ENT Modules 7-10 Review
To do this, a lean startup deploys a feedback loop approach to market introductions. This feedback loop is called?
"Build-Measure-Learn"
False
"Embellishments" represents entrepreneurs engaging in deception where the Information shared is known by the entrepreneur to consist of more falsehoods than fact
The work systems change model
"change agents should focus on systematic changes in work settings as the starting point in change efforts, and individual behavior change as a key mediator associ- ated with organizational outcome change."
Complete Fabrications
( Complete Deception) The entrepreneur shares information that he or She knows to be absolutely false - paints a picture of events and circumstances that never happened or will never happen.
Misrepresentations
( Medium deception) The information shared is known by the entrepreneur to consist of more falsehoods than fact.
What must happen to realize these indicators?
(1) The new or revised product must be out in the market (2) Measure-via collecting needed data (3) Willingness to analyze the data and learn from it - possibly making further iterations.
Embellishments
(Low deception) The foundation is true, but the information shared is known by the entrepreneur to be false and added to the fringe of what is fact.
Best Jobs for aspiring entrepreneurs
- Jobs that build background - Jobs with entrepreneurial skills - Jobs available after hours
How to avoid these situations as an Entrepreneur
-Avoid the assumption that a concept you've proven in even multiple implementations will perform the same way at mass scale. -Avoid the temptations and risks that accompany fast growth. -Watch out for the ease that comes with affiliation. -When a line is crossed, now what? -Learn self-awareness of the traits that make entrepreneurs particularly vulnerable.
The entrepreneur shares information that he or She knows to be absolutely false - paints a picture of events and circumstances that never happened or will never happen.
-Beware of making an investment of more than 10% of your worth -Beware of an investment that guarantees a return above the norm 7-8% -Check into the legality of the investment -Never enter a program that requires haste -Beware of the allure of investing with friends -Beware of direct-selling programs in which the compensation -The model promises extremely high-income possibilities for -building a downline of participants. -Beware of unregistered investment -Whether you are required to participate as an accredited investor or not, -The guidelines of accredited investing can help
Three things learned about business plans?
1.) Business plans rarely survive first contact with customers 2.) No-one requires 5-year plans to forecast complete unknowns. 3.) Start-ups are not smaller versions of larger companies
What are the three levels of entrepreneurial fraud?
1.) Embellishments 2.) Misrepresentation 3.) Complete fabrications
What are the three key principles of the lean method?
1.) Founders summarize their hypothesis in a framework called a business model canvas 2.) Use customer development to test their hypotheses. (nimbleness and speed) 3.) Agile Development
What percentage of start ups fail?
75%
growing, scaling
A Company that gains $10,000 per month in new revenue for which they spend only $11,000 to secure the sales and deliver the product or service is an example of a company that is ____________________ but not __________.
true
Acccording to the AV podcast, Dr. Scheaf noted that when it comes to fraud, Entrepreneurs intent to do what they claim does not matter
loss
According to the AV Podcast Dr. Scheaf noted that one of the more common situations Where entrepreneurs commit fraud is when they find themselves in a _____ condition
True
According to the AV podcast, one important step in building operational strength is to "execute the systems"
False. This is called the "Work systems change model"
According to the assigned reading, the "drive change synergy model" Focuses on aligning the systems within which the work of innovation is done.
True: It's not a product, its is a process
According to the assigned reading, the MVP doesn't have to be a product
Task
According to your reading, there are eight levers of environment work. One of these is _____________ which reflects "work processes, protocols, and pathways".
No one besides venture capitalists requires 5-year7 plans Business plans rarely survive their first contact with customers Start-Ups are not smaller versions of large companies
After decades of watching thousands of start-ups follow the "standard regime" researchers have learned what three things?
Is an MVP just a product?
An MVP is a process that you repeat over and over again: identify your riskiest assumption, and find the smallest possible experiment.
business environments that are bigger than their resources
Authors outlined profit generation in rapid growth firms si hard for two reasons. First, constant change prevents the realization of efficiencies and they operate in _________________.
A Leading Start-up accelerator
Based on the AV podcast, what is the Y Combinator?
Rapidly growing companies
Companies that grow at an average rate that is greater than 20% per year in number of employees for at least 4 to 5 years in a row
What problems do companies face if they do not find a business model to market fit?
Customers who don't understand the value of the product Very low sales volume Few repeat customers No word of mouth business Inability of attracting media and other attention
Stigma, can't be trusted
Dr. Wood noted that one of the scary things about entrepreneurial fraud is that it creates A __________ where entrepreneurs intent to do what they claim does not matter.
margin
Dr. Wood's motto was to focus on ___________. How much we sell matters a whole lot less than how much we make.
blood analyzer
Elizabeth Holmes and her company Theranos is a high profile example of entrepreneurial fraud. Theranos raised more than $700 million from late 2013 to 2015 while deceiving investors bt making it appeal as if theranos has Successfully developed a commercially ready portable _________________
What is entrepreneurial Fraud?
Enterprising individuals (alone or in groups) deceiving stakeholders by sharing statements about themselves, their individual capabilities, elements of new market offerings, and/or new venture activities that they know to be false in order to obtain something of value.
Fraud, deceiving, false
Entrepreneurial ___________ is enterprising individuals _____________ stakeholders By sharing statements about themselves, their individual capabilities, elements of new Market offerings, and/or new venture activities that they know to be ______ in order To obtain something of value
operational
Entrepreneurs tend to be busy on bringing the product to market, advertising the product and selling so the ___________ aspects of the business are not developed in unison.
Nerdy Nuts
Faced backlog of 500K of orders Rapid growth created extra stress Pivitoted to produced edition drops Had margin of 60% Changed to sell out model. Sold peanut butter one day a week. Would close the sight after selling out in two minutes.
Jobs with entrepreneurial skills
Focus on jobs that align with your aspirations. You'll be able to develop the skills you need either to start your venture on a full-time basis or as a side job to eventually transition into your own full-time business.
What is the 40% rule?
If _________ or more of a product's users would be very disappointed if the product disappeared, then it is telling An indicator that market fit has been achieved.
40% rule
If customers would not be disappointed that your product is not on the market then you would have fail the
failure
If you don't focus on scale and instead just focus on growth, a not so funny thing can happen, The growth of the business outpaces the ability of the business to deliver. Put Simply, Growth can lead to ___________
No Market Need
In a study of 100 startups, the number one cause of startup failure was?
Opportunities
In entrepreneurial fraud, these opportunities arise from commercial activity (i.e., doing business) that creates situations where one has the chance to take advantage of customers, investors, suppliers, or other stakeholders.
Replicate Below
In order to scale, business processes need to be reliable and to so that you will need to promote your best staff and in tuen, they need to develop the people below them to adapt their best practices. This reflects ______________ as one one of the areas you must master.
What is my riskiest assumption
In the MVP process you should always ask?
True
In the Nerdy Nuts case, the founder wondered lately if the rapid growth of the business has been more trouble than its worth
Jobs that build background
It can also make financial sense to start a new venture as a side job because not all new businesses become successful. Half of all new companies are forced to close within five years of opening their doors. Having an income you can count on while you grow your own business can be a solid strategy for success. Be careful, though, that your side gig doesn't violate your employment contract.
What is the Lean Start-Up?
It is an approach to creating and managing new market offerings by getting the product to the customer as quickly as possible and then iterate based on what is learned.
What assessment should we use to assess product-market fit?
Measure and learn
A key component of the feedback loop is an MVP Which stands for?
Minimal Viable Product
False
One of the realities of business is that demand should be the driver of growth. If you can sell more you should.
Problems concerning business planning
One of your assigned readings outline the different problems created by rapid growth. Which of the following is not one that was listed?
What is required to commit fraud?
Opportunities
What are the three sides of the fraud triangle?
Pressure, Opportunities, and Rationalization
Solutions to rapid growth issues
REcuriting, selection and training Team or matrix structures or team building Managing the culture Planning Organizing and staffing the personnel function Being sensitive and tough at the top
Rationalization
Self-talk and self-justification that unethical / illegal behavior is justified given the situation or circumstances.
What are the 4 indicators of fit?
Steady growth in user/customer Growth in revenue Generating profit or trending in the direction of profit. Reduced reliance on investment capital to sustain operations
Learn
The Lean start-up method deploys a "Build - Measure - ________"
False
The lean start-up approach involves operating in "stealth mode" -Keeping the new offering secret from competitors by exposing prototypes to only a few trusted customers.
Common Problems that seem to plague rapid growing companies
The need for rapid decisions Rapidly expanding job demands Large recruiting and training demands Constant Change Constant strain on resources
To move your business past growth and into scale, there are four things you must remember:
Vision Alignment Hire Strategically Replicate below Product mastery
Growth in Revenue Generating profit or trending in the direction of profit Steady growth in user/customer
What are indicators of Business model fit?
Problems caused by constant change Problems caused by training demands Problems caused by need for rapid decsions.
What are some of the problems created by rapid growth outlined in your reading?
Create scalable management model Develop a quality control system Execute the Systems Listen to the numbers
What are the 4 steps to building operational strength?
Managerial cpacity/attention Operational capacity Quality control Cash Flow Price Stability Capital structure
What are the 6 operational elements underpinning growth?
Capital Structure Cash Flow Marginal Capacity
What are the operational elements underpinning growth so you can achieve scale
scale
When companies add revenue at a faster rate than they take on new costs. The companies gains outpace its losses.
Growth
When companies are increasing their revenue, but they might be equally adding costs to enable that increase. They actually lose money on increased revenue.
Moral Disengagement
When one convinces him/herself that ethical standards do not apply to them within a particular situation or context, in part because others in the situation or context is known to violate the standards.
Increased reliance on investor capital
Which of the following is not an indicator of business model fit?
Institutional environments
While Business activity provides rich opportunities for entrepreneurial fraud, _____ Play a critical role in permitting or constraining these opportunities.
Scaling Negative Value
You do more and more of something that doesn't create value. This happens when you do not do the above three things.
Jobs available After hours
You may have an opportunity for an entrepreneur-type role within the organization, and you'll be well-positioned for success when it's time to launch your own business. Another way to get started is to join a company on the ground floor as a co-founder, where you'll have someone to share the workload and startup costs. CoFoundersLab is a site where potential entrepreneurs look for co-founders. You can also use it to find someone to partner with you. Working at a startup is one of the best ways to learn what's involved in being an entrepreneur. Choose a startup that aligns with your interests, and you'll get some fast-paced experience as well as a chance to see what it's going to be like running your own company.
Product Market fit
customers should be using your product explosively
Product Market Fit
occurs when you have evidence that your offering is actually creating value for customers by alleviating their pains or creating the advantages they desire.
What role do institutional environments play in fraud?
permitting or constraining these opportunities. Research shows that formal institutional factors, like laws and regulations, reduce fraud through crime and punishment.
We should think of market fit in what kind of way instead of "post-product"
pre-product
Society's for fraud
reflected in the level of shame and public scorn societies direct towards those who deceive stakeholders also plays a pivotal role in reducing or enhancing fraud opportunities.
