MGMT 470: Ch. 4 - Small Business Ideas: Creativity, Opportunity, and Feasibility

Two versions (version A & B) of the site are posted and are served up randomly to prospective customers → then pick the winner

A/B

(_____) Screen: "______ ______ ______" A fast technique for making initial assessments (called screens) of prospective business ideas based on 5 questions

RBI, Really Big Idea

The __________ method works because it helps you step outside the usual way you look at opportunities or try to solve problems.

SCAMPER

_________ is a very effective method for helping business owners and their employees come up with alternative solutions and opportunities.

SCAMPER

__________ is a tool to help you identify new opportunities.

SCAMPER

(5) Primary Areas of a Classic Feasibility Study: Description of your business: What business are you really in?

business idea

(5) Primary Areas of a Classic Feasibility Study: 1. The ______ _____ 2. The _______ 3. The _____ & _____ 4. _____ ______ 5. _____ _____ _____

business idea, product/service, industry & market, financial projections, future action plan

Ways to identify and organize key information on a business and how it achieves its goals

business models

1st Step - Feel: Decide you have a great idea & want to start a business The ______ Model

causal

(3) Traditional Problems Facing New Ideas: 1. The idea cannot be ______ ______ into a product or service 2. The resulting product or service does not appeal to a _____ ____ _____ to make the effort ______ 3. The product/service works, has a market, & can profitable, but you need _____ _____ to make the idea into a business

economically made, large enough market, profitable, additional people

1st Step - Feel: Recognize you want to start a business The ______ Model

effectuation

(2) Ways to Think About Opportunity & Business Creation: 1. The ________ Model 2. The _______ Model

effectuation, causal

A special set of observational and thinking skills that help entrepreneurs identify good opportunities;

entrepreneurial alertness

the ability to notice things that have been overlooked, without actually launching a formal search for opportunities, and the motivation to look for opportunities

entrepreneurial alertness

The extent to which an idea is viable and realistic and the extent to which you are aware of internal (to your business) and external (industry, market, and regulatory environment) forces that could affect your business

feasibility

Any sort of outcome (a product, service, outcome, or situation) customers or potential customers would like to encounter or be able to depend on

gain

(4) Step Process for Organizing Creative Thinking: The lightbulb comes on and ideas begin to flow

illumination

Strategies that involve doing the same thing = an ________ strategy

imitative

_______ Strategy: Doing the same thing as others

imitative

__________ Strategy: An overall strategic approach in which the entrepreneur does more or less what others are already doing

imitative

_______ Strategy: Offers a slightly better way to do something

incremental

________ Strategy: Taking an idea and offering a way to do something slightly better than it is done presently

incremental

(4) Step Process for Organizing Creative Thinking: Thinking about the problem or opportunity in a "not-conscious" way, putting it on the back burner

incubation

(5) Primary Areas of a Classic Feasibility Study: Current Industry: Describe the industry as specifically as you can

industry & market

Searching and capturing new ideas that lead to business opportunities

opportunity recognition

This process often involves creative thinking that leads to the discovery of new and useful ideas

opportunity recognition

Any sort of problem, annoyance, source of aggravation, shortcoming, or suboptimal situation customers or potential customers face

pain

2 driving forces of creating new products or services: _____ or ______

pain or gain

(5) Questions of the RBI Screen: Who are you?

people

(5) Questions of the RBI Screen: 1. _______ 2. _______ 3. _______ 4. ______ ______ 5. ______ _____

people, offering, customer, value proposition, distinctive competencies

A preliminary run of a business, sales effort, program, or website with the goal of assessing how well the overall approach works and what problems it might have

pilot test

(4) Steps of the Entrepreneurial Process: Offer your product or service to your customers and see if you get any sales

plan

(4) Step Process for Organizing Creative Thinking: Exploring the problem or opportunity from all directions

preparation

(4) Step Process for Organizing Creative Thinking: 1. ________ 2. _______ 3. _______ 4. _______

preparation, incubation, illumination, verification

________ Strategy: Rejecting existing ideas and presenting a way to do things differently

radical innovation

________ Strategy: Presents a different way to do things

radical innovation

(11) Most Important Factors in the Business Model Canvas Approach: (Pt. 2) 7. ______ 8. ______ ______ 9. ______ ______ 10. ______ ______ 11. ______

revenues, key resources, key activities, key partners, costs

A payment to a licensor based on the number or value of licensed items sold

royalty

List money needed, including the cost of goods sold, marketing & administrative expenses, and additional costs like rent and utilities

start-up capital

(5) Questions of the RBI Screen: Why do they (customers) care?

value proposition

Small business owners' unique selling points (ie., benefits) that customers can expect from your goods and services, including benefits that differentiate your offering from those of the competition

value proposition

(4) Step Process for Organizing Creative Thinking: Testing the idea and reducing it to its most exact form

verification

(6) The Sources of Business Ideas: 1. _______ & ______ _____ 2. A similar ______ 3. _______ 4. _______ & ______ 5. Education or _______ 6. _____ sites

work, personal experience, business, chance, family & friends, expertise, idea

(4) Steps of the Entrepreneurial Process: Assess what you know and who you know to determine your product or service and your customers

check

A process producing an idea or opportunity that is novel and useful, frequently derived from making connections among distinct ideas or opportunities

creativity

(5) Questions of the RBI Screen: Whom are you offering it to?

customer

(11) Most Important Factors in the Business Model Canvas Approach: (Pt. 1) 1. ______ ______ 2. ______ 3. ______ 4. ______ ______ 5. ______ 6. ______ ______

customer segments, problem, solution, value proposition, channels, customer relationships

(4) Online Pilot Testing Procedure: 1. ______ 2. _____ 3. ______ 4. _____

deploy, track, revise, repeat

(5) Questions of the RBI Screen: Do you have any key or core science/technology or feature?

distinctive competencies

(4) Steps of the Entrepreneurial Process: If you get enough sales, keep going. If not, go back to check

do

(4) Steps of the Entrepreneurial Process: Recognize you want to do or make something through a business

feel

(4) Steps of the Entrepreneurial Process: 1. _______ 2. ______ 3. _______ 4. _______

feel, check, plan, do

(5) Primary Areas of a Classic Feasibility Study: Pricing: How much will you charge for your product or service?

financial projections

When a free version is offered and users have the option to pay to move up to premium features.

freemium

(5) Primary Areas of a Classic Feasibility Study: Start-Up Capital: How much money do you need to start the business?

future action plan

(5) Questions of the RBI Screen: What are you offering?

offering

(5) Primary Areas of a Classic Feasibility Study: Unique Features (Benefits): What are the unique features of the product or service?

product/service

The measure of how many visitors to your website are actually willing to make a commitment to the product or service promoted on the site

conversion rate

The _______ approach is one in which you want to create a particular product or service that does not yet exist, and to achieve that end, you have to cause the product or service to exist.

causal

Which model is more action-oriented? The ______ Model

causal

A legal agreement granting you rights the use a particular piece of intellectual property

license

the person or firm that is obtaining the rights to use a particular piece of intellectual property

licensee

The person or organization that is offering the rights to use a particular piece of intellectual property

licensor

Describes how the entrepreneur assesses whether the situation faced is one that is the same as it has been traditionally or if it is changing

opportunity identification process

Researched believe _______ _______ might be the most basic and important entrepreneurial behavior.

opportunity recognition

(5) Major Pitfalls that Hinder Innovation: 1. Identifying the _____ _____ 2. ______ ideas too quickly 3. Stopping with the _____ _____ _____ 4. Failing to ______ 5. Obey _____ that don't exist

wrong problem, judging, first good idea, act, rules