODUCT into one useful document. What makes your product unique? Example of positioning statement template: "Crossing the Chasm" by Geoffrey Moore (Anita Newton, Video 3)
Price-Quality Attribution
Consumers naturally assume that the higher-priced product is also the better-quality product. (Text, p. 377)
Secondary Meaning
Consumers, over time, start to identify a trademark with a specific product. (Text, p. 420)
"Copyright Bug"
Copyright protection can be enhanced for anything written by attaching the copyright notice, or "copyright bug" as it is sometimes called. (Text, p. 422)
Fixed Costs
Costs a company incurs whether it sells something or not. (Text, p. 197)
Operating Expenses
Costs involved in operating a business, such as rent, utilities, and salaries. (Text, p. 267)
Variable Costs
Costs that vary by sales volume. (Text, p. 197)
Buzz
Creating awareness and a sense of anticipation about a company and its offerings. (Text, p. 372)
Moore's Positioning Statement
Define your Target by... *Identify Customer Segments *Prioritize Them *Focus on One Segment Define Problem Define Solution (Anita Newton, Video 3)
Product/Market Scope
Defines the products and markets on which it will concentrate. (book p123)
Mission Statement
Defines why a company exists and what it aspires to become. (Text, p. 194)
Brand Equity
Denotes the set of assets and liabilities that are linked to a brand and enable it to raise a firm's valuation. (Text, p. 372)
Standard Business Models
Depict existing plans or recipes firms can use to determine how they will create, deliver, and capture value for their stakeholders. (book p115) The proper time to develop a business model is AFTER a feasibility analysis and PRIOR to fleshing out the operational details of the company. (Ch4 ppt, slide 3)
Financial ratios
Depict relationships between items on a firm's financial statements, are used to discern whether a firm is meeting its financial objectives and how it stacks up against its industry peers. (Text, p. 264)
Sales Process
Depicts the steps a firm goes through to identify prospects and close sales. (Text, p. 387)
Channels
Describe how a firm delivers its product or service to its customers. (book p130)
Cost Structure
Describes the most important costs incurred to support its business model. (book p127)
Preliminary Prospectus
Describes the offering to the general public. (Text, p. 342)
Mission or Mission Statement
Describes why it exists and what its business model is supposed to accomplish. (book p121)
Competitor Analysis
Detailed evaluation of a firm's competitors. (Text, p. 151 & p. 196)
Operating Budget
Detailed plan of how you're going to spend money and hopefully earn revenue over the next year. Know KEY drivers for your revenue and expenses over the next year. (Bill Reichert Video #7)
Reference Account
Early user of a firm's product who is willing to give a testimonial regarding his or her experience with the product. (Text, p. 375)
Place (or distribution)
Encompasses all the activities that move a firm's product from its place of origin to the consumer. (Text, p. 386)
Relevant Industry Experience
Entrepreneur's ability to successfully launch and grow a firm. Experience in the same industry as their current venture will have a more mature network of industry contacts and will have a better understanding of the subtleties of their respective industries. (Text, p. 301)
Owner's Equity
Equity invested in the business by its owners plus the accumulated earnings retained by the business after paying dividends. (Text, p. 269)
Trade Show
Event at which the goods or services in a specific industry are exhibited and demonstrated. (Text, p. 382)
Federal Employee Identification Number
FEIN = All businesses (other than a sole proprietorship) are required to obtain a FEIN. (Text, p. 235)
Viral Marketing
Facilitates and encourages people to pass along a marketing message about a particular product. (Text, p. 385)
True or False: According to Wasserman, we should we co-found with friends.
False. Wasserman's data showed that co-founding with friends results in less stability over the long run. (Kauffman Video 03)
Opportunity
Favorable set of circumstances that creates a need for a new product, service, or business. (Text, p. 43)
Articles of Incorporation
Filed with the secretary of state's office in the state of incorporation.Typically include the corporation's name, purpose, authorized number of stock shares, classes of stock, and other conditions of operation. (Text, p. 240)
Peer-to-peer Lending
Financial transaction that occurs directly between individuals or "peers". (Text, p. 345)
Factoring
Financial transaction whereby a business sells its account receivable to a third party, called a factor, at a discount in exchange for cash. (Text, p. 345)
Bootstrapping
Finding ways to avoid the need for external financing or funding through creativity, ingenuity, thriftiness, cost-cutting, or any means necessary. (Text, p. 333)
Leadership Strategy
Firm tries to become the dominant player in the industry. (Text, p. 164)
Niche Strategy
Focuses on a narrow segment of the industry that might be encouraged to grow through product or process innovation. (Text, p. 164)
Provisional Patent Application
For utility patents, provides the means to establish an early effective filing data for a non-provisional patent application. (Text, p. 414)
If/Then Rewards Work in this Situation
For work that is simple, algorithmic and has a short-time horizon. This is a very fixed/narrow way to get one's attention. (Pink Video 02)
LLC (Limited Liability Company)
Form of business that is rapidly gaining popularity in the US. The concept originated in Germany. Profit and losses are passed through to the individual tax returns. (Text, p. 242)
Copyright
Form of intellectual property protection that grants to the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits from the work. (Text, p. 421)
Virtual Assistant
Freelance who provides administrative, technical, or creative assistance to clients remotely from a home office. (Text, p. 306)
Co-Founder Similarities
Functional, Academic, Gender, Race, Ethnicity ASK: Is this person really adding dimension to the new-venture team? (Kauffman Video 02)
Scale
Fundamental problem in dealing with social problems. Not enough money. (Porter Video)
Focus Group
Gathering 5-10 people who are selected because of their relationship to the issue being discussed (Text, p. 60)
Debt Financing
Getting a loan. (Text, p. 335)
Exclusive Distribution Arrangement
Give a retailer or other intermediary the exclusive rights to sell a company's products. (Text, p. 387)
Product
Good or service it offers to its target market. (Text, p. 373)
Patent
Grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for the term of the patent. (Text, p. 408)
Organizational Chart
Graphic representation of how authority and responsibility are distributed within the company. (Text, p. 200)
Equity-based Crowdfunding
Helps businesses raise money by tapping individuals who provide funding in exchange for equity in the business. (Text, p. 346)
Efficiency
How productively a firm utilize its assets relative to its revenue and its profits. (Text, p. 262)
Core Strategy
How the firm plans to compete relative to its competitors. (book p120)
Content Marketing
Identifying compelling pieces of information that are interesting and helpful to your audience. (Anita Newton, Video 4)
Assignment of Invention Agreement
If an invention is made during the course of the inventory's employment, the employer typically is assigned the right to apply for the patent through this agreement. (Text, p. 411)
"piercing the corporate veil"
If the owners of a corporation don't file their annual paperwork, neglect to pay their annual fees, or commit fraud, a court could ignore the fact that a corporation has been established and the owners could be held personally liable for actions of the corporation. (Text, p. 240)
For a startup, describe the difference of: Accounting vs Metrics that Matter (per Steve Blank)
In a startup, an Income Stmt may be zero for the first months/years, but it will be important to watch *Metrics that Matter*. (Video 02 Startups)
Cost of Sales (COGS)
Includes all the direct costs associated with producing or delivering a product or service, including the material costs and direct labor. (Text, p. 266)
Consultant
Individual who gives professional or expert advice. (Text, p. 313)
Business Angels
Individuals who invest their personal capital directly in start-ups. (Text, p. 337)
Per Pink, what are some ways to give employee feedback?
Informal. Conversational. Say THANK YOU more. Continual. What motivates you? What are you working on? Talk less. Listen more. How's it going? What are some of your obstacles? Make feedback rich and robust. (Pink Video 05)
Competitive Intelligence
Information that is gathered by a firm to learn about its competitors. (Text, p. 166)
Investment Bank
Institution that acts a s an underwriter or agent for a firm issuing securities. (Text, p. 342)
Operations
Integral to a firm's overall business model and represent the day-to-day heartbeat of a firm. (book p129)
Limited Partners
Investors who invest in venture capital funds. (Text, p. 338)
Concept Test
Involves showing a preliminary description of a product or service idea, called a *concept statement*, to industry experts and prospective customers to solicit their feedback. (book p79)
First-Mover Advantage
Is a sometimes insurmountable advantage gained by the first company to establish a significant position in a new market. (Text, p 163)
Idea diffusion
Is it (the product) remarkable? (Godin Video)
Private Corporation
Is one in which all the shares are held by a few shareholders, such as management or family members, and are not publicly traded. (Text, p. 240)
Management
Is simply a technology. It's something some guy invented in the 1850's. Great technology if you want COMPLIANCE and do exactly what you want them to do. (Pink Video 04)
Pivot or Proceed or Restart ???
Is there a Product-Market fit achieved? Take honest look and know that most hypotheses will fail. Learn from the failures and pivot as necessary. Example: Twitter became a business through a complete restart. (Video 05 Startups)
Common Stock
Issued more broadly than preferred stock. Have voting right and elect the board of directors of the firm. Typically the last to get paid in the event of liquidation. (Text, p. 239)
Budgets
Itemized forecasts of a company's income, expenses, and capital needs and are also an important tool for financial planning and control. (Text, p. 263)
Idea-Expression Dichotomy
Legal principle describing this concept. An idea is not copyright-able, but the specific expression of an idea is. (Text, p. 422)
Buyback Clause
Legally obligates departing founders to sell to the remaining founders their interest in the firm if the remaining founders are interested. (Text, p. 228)
Merchant Cash Advance
Lender provides a business a lump sum of money in exchange for a share of future sales. (Text, p. 345)
If/Then Rewards DO NOT Work in this Situation
Less effective if: *not algorithmic *requires judgement, creativity, conceptual thinking *longer-time horizon (Pink Video 02)
What % of startups fail because technology fails?
Less than 10% (Blank Video)
Value-Based Pricing
List price is determined by estimating what consumer are willing to pay for a product and then backing off a bit to provide a cushion. (Text, p. 376)
Guerrilla marketing
Low-budget approach to marketing that relies on ingenuity, cleverness, and surprise rather than traditional techniques. (Text, p. 386)
Quad Marketing Strategy
MARKETING Strategy - Positioning Statement >>>Define Marketing >>>Earmark a Budget >>>Document & Define Marketing Plan EXECUTION >>>Metrics (What's working?) OPTIMIZATION >>>Customer Acquisition Machine! >>>Growth Hacking >>>Aha Moments LEARN & REFINE >>>Do you have the right "go to market" approach? >>>Pause, Pivot, Pursue (Anita Newton, Video 2)
What was the SINGLE BIGGEST MOTIVATOR learned in Harvard Business School's Teresa Amabile & Steven Kramer Research?
Making Progress in Meaningful Work = MOTIVATING!!! MASTERY!!! PROGRESSING!!! (Pink Video 05)
Advertising
Making people aware of a product inhopes of persuading them to buy it. (Text, p. 377)
Customer Advisory Board
Meet regularly to discuss needs, wants, and problems that may lead to new ideas (Text, p. 62)
Inventory
Merchandise, raw materials, and products waiting to be sold. NOTE: If a firm allows AR or inventory to get too high, it may not be able to keep sufficient cash on hand to meet its short-term obligations. (Text, p. 262)
Other Assets
Miscellaneous assets including accumulated goodwill. (Text, p. 267)
Accts Receivable
Money owed to it by its customers. NOTE: If a firm allows AR or inventory to get too high, it may not be able to keep sufficient cash on hand to meet its short-term obligations. (Text, p. 262)
Utility Patents
Most common type of patent and cover what we generally think of a s new inventions. (Text, p. 410)
Common Myths About Entrepreneurs
Myth 1: Entrepreneurs are Born, Not Made (p.15) Myth 2: Entrepreneurs are Gamblers (p.15) Myth 3: Entrepreneurs are Motivated by Money (p.16) Myth 4: Entrepreneurs Should be Young/Energetic (p.17) Myth 5: Entrepreneurs Love the Spotlight (p.17)
Cash Flow Statement
Net Income +/- Chg in AR +/- Chg in AP = Cash Flow from Operations Capital Activities Financing Activities (Bill Reichert Video #6)
Passion for the Business
Number one characteristic shared by successful entrepreneurs. (Text, p. 9)
Four Questions an Entrepreneur Should Ask to Get the Most out of his/her workforce (Per Daniel Pink)
ONE: Am I paying people *FAIRLY* and am I paying people well? TWO: Am I providing *AUTONOMY* ? THREE: Am I allowing people to make *PROGRESS* ? FOUR: Do the people know *WHY* they're doing what they are doing, not merely how to do it? (Pink Video 02)
Long-term Liabilities
Obligations not due to be paid within one year or the operating cycle, whichever is longer. (Text, p. 269)
Economies of Scale
Occur when mass-producing a product results in lower average costs. (Text, p. 156)
Liquidity Event
Occurrence that converts some or all of a company's stock into cash. (Text, p. 334)
Copyright Infringement
Occurs when on e work derives from another, is an exact copy, or shows substantial similarity to the original work. (Text, p. 423)
Indirect Competitors
Offer close substitutes to the product the firm completing the analysis sells. (Text, p. 166)
Geographic Roll-Up Strategy
One firm starts acquiring similar firms that are located in different geographic areas. (Text, p 163)
Who invented sliced bread?
Otto Rohwedder (Seth Godin Video)
Shareholders
Owners of a corporation (Text, p. 239)
According to Prof Noam Wasserman, what causes 65% of Entrepreneurial Failure?
PEOPLE PROBLEMS - Tensions around founders, hires, & investors (Kauffman Video 01)
Advisory Board
Panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis. (Text, p. 310)
Board of Directors
Panel of individuals elected by a corporation's shareholders to oversee the management of the firm. (Text, p. 200)
Board of Directors
Panel of individuals who are elected by a corporation's shareholders to oversee the management of the firm. (Text, p. 307)
prior entrepreneurial experience
One of the most consistent predictors of future entrepreneurial performance. (Text, p. 301)
Freelancer
Person who is in business for themselves, works on their own time with their own tools and equipment, and performs services for a number of different clients. (Text, p. 306)
Accredited Investor
Person who is permitted to invest in higher-risk investments such as business startups. (Text, p. 346)
Intern
Person who works for a business as an apprentice or trainee for the purpose of obtaining practical experience. (Text, p. 306)
Tagline
Phrase that a business plans to use to reinforce its position in the market place. (Text, p. 194)
Niche Market
Place within a market segment that represents a narrow group of customers with similar interests. (Text, p. 368)
Summary Business Plan
Plan that is 10 to 15 pages and works best for companies that are very early in their development and are not prepared to write a full plan. (Text, p. 188)
Low-End Market Disruption
Possible when the firms in an industry continue to improve products or services to the point where they are actually better than a sizable portion of their clientele needs or desires. *performance oversupply* This is a type of disruption that was elegantly written about by Harvard prof Christensen in the book "The Innovator's Dilemma" (book p118)
Crowdfunding
Practice of funding a project or new venture by raising monetary contributions from a large number of people, typically via the internet. (Text, p. 345)
Opportunity recognition process
Preparation Incubation Insight Evaluation Elaboration (Text, p. 58)
Five Steps to Generating Creative Ideas
Preparation > Incubation > Insight (Eureka!, Business idea conceived, problem solved) > Evaluation > Elaboration
Non-compete Agreement
Prevents an individual from competing against a former employer for a specific period of time. (Text, p. 231)
Personal Characteristics of the Entrepreneur
Prior Industry Experience Cognitive Factors Social Networks Creativity
Secondary Research
Probes data that is already collected. (book p78)
"Profit is the Magic"
Profit is difference between price and the cost to produce. Profit can be translated to be infinitely scalable. That's what business does. (Porter Video)
Pro-forma Financial Statements
Projections for future periods based on forecasts and are typically completed for two to three years in the future. (Text, p. 265) Pro Forma Income Stmt (p. 278) Pro Forma Balance Sheet (p. 279) Pro Forma Statement of Cash Flows (p. 280)
Plant Patents
Protect new varieties of plants that can be reproduces asexually. (Text, p. 411)
Business Method Patent
Protects an invention that is or facilitates a method of doing business. (Text, p. 410)
"There are no facts inside your building - GET OUTSIDE!" and "You are not smarter than your customers!" What do these two Steve Blank quotes mean?
"... actually be learning and discovering from customers outside your office." Develop your product *quickly* and obtain feedback from customers *quickly*. Develop a process to rapidly learn your products/customers will be beneficial. Write down all your hypotheses and use Alex Osterwalder's nine steps of Business Model Canvas (Video 03 Startups)
"No plan survives first contact with customers" A-Who said this? B-What does it mean
"We wouldn't know whether we are right or wrong, until after we ship the product and customers gave us feedback. And, by then, we've burned lots of time, lots of money, and potentially you're out of business." by Steve Blank. He further suggests to learn and discover as you go; with each increment of the phase, ask yourself if you're on the right track. (Video 03 Startups)
Four Essential Qualities of an OPPORTUNITY
(1) Attractive (2) Timely (3) Durable (4) Anchored in a product, service, or business that creates or adds value for its buyer or end user
Three Reasons People Decide to Become an Entrepreneur
(1) Desire to be their own boss (2) Desire to pursue their own ideas (3) Financial rewards
Four pitfalls that plague the early gestation of venture teams
(1) Entrepreneur's Failure to Assess Himself & His Venture (2) The Leaderless Democracy (3) Conflicts in Goals & Values (4) Power vs Achievement Orientation (Article by Timmons, p 35)
Liability of Newness
Refers that companies often falter because the people who start them aren't able to adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and suppliers. (Text, p. 297)
Public Relations
Refers to efforts to establish and maintain a company's image with the public. (Text, p. 381)
Market Strategy
Refers to its overall approach for marketing its products and services. (Text, p. 197)
Churn
Refers to the number of subscribers that a subscription-based business loses each month. (book p115)
Value
Refers to worth, importance, or utility (Text, p. 18)
Income Statement
Reflects the results of the operations of a firm over a specified period of time. (Text, p. 266)
In regard to an Entrepreneur's Social Network, what is a a WEAK-tie relationship?
Relationships that are characterized by infrequent interaction and form between casual acquaintances. Result: It is more likely that an entrepreneur will get new business ideas through weak-tie rather than strong-tie relationships. These are generally not as apt to be between like-minded individuals, so one person may say something to another that sparks a completely new idea.
Fixed Costs
Remain the same despite the volume of goods or services provided. (book p128)
Sweat Equity
Represents the value of the time and effort that a founder puts into a new venture. (Text, p. 332)
Types of Start-Up Firms
Salary-substitute Firm Lifestyle Firm Entrepreneurial Firm (creating value) (Text, p. 18)
Product/Customer Focus
Second defining characteristic of successful entrepreneurs. (Text, p. 12)
Day-in-the-life Research
Send Teams of testers to home and businesses of its users to see how its products are working and to seek insights for new product ideas. (Text, p. 62)
Marketing Mix
Set of controllable, tactical marketing tools that it uses to produce the response it wants in the target market. (Text, p. 373)
Final Prospectus
Sets the date and issuing price for the offering. (Text, p. 342)
Sole Proprietorship
Simplest form of business entity. Form of business organization involving one person and the person and the business are essentially the same. (Text, p. 236)
Outside Director
Someone who is not employed by the firm. (Text, p. 307)
Employee
Someone who works for a business. (Text, p. 305-6)
Stock Options
Special form of incentive compensation. (Text, p. 240)
Single-purpose Loan
Specific amount of money is borrowed that must be repaid in a fixed amount of time with interest. (Text, p. 343)
Liquid Market
Stock can be bought and sold fairly easily through an organized marketplace. (Text, p. 240)
Founding Team
Studies show that 50-70% of all new firms are started by more than one individual. (Text, p. 300)
Rounds (Stages)
Subsequent investments, also referred to as *follow-on funding* (Text, p. 339)
Three Types of Business Plans
Summary Business Plan (10-15 pages) Full Business Plan (25-35 pages) Operational Business Plan (40-100 pages) (Text, p. 188)
Patent Infringement
Takes place when one party engages in the unauthorized use of another party's patent. (Text, p. 414)
Ethics Training Program
Teach a business ethics to help employees deal with ethical dilemmas and improve their overall ethical conduct. (Text, p. 224)
Types of Start-Up Firms
(1) Salary-Substitute Firms (2) Lifestyle Firms (3) Entrepreneurial Firms
Five Forces Model - Forces that Determine Industry Profitability by Professor Michael Porter
(1) Threat of Substitutes (see p. 155) (2) Threat of New Entrants (see p. 156) (3) Rivalry Among Existing Firms (see p. 157) (4) Bargaining Power of Suppliers (see p. 158) (5) Bargaining Power of Buyers (see p. 159) (Text, begins on p. 154)
Features of Growth Hacking
(A) Structured Experimentation 1-Identify an Improvement 2-Create Hypothesis 3-Run the Test 4-Examine the Results (B) Viral Loops to get customers to keep coming back. (Anita Newton, Video 6)
Co-Founder Traits
*Has important holes to fill *Prefers to not do some startup tasks *Prefers a collaborative style *Strong desire for support or validation *Needs help in a fast-moving business (Kauffman Video 02)
Corporate Entrepreneurship
*Is the conceptualization of entrepreneurship at the firm level. *All firms fall along a conceptual continuum that ranges from highly conservative to highly entrepreneurial. *The position of a firm on this continuum is referred to as its entrepreneurial intensity.
Characteristics of an Entrepreneurial Firm
*Proactive* | *Innovative* | *Risk Taking*
Exclusions from Trademark Protection
-Immoral or Scandalous Matter -Deceptive Matter -Descriptive Marks -Surname (Text, p. 419)
What is protected by a Copyright?
-Literary works -Musical composition -Computer software -Dramatic works -Pantomimes and choreographic works -Pictorial, graphic, and sculptural works (Text, p. 422)
Ways to Gather Insights about your product & the customer's feedback
-Powerpoints -Wireframes -Clay Models -Protytpes -Etc (Video 03 Startups)
Execution Intelligence
The ability to fashion a solid business idea into a viable business is a key characteristic of successful entrepreneurs. (p. 13)
Liquidity
The ability to sell a business or other asset quickly at a price that is close to its market value. (Text, p. 236) A company's ability to meet its short-term financial obligations. (Text, p. 262)
Alternative View of an Entrepreneurship
The art of turning an idea into a business.
Financial Feasibility Analysis
The final component of a comprehensive feasibility analysis. (book p92)
IPO (Initial Public Offering)
The first sale of stock by a firm to the public. (Text, p. 340)
Market Segmentation
The first step in selecting a target market is to study the industry in which the firm intends to compete and determine the different potential target markets in that industry. (Text, p. 367)
Pro Forma or Projected Financial Statements
The heart of the financial section of a business plan. (Text, p. 201)
Burn Rate
The rate at which it is spending its capital until it reaches profitability. (Text, p. 329)
Price/Earnings (P/E) Ratio
The ratio of the price per share to earnings per share; shows the dollar amount investors will pay for $1 of current earnings. Generally the higher a company's price-to-earnings ratio goes, the greater the market thinks it will grow. (Text, p. 267)
One Year After First Use Deadline
The requirement that a patent application must be filed within one year of the milestones. (Text, p. 410)
Design Patents
The second most common type of patent and cover the invention of new, original, and ornamental designs for manufactured products. (Text, p. 411)
Stability
The strength and vigor of the firm's overall financial posture. (Text, p. 262)
Revenue Stream
The ways in which the firm makes money. (book p126)
Disruptive Business Models
These are rare. The ones that do not fit the profile of a standard business model and are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry. (book p118) Types of disruptive business models: (1) New Market & (2) Low-end Market
Heterogeneous
They are diverse in terms of their abilities and experience. (Text, p. 300)
What is the "sixth sense"?
This is entrepreneurial alertness, which is formally defined as the ability to notice things without engaging in deliberate search.
Contribution Margin
This is the amount per unit of sale that's left over and is available to "contribute" to covering the business's fixed costs and producing a profit. (Text, p. 197)
Corporate Venture Capital
This type of capital is similar to traditional venture capital except that the money come from corporations that invest in start-ups related to their areas of interest. (Text, p. 340)
Idea
Thought, an impressions, or a notion. (Text, p. 44)
Competitive Analysis Grid
Tool for organizing the information a firm collects about its competitors. (Text, p. 168)
Social Plug-ins
Tools that websites can use to provide their users with personalized and social experiences. (Text, p. 384)
Lanham Act of 1946
Trademark law that protects words, numbers/letters, designs/logos,sounds, fragrances, shapes, colors, trade dress. (Text, p. 418)
Lease
Written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments. (Text, p. 346)
Financial Statement
Written report that quantitatively describes a firm's financial health. (Text, p. 262)
Current Assets
cash and other assets expected to be exchanged for cash or consumed within a year. (Text, p. 267)
Triggering Event
event that prompts an individual to become an entrepreneur (p. 25)
Profit Margin
net income/net sales (Text, p. 267)
Forecasts
predictions of a firm's future sales, expenses, income, and capital expenditures. (Text, p. 273)
weak-tie relationships
relationships characterized by infrequent interaction that form between casual acquaintances who do not have a lot in common and, therefore, may be the source of completely new ideas (Text, p. 57)
Entrepreneurial Alertness
the ability to notice things without engaging in deliberate search (Text, p. 56)
solo entrepreneurs
those who identified their business ideas on their own (text, p. 57)
According to author and speaker Meg Cadoux Hirshberg, what are three important ways the the entrepreneur should share business information with his/her partner/spouse/family? (Video 4)
(1) Be careful about WHEN you share (not right before bed or when leaving for vacation... maybe a planned weekly discussion) (2) Have a Plan B outlined in case the business fails. This will give the spouse peace of mind to know "what's next." (3) Attend Board Meetings to hear the business information in a business-like setting (without the emotion)
Three Ways to Establish Strong Ethical Culture
(1) Lead by example (2) Establish a Code of Conduct (3) Implement an Ethics Training Program (Text, pp. 221-224)
Guy Kawasaki's Ten Key Points of "The Art of Innovation"
(1) Make Meaning (not money$) (2) Make Mantra (not a mission stmt) (3) Jump to the Next Curve (ice example) (4) Roll the Dicee (lots of features/functions) (5) Don't Worry, Be Crappy (don't wait for perfection) (6) Let 100 Flowers Blossom (Apple PageMaker) (7) Polarize People (TiVo example) (8) Churn Baby Church (keep making it better) (9) Niche Thyself (Unique vs Value) (10) Perfect your Pitch (customize intro & 10 slides, 20 min, 30 font size) BONUS #11 Don't let Bozos grind you down! (Video "The Art of Innovation")
Process of Obtaining Patent
(1) Make sure Practical (2) Determine type of application to file (3) Hire Patent Atty (4) Conduct Patent search (5) File Patent Application (6) Obtain decision from U.S. Patent Office (Text, p. 412)
Four Characteristics of Successful Entrepreneurs (as opposed to the PERSONAL characteristics)
(1) Passion for the business (2) Product/customer focus (3) Tenacity despite failure (4) Execution intelligence
What are the three areas that author and speaker Meg Cadoux Hirshberg say are critical for a budding entrepreneur to sit down and discuss with his/her partner/spouse/family? (Video 3)
(1) Personal Issues - how life will change (2) Financial Consequences (3) End Game Discussions
Kander's equation for an Entrepreneur is... (p69 of Kander's book)
(1) Prove that the Customer exist (2) Prove that the Problem exist (migraine)
Four Principles (Ideas) for Start Ups according to Diana Kander's book "All in Startup: Launching a New Idea When Everything is on the Line" (pagex xv-xviii)
(1) Startups are about finding customers, not building products. IDEA > CUSTOMERS > BUILD > BRAND (2) People don't buy products or services; they buy solutions to their problems. (3) Entrepreneurs are detectives, not fortunetellers. (4) Successful entrepreneurs are luck makers, not risk takers.
The 5 Key Elements of Startup Finance form a pyramid oh which you can build your company. These 5 elements are...
* Monitoring * (Mon FS & Dashboard) ** Budget ** (Operating Budget & LT Forecast) *** Model *** (Business Model - Engine) **** Processes **** (IS & CF Stmt) ***** Foundation ***** (BS & Capitalization) (Bill Reichert Video #2)
Methods to Foster Entrepreneurial Teams
**Workshop Series stressing self-assessment of entrepreneurial and management capabilities **Hands-On Assistance **Climate of Collaboration (Article by Timmons, p 36)
Founder Choices at Three Levels
*Co-Founders - co or solo? *Hiring - hire or wait? *Investors - investors or bootstrap? *RICH* VS *KING* Higher Value VS Lower Value Less Control VS More Control (Kauffman Video 05)
Entrepreneurial Firms' Impact on Society and Larger Firms
*IMPACT ON SOCIETY - The innovations of entrepreneurial firms have a dramatic impact on society. Think of all the new products and services that make our lives easier, enhance our productivity at work, improve our health, and entertain us. *IMPACT ON LARGER FIRMS - Many entrepreneurial firms have built their entire business models around producing products and services that help larger firms become more efficient and effective.
What's the Economic Impact of Entrepreneurial Firms?
*INNOVATION - Process of creating something new, small innovative firms are 16 times more productive than larger innovative firms in terms of patents per employee. *JOB CREATION - Small businesses create a substantial number of net new jobs in the United States. Firms with 500 or fewer employees created two million of the roughly three million private sector jobs in 2014.
Levels of Shared Value
*Meeting societal needs through products. *Utilizing resources, suppliers, logistics, and employees more productively. *Improving the local business environment. (Porter Video)
Founder Dilemma Checklist per Wasserman
*Not going to change business model/strategy *No pivots throughout life of venture *Everyone will be scaling/contributing at high levels *No doubts (Kauffman Video 04)
Solo Founder Traits
*Strong preference for full control of all decisions *Does not have strong need for support *Has deep human, social & financial capital *The business is in a small or slow-moving industry (Kauffman Video 02)
Changing Demographics of Entrepreneurs
*Women Entrepreneurs *Minority Entrepreneurs *Senior Entrepreneurs *Millennial Entrepreneurs
Business Plans vs. Business Models (per Steve Blank)
+Business Plans have known variables for execution (for existing companies) +Startups tend to use *Business Models* to test hypotheses (Video 02 Startups)
Outline of a Business Plan
-Cover Page -Executive Summary -Industry Analysis -Company Description -Market Analysis -Economics of the Business -Marketing Plan -Product Design & Development Plan -Operations Plan -Overall Schedule -Financial Projections -Appendix (Text, p. 190-202)
Why do people become entrepreneurs?
-Problem Solver (see something broken) -Sense of Autonomy (having control) -Authenticity (Pink Video 03)
Trade Secret Protection Methods
-Restricting access -Labeling documents -Password protecting confidential computer files -Maintain logbooks for visitors _Maintain logbooks for access to sensitive materials - Maintain adequate overall security measures (Text, p. 428)
Ways to Engage rather than Manage
-Workforce Autonomy, let EEs make their own schedules -Dial up notch toward Autonomy and away from control NOTE: If you're concerned about what will happen when people have more autonomy, you might not have a motivation problem, you might have a HIRING problem. You need to be able to trust your people. (Pink Video 04)
Industry
A group of firms producing similar or identical products. (book p85)
What is the "slow hunch" as described by TED speaker Steven Johnson?
A long incubation period, "... how great ideas often happen; they fade into view over long periods of time."
Uniform Trade Secrets
Drafted in 1979, attempted to set nationwide standards for trade secret legislation. (Text, p.426)
Constant Ratio Method Forecasting
Each expense item on the income statement will grow at the same rate as sales. (Text, p. 275)
Corporate Entrepreneurship
Established firms with an orientation toward acting entrepreneurially (Text, p. 7)
Equity Financing
Exchanging partial ownership of a firm, usually in the form of stock, in return for funding. (Text, p. 334)
What does progress depend on?
FEEDBACK (Pink Video 05)
Certification Marks
Marks, words, names, symbols, or devices used by a person other than its owner to certify a particular quality about a product or service. (Text, p. 418)
Double Taxation
Means that a corporation is taxed on its net income and, then the same income is distributed to shareholders in the form of dividends, is taxed again on shareholders' personal income tax returns. (Text, p. 240)
Window of Opportunity
Metaphor describing the time period in which a firm can realistically enter a new market. (Text, p. 43)
Percent-of-Sales Method
Method used for expressing each expense item as a percentage of sales. (Text, p. 275)
Limited Partnership Agreement
Sets forth the rights and duties of the general and limited partners, along with the details of how the partnership will be managed and eventually dissolved. (Text, p. 239)
Executive Summary
Short overview of the entire business plan; it provides a busy reader with everything she needs to know about the new venture's distinctive nature. (Text, p. 190)
Capitalization Table
Show the different classes of ownership in your company. -Common Stock Holders -Reserve Stock Options -Stock Warrant Options (option to buy stock at some point in future at a set price) -Preferred Stock -Convertible Notes (debt tool that can be converted into equity) (Bill Reichert Video #4)
Balance Sheet
Snapshot of a company's assets, liabilities, and owner's equity at a specific point in time. (Text, p. 267)
Regression Analysis
Statistical method used to determine whether a relationship exists between variables for the purpose of predicting future values. (Text, p. 274)
Entrepreneurial Process
Step 1-Deciding to become Entrepreneur Step 2-Developing successful business ideas Step 3-Moving from an idea to an Entrepreneurial Firm Step 4-Managing & growing the Firm (Text, p. 25)
The Entrepreneurial Process
Step 1: Deciding to become an entrepreneur. Step 2: Developing successful business ideas. Step 3: Moving from an idea to an entrepreneurial firm. Step 4: Managing and growing the entrepreneurial firm.
Private Placement
The direct sale of an issue of securities to a large institutional investor. (Text, p. 343)
Break-Even Point
The point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zero. (Text, p. 275)
Entrepreneurship
The process by which individuals pursue opportunities without regard to resources they currently control for the purpose of exploiting future goods and services. (Text, p. 6)
Entrepreneurship per Text
The process by which individuals pursue opportunities without regard to resources they currently control.
INNOVATION
The process of creating something new, which is central to the entrepreneurial process.
Feasibility Analysis
The process of determining if a business idea is viable. (book p77) --investigative in nature and EARLY in process-- Additionally, it is the preliminary evaluation of a business idea, conducted for the purpose of determining whether the idea is worth pursuing.
Disintermediation
The process of eliminating layers of middlemen, such as distributors and wholesalers, to sell directly to customers. (Text, p. 386)
Brainstorming
The process of generating several ideas about a specific topic. (Text, p. 59)
Due Diligence
The process of investigating the merits of a potential venture and verifying the key claims made in the business plan. (Text, p. 339)
Business Plan
Written narrative, typically 25 to 35 pages long, that describes what a new business intends to accomplish and how it intends to accomplish it. (Text, p. 182-3)
Operational Business Plan
Written primarily for an internal audience and ranges from 40-100 pages. It is a blueprint for a company's operations. (Text, p. 188)
Entrepreneurial Intensity
the position of a firm on a conceptual continuum that ranges from highly conservative to highly entrepreneurial. (Text, p. 7)
Creativity
the process of generating a novel or useful idea (Text, p. 57)
Opportunity Recognition
the process of perceiving the possibility of a profitable new business or a new product or service (Text, p. 56)
