Entrepreneurship
List the seven lesser-known truths about entrepreneurship
(1) entrepreneurship is not reserved for startups; (2) entrepreneurs do not have a special set of personality traits; (3) entrepreneurship can be taught and it is a method that requires practice; (4) entrepreneurs are not extreme risk takers; (5) entrepreneurs collaborate more than they compete; (6) entrepreneurs act more than they plan; (7) entrepreneurship is a life skill.
9 components of the Business Model Canvas.
(1) value proposition. Customers relate to (2) customer segments, (3) channels (4) customer relationships. Infrastructure includes (5)key activities, (6) key resources (7) key partners. Financial viability includes (8) cost structure (9) revenue streams.
Task Completion
(also known as usability testing) involves watching someone using your product to understand what works and what doesn't.
Corporate entrepreneurship
(or intrapreneurship) is entrepreneurship within large corporations.
Early adopters (next 13.5% of customers)
- 2nd group to adopt a product - usually influential people from business or government
Principles of Entrepreneurial Thinking
- Bird in Hand Principle - Affordable Loss Principle - Lemonade Principle - Crazy-Quilt Principle - Pilot in the Plane Principle
IDEO's Three Phases of Design Thinking
- Divergence Inspiration(empathize) whats the problem? - Ideation (Create) How might we solve the problem? - Convergence Implementation (test) how can we make it better?
Experiments most commonly uses
- Interview - Paper Testing - Advertising - Button to Nowhere - Landing Page - Task Completion - Prototyping - Preselling - Concierge & Wizard of Oz - Live Product & Business
Different types of prototypes
- MVP - Rapid Prototypes - Mock-up Prototype - High Fidelity Prototype - LEGO Prototypes - Role-Playing - Wizard of Oz Prototypes - User-Driven Prototypes - Pilots & Prototypes - Storyboards
7 Skills of Designers That Entrepreneurs Should Have
- Observation - Listening - Desire Change - Context & Integration - Solution-drive - Consideration - Unbound
CVP main approaches
- all-benefits focus is on the product - points-of-difference focus on the competition - resonating-focus focus on the customer
right brain thinking
-Big-picture oriented -Presents possibilities -Intuition -Emotional -Synthesizing -Spatial -Nonverbal processing -Drawing -Manipulating objects -Subjective -Creative -Experiential -Symbols -Images -Dreaming
left-brain thinking
-Detail oriented -Forms strategies -Logic -Rational -Analytical -Verbal-Quantitative processing -Talking -Writing -Objective -Linear -Directive -Words -Language -Reasoning
7 Strategies for Idea Generation
1. Analytical strategies 2. Search strategies 3. Imagination-based strategies 4. Habit-breaking strategies 5. Relationship-seeking strategies 6. Development strategies 7. Interpersonal strategies
3 Steps to cross the chasm
1. Create the entire product first 2. Position the product 3. Distribute the product through the right channels
why marketing sizing is important
1. It estimates the number of sales and resulting profits of new products or customer segments. 2. It identifies growth opportunities in different product lines and customer segments. 3. It helps to pinpoint competitive threats and how to develop strategies for those threats. 4. It forces you to think about exit strategies or pivot points in the future. 5. It gives you a sense of market trends and their potential to impact your business in the future. 6. It is important for investors who want to see evidence of a large enough market to justify their investment.
3 factors that define a beachhead market:
1. The customers in that market buy similar products. 2. Those customers have similar expectations of value. 3. The customers use word of mouth to communicate to others in similar regions or professional organizations
8 key of the Entrepreneurship Method
1. identify your desired impact on the world; 2. start with the means at hand; 3. describe the idea today; 4. calculate affordable loss; 5. take small action; 6. network and enroll others in your journey; 7. build on what you learn; 8. and reflect and be honest with yourself.
Benefit Corporation (B Corp)
A form of social entrepreneurship, designates for-profit firms that meet high standards of corporate social responsibility.
Market
A market is a place where people can sell goods and services (the supply) to people who wish to buy those goods and services (the demand)
Search Pathway
A pathway used when entrepreneurs are not quite sure what type of venture they want to start, so they engage in an active search to discover new opportunities.
MVP (minimum viable product):
A version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.
interpersonal strategies
Actions that involve group members generating ideas and building on each other's ideas.
search strategies
Actions that involve using a stimulus to retrieve memories in order to make links or connections based on personal experience that are relevant to the current problem.
Experiments
An experiment is a test designed to help you learn and answer questions related to the feasibility and viability of your venture. Experiments need to have a clear purpose, be achievable, and generate reliable results.
Pilot in the Plane Principle
Control the controllable
Explain how to develop the habit of creativity.
Creativity is defined as the capacity to produce new ideas, insights, or inventions that are unique and of value to others. - Developing the habit of creativity requires engaging in new experiences, making new associations, and letting go of fears and insecurities.
Concierge and Wizard of Oz
During the concierge test, the customer interfaces with the product but the "technology" is going on behind the scenes, while during the Wizard of Oz test, customers think they are interfacing with the real product, but it is actually you behind the scenes manually providing the service.
Identify the 4 core areas of a business model.
Each business model includes an offering, customers, infrastructure financial viability.
Act-Learn-Build
Entrepreneursip aren't extreme risk takers they use Act-Learn-Build
The Worldview
Expert entrepreneurs believe that the future is shaped by people. They believe that if they can make the future happen, they don't need to worry about predicting the future, determining perfect timing to start, or finding the optimal opportunity. - Sarasvathy calls this "effectual logic" which sits opposed to "causal logic" taught to managers in more certain (or predictable) circumstances.
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 analysesand strategic planning.
GRIT
Grit is passion and perseverance for very long-term goals. - building grit "growth mindset"
Empathy Map
Helps integrate interview data into insights by considering: -What did they SAY? -What did they DO? -What might they be THINKing? -FEEL: What emotions do you think they are experiencing?
Design Thinking Phases and Outcomes
Inspiration: Design challenge & user needs Ideation: Potential solution to meet needs Implementation: Prototyping & test solutions
Demonstrate how to interview potential customers in order to better understand their needs.
Interviews should be done for two reasons: (1) to develop a better understanding of user needs during the inspiration phase of design thinking and (2) to get feedback on ideas during the implementation phase. - The interview must be well-prepared, the customer must be listened to and intelligent questions asked, and the interview must be evaluated when it is over.
Lemonade Principle
Leverage contingencies - Embrace surprises that arise from uncertain situations, remaining flexible rather than tethered to existing goals.
self-leadership
Methods to increase self-awareness and manage behaviors particularly when dealing with necessary but unpleasant tasks. These strategies include: self-observation, self-goal setting, self-reward, self-punishment, and self-cueing
Appraise the effectiveness of mindset in entrepreneurship.
Part of the Entrepreneurship Method is having the right mindset (or mental attitude) to start and grow a business. Entrepreneurs who have the right mindset are more likely to persist with ideas and act on potential opportunities.
Early majority (next 34% of customers)
People take interest in a new product as it begins to have mass market appeal. - look for opinion from others
Explain the importance of action and practice in entrepreneurship
Practice and action make it possible to achieve success. Many of the successful entrepreneurs behind major corporations today established their companies by acting, learning, and building what they learned into their next actions. Many entrepreneurs have learned entrepreneurship by doing entrepreneurship
Explain how to develop the habit of self-leadership.
Self-leadership is a process of self-direction that is developed by using behavior strategies, reward strategies, and constructive thought patterns.
Affordable Loss Principle
Set affordable loss - Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside.
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.
Explain the importance of the Customer Value Proposition.
The CVP outlines exactly how the firm will generate value, how it will generate it in excess of its competition, and how it will continue to do so in the future. As the true measure of any business is creating value, the true measure of a business model is its customer value proposition.
Distinguish between entrepreneurship as a method and as a process.
The Entrepreneurship Method outlines the tools and practices necessary to take action. Entrepreneurship as a process, instead, guides would-be creators along a thorough but static path from inception to exit.
business model
The business model is the framework for creating and delivering consumer value, while extracting value for the entrepreneur as well.
Compare and contrast the prediction and creation approaches to entrepreneurship.
The two main perspectives on entrepreneurship are the predictive logic, the older and more traditional view; and the creation logic, which has been developed through recent advances in the field. Prediction is the opposite of creation. Whereas prediction thinking is used in situations of certainty, the creation view is used when the future is unpredictable.
Button To Nowhere
This just means that when your users click on the feature, nothing happens. - great way to measure user interest in a new feature
Describe the role of empathy in the design-thinking process.
To create meaningful ideas and innovations, we need to know and care about the people who are using them. Developing our empathic ability enables us to better understand the way people do things and the reasons why; their physical and emotional needs; the way they think and feel; and what is important to them.
Explain the importance of market sizing in growing your customer base.
When it comes to creating market opportunity, investors will want to see that you have thought through three important acronyms that represent different subgroups of the market: TAM, SAM, and SOM.
Market sizing
a method of estimating the number of potential customers and possible revenue or profitability of a product or service.
Find Pathway
a pathway that assumes that opportunities exist independent of entrepreneurs and are waiting to be found.
design pathway
a pathway that can uncover high-value opportunities because the entrepreneur is focusing on unmet needs of customers, specifically latent needs.
Effectuate pathway
a pathway that involves using what you have (skills, knowledge, abilities) to uncover an opportunity that uniquely fits you.
Opportunity
a way of generating profit through unique, novel, or desirable products or services that have not been previously exploited.
Development Strategies
actions that involve enhancing and modifying existing ideas in order to create better alternatives and new possibilities
imagination-based strategies
actions that involve suspending disbelief and dropping constraints in order to create unrealistic states, or fantasies
analytical strategies
actions that involve taking time to think carefully about a problem by breaking it up into parts, or looking at it in a more general way in order to generate ideas about how certain products or services can be improved or made more innovative
habit-breaking strategies
actions that involve techniques that help to break our minds out of mental fixedness in order to bring about creative insights
Protype
an early and often crude version of a product - many different types
Franchising and buy-outs
are popular ways to start relatively near the ground level.
Inside entrepreneurs
are similar to corporate entrepreneurs, but they can be found in any type of organization, large or small, nonprofit or for-profit, and even among governing bodies.
Serial entrepreneurs
are so committed to entrepreneurship that they're constantly on the move creating new businesses.
Late majority
customers are typically skeptical, pessimistic, risk averse, and less affluent than the previous groups.
consumer
customers who actually use a product or service
Business Model: Financial viability
defines the revenue and cost structures a business needs to meet its operating expenses and financial obligations.
The Entrepreneurship Method
designed so entrepreneurs can embrace and confront uncertainty rather than avoid it. - emphasizes smart action over planning.
Family enterprises,
entrepreneurship started within the family,
Interview
fast & inexpensive way to get insights into your idea from your target customers before you begin the experiment.
4 pathways to opportunity identification
find search effectuate design
Crossing the chasm involves:
focusing your resources on a single, primary market first, known as a beachhead market, before winning over that market and then using that momentum to dominate larger markets
Live Product & Business
gathered enough insights and validation to launch your live product and business in the marketplace.
Landing Page
gauge the level of customer response to your business's website is to include a particular call to action such as "click here for more information."
why do we do experiments?
guide us toward which customer opinions to listen to, what important product or service features should take priority, what might please or upset customers, and what should be worked on next. An experiment begins with a hypothesis, which is an assumption that is tested through research and experimentation.
Importance of crossing the chasm gap
important to first identify your specific market segment (the first pin), or beachhead market, and then create a plan to expand from that segment to other segments before finally reaching the broader market
Advertising
involves spreading the word about your business using brochures or social media directed to your relevant target market and assessing the level of response.
Laggards (final 16% of customers)
last to adopt a new innovation. - tend to have a negative attitude toward technology in general & have a strong aversion to change.
High Fidelity Prototype
more sophisticated version of a mock- up that has enough functionality to allow users to really interact with the product or service. - EX: An app that includes customer functions and some animation
Creation
most concerned with acting and collecting new data—real and relevant data—in order to create the future. - only choice under conditions of extreme uncertainty.
relationship-seeking strategies
plans of action that involve consciously making links between concepts or ideas that are not normally associated with each other
Rapid Prototypes
quickly created models used to visualize a product or service. - could be made out of crude paper models or storyboards.
Prediction
requires thinking about and analyzing existing information in order to predict the future - better suited when we can deduce the future from the past
Paper Testing
simple way to outline your vision and to spot any mistakes before the process goes any further. - range of techniques, including wireframe (or blueprint), storyboarding, or drawing the product you envision.
Customer
someone who pays for a product or service.
Preselling
testing technique that involves booking orders for your product before it has been developed
Define "entrepreneurial mindset" and explain its importance to entrepreneurs.
the ability to quickly sense, take action, and get organized under certain conditions. Of the two mindsets proposed by Carol Dweck, the growth mindset represents a fundamental belief that failure is something to build on, and a learning mindset is essential for personal and professional growth.
growth mindset
the assumptions held by people who believe that their abilities can be developed through dedication, effort, and hard work.
fixed mindset
the assumptions held by people who perceive their talents and abilities as set traits
"Chasm"
the biggest difficulty is making the transition between early adopters & the early majority
SOM (Share of Market)
the portion of SAM that your company is realistically likely to reach
Business Model: Infrastructure
the resources (people, technology, products, suppliers, partners, facilities) that an entrepreneur must have in order to deliver the CVP.
SAM (serviceable available market)
the section of the TAM that your product or service intends to target
TAM (Total Available Market)
the total market demand for a product or service.
Innovators (2.5% of customers)
those buyers who want to be the first to have the new product or service
LEGO Prototypes
useful for creating rough, simple prototypes of your ideas
Mock-Up Prototype
usually presented as a 2D or 3D model that looks like the finished product but lacks the right functionality
Business Model: Offering
what you are offering to a particular customer segment, the value generated for those customers, and how you will reach and communicate with them.
The Golden Circle
what, how, why
Social entrepreneurship
—entrepreneurship focused on making the world a better place—is manifested in nonprofit and large, for-profit firms alike.
