Entrepreneurship Exam 1
Increasing cognitive ability helps in
Adapting to new situations, being creative, communicating one's reasoning behind a particular response.
The surprising habits of original thinkers Adam Grant Ted talk:
In his TED Talk "The Surprising Habits of Original Thinkers," organizational psychologist Adam Grant shares insights into the habits and characteristics of people who are original thinkers, and how these habits can be nurtured in oneself and others. Grant argues that original thinkers are not necessarily born that way, but rather cultivate habits and approaches that allow them to think and act differently. These habits include: 1. Challenging the status quo: Original thinkers are willing to question established norms and challenge assumptions in order to find new and better ways of doing things. 2. Generating lots of ideas: Rather than waiting for a single, perfect idea to emerge, original thinkers generate many ideas and are not afraid to explore unconventional or seemingly irrelevant options. 3. Embracing ambiguity: Original thinkers are comfortable with uncertainty and complexity, and are willing to tolerate ambiguity in order to explore new and unconventional ideas. 4. Taking risks: Original thinkers are willing to take risks and embrace failure as an opportunity for growth and learning. 5. Building diverse networks: Original thinkers seek out diverse perspectives and actively engage with people who have different backgrounds, experiences, and viewpoints in order to challenge their own thinking and broaden their horizons. Grant also discusses how leaders and organizations can create cultures that foster original thinking by encouraging and rewarding creativity, providing opportunities for experimentation and learning, and supporting diverse perspectives and backgrounds. Overall, Grant's talk highlights the importance of cultivating habits and approaches that foster original thinking in order to drive innovation and creativity in our personal and professional lives.
Lean Start Up
1. Build Measure Learn Feedback loop 2. Everything is a grand experiment 3. Different types of mvps 4. 3 engines of growth: Sticky engine, viral engine, paid engine a. Sticky - Customer acquisition rate, churn rate b. Viral - Viral coefficient c. Paid - Cost per acquisition (cpa) and Lifetime value (ltv) 5. Pivot or persevere
Googles 9 principles of innovation via Kamal Haasan, Larry Page, Shannon Deegan and Sundar Pichai: The 9 principles of innovation mentioned in the video "Google's 9 Principles of Innovation" are:
1. Focus on the user: Google emphasizes that they put the user first and try to understand their needs. 2. Think big: Google encourages its employees to think beyond the ordinary and come up with big ideas. 3. Think 10x: Rather than improving something incrementally, Google believes in coming up with ideas that are 10 times better. 4. Bet on technical insights: Google believes in betting on technical insights and investing in research and development. 5. Ship and iterate: Google encourages its employees to release products and services quickly and iterate on them based on user feedback. 6. 20% time: Google allows its employees to spend 20% of their time on projects they are passionate about. 7. Create a culture of innovation: Google strives to create a culture that encourages innovation and experimentation. 8. Default to open: Google believes in being open and transparent, sharing knowledge and collaborating with others. 9. Fail well: Google recognizes that failure is an inevitable part of the innovation process and encourages employees to learn from their mistakes.
In the video "Validate your business idea: THE LEAN STARTUP by Eric Ries", Ries outlines five steps for validating a business idea:
1. Formulate a hypothesis: Start by formulating a hypothesis about the problem you are trying to solve and the solution you are proposing. 2. Build a minimal viable product (MVP): Create a basic version of the product or service that can be tested with real customers. 3. Test the MVP: Get the MVP in front of potential customers and collect feedback on how they use it and what they like or dislike about it. 4. Analyze the feedback: Use customer feedback to refine the MVP and the business idea. This involves measuring customer behavior, listening to feedback, and using that feedback to make informed decisions. 5. Decide whether to pivot or persevere: Based on the feedback you receive, decide whether to pivot and make significant changes to the product or business model, or to persevere and continue iterating and improving the MVP. Overall, these steps are part of the Lean Startup approach, which emphasizes the importance of testing business ideas with customers early and often, and using data and customer feedback to make informed decisions about the direction of the business. By following these steps, entrepreneurs can reduce risk and increase their chances of success.
LEAN START UP Pt 2
1. User experience vision 2. Identify critical assumptions 3. Build an early version to validate a critical assumption (concierge mvp and smoke screen mvp) Concierge - Manual method to test an automated process, Smoke screen - Marketing without a finished product. 4. Release and measure 5. Pivot or persevere
• Explain the importance of entrepreneurship
31 million small businesses in the United States (Less than 500 employees) Small businesses make up over 99% of employers Small businesses employ about 47% of all private sector workers Small businesses create 65% of net new jobs in our economy Small businesses are responsible for 50% of non-farm private GDP Small patenting firms produce 16 times more patents per employee than large patenting firms
Explain bricolage as a source of entrepreneurs' resourcefulness
Bricolage - Applying combinations of the resources at hand to new problems and opportunities. Taking existing resources and tinkering and/or reframing them so they can be used in new ways.
Achieving cognitive adaptability
Comprehension questions - Increase entrepreneurs' understanding of the nature of the environment Connection tasks - Stimulate thinking about similarities and differences of current situations with situations previously faced and solved. Strategic tasks - Identify strategies that are appropriate for solving the problem or pursuing the opportunity. Reflection tasks - Stimulate entrepreneurs to think about their understanding and feelings as they progress through the entrepreneurial process.
• Explain cognitive adaptability
Describes the extent to which entrepreneurs are dynamic, flexible, self-regulating, and engaged in the process of generating multiple decision frameworks. It is focused on sensing and processing changes in their environments and then acting on them. Metacognitive awareness - Ability to reflect upon, understand, and control one's thinking and learning.
• Understand and articulate common characteristics and backgrounds of entreprenuers (including support systems)
Education - Facilitates integration and accumulation of knowledge thus providing a larger opportunity set, Casts a wider net for the discovery or generation of potential opportunities, Assists entrepreneurs in adapting to new situations, Does not necessarily determine whether the individual will create a new business. Age - Chronological age is usually between the ages 22 and 45. Work history - Past work experience of an individual. Role Models - Individuals whose example an entrepreneur can aspire to and copy Support systems Moral-Support Network - Individuals who give psychological support to an entrepreneur Professional-Support Network - Individuals who help the entrepreneur om business activities
• Understand the concept of effectuation
Effectuation: Causal Process - Starts with a desired outcome, focuses on the means to generate that outcome Effectuation process - Starts with what one has, selects among possible outcomes
• Understand the concept of entrepreneurship and explain the process of entrepreneurial action
Entrepreneurship is the situations in which new goods, services, raw materials, and organizing methods: Can be introduced, sold at greater than their cost of production. Entrepreneurial action is the process that involves creation of new products or processes, involves entry into new markets. And may occur through a newly created org or within an established organization.
The single biggest reason why start-ups succeed Bill Gross Ted Talk:
In his TED Talk "The single biggest reason why startups succeed," entrepreneur and investor Bill Gross shares his research on the factors that contribute to the success or failure of startups. Gross and his team analyzed data from over 200 companies and identified five key factors that can influence a startup's success: the idea, the team, the business model, the funding, and the timing. However, after analyzing the data, Gross found that one factor stood out above the rest as the single biggest predictor of success: timing. According to Gross, timing can make or break a startup. A great idea, a talented team, and ample funding may not be enough if the timing is wrong. On the other hand, even an average idea with a mediocre team and limited funding can succeed if the timing is right. Gross explains that timing encompasses a variety of factors, including economic conditions, market trends, and changes in technology. Startups that are able to identify and capitalize on emerging trends and opportunities have a better chance of success than those that are too early or too late to the market. Gross also shares examples of successful startups that were able to capitalize on timing, such as Airbnb and Uber, which were able to disrupt established industries by taking advantage of new technologies and changing consumer behaviors. Overall, Gross's talk emphasizes the importance of timing in the success of startups, and encourages entrepreneurs to stay attuned to the changing landscape of their industry and the broader market in order to identify and capitalize on emerging opportunities.
The art of innovation Tedx
In his TEDxBerkeley talk, "The art of innovation," Guy Kawasaki shares his insights on how to innovate and create successful products. Kawasaki emphasizes the importance of creating something that is not just better but also different from what already exists. He argues that successful innovations come from a deep understanding of the needs and wants of customers, rather than from market research or customer feedback. Kawasaki believes that the most successful innovations come from those who have a beginner's mindset, meaning they approach problems without preconceived notions or assumptions. He also emphasizes the importance of prototyping and testing ideas as quickly as possible, rather than waiting for the "perfect" solution. Finally, Kawasaki emphasizes the importance of focusing on the big picture and not getting bogged down in the details. He argues that successful innovators need to be able to take risks and embrace failure, recognizing that failure is simply a necessary part of the innovation process. Ultimately, Kawasaki encourages his audience to embrace creativity, take risks, and create products that have the potential to change the world.
Lean start up pt 2
In the video "Validate your business idea: THE LEAN STARTUP by Eric Ries", Ries discusses the importance of validating your business idea before investing significant time and resources into it. Here are the major points of the video: Start with a hypothesis: The Lean Startup approach begins with a hypothesis about the problem you are trying to solve and the solution you are proposing. Test the hypothesis: The next step is to test the hypothesis by creating a minimal viable product (MVP) and getting it in front of potential customers. Collect feedback: Use customer feedback to refine the MVP and the business idea. This involves measuring customer behavior, listening to feedback, and using that feedback to make informed decisions. Pivot or persevere: Based on the feedback you receive, decide whether to pivot and make significant changes to the product or business model, or to persevere and continue iterating and improving the MVP. Continuously test and iterate: The Lean Startup approach emphasizes the importance of continuously testing and iterating on the business idea, even after the MVP has been launched. Focus on validated learning: The goal of the Lean Startup approach is to achieve validated learning, which means using data and customer feedback to make informed decisions about the direction of the business. Overall, the video emphasizes the importance of validating your business idea before investing significant time and resources into it. By starting with a hypothesis, testing the idea with customers, and continuously iterating and improving, entrepreneurs can reduce risk and increase their chances of success.
Navi Radjou Creative problem-solving in the face of extreme limits:
In this TED Talk, Navi Radjou discusses how creative problem-solving can be achieved in situations where resources are scarce or limited. He highlights the importance of "frugal innovation," which involves finding ways to do more with less. Radjou describes three key principles of frugal innovation: simplicity, resourcefulness, and social innovation. He provides examples of how these principles have been applied in various contexts, such as in healthcare, agriculture, and transportation. Radjou also emphasizes the need for a shift in mindset towards a more collaborative and adaptive approach to problem-solving. He suggests that by embracing diversity, experimenting, and learning from failure, we can become more effective problem-solvers and create more sustainable solutions. Overall, Radjou's talk encourages a more innovative and responsible approach to problem-solving that is mindful of the limitations and challenges that we face in our world today.
To discuss the aspects of the product planning and development process
See study guide
• Explain the model of opportunity recognition
See study guide
• Identify key components of lean start-up* • Understand the basics of Business Model Canvas* • Understand the key do's and don'ts of customer inquiry*
See study guide`
• Define sustainable entrepreneurship and its benefits
Sustainable entrepreneurship is about preserving nature, life support, and community in the pursuit of perceived opportunities to bring future products, processes, and services into existence for gain. It can generate economic gains, environmental gains, social gains.
Lean Start-up pt 1:
The YouTube video "The Lean Startup Summary" by Eric Ries offers an overview of the key concepts and steps involved in implementing the Lean Startup methodology. Here are the major steps and takeaways from the video: 1. Define the Problem: The Lean Startup methodology begins with identifying a problem or pain point that a particular group of people are experiencing. This helps to focus the business idea on solving a real problem rather than creating a solution in search of a problem. 2. Create a Minimal Viable Product (MVP): Once the problem has been defined, the next step is to create a minimal viable product (MVP) that addresses the problem in a simple, low-cost way. The MVP should be the smallest possible version of the product that can be tested with real customers. 3. Measure and Learn: The Lean Startup emphasizes the importance of measuring and learning from customer feedback. This involves collecting data on how customers interact with the MVP and using that data to make informed decisions about the direction of the business. 4. Pivot or Persevere: Based on the feedback from customers, the Lean Startup approach encourages entrepreneurs to pivot or persevere with their business idea. If the feedback is positive, the entrepreneur can continue to iterate and improve the MVP. If the feedback is negative, the entrepreneur may need to pivot and make significant changes to the product or business model. 5. Validated Learning: The goal of the Lean Startup is to achieve validated learning, which means using data and customer feedback to make informed decisions about the direction of the business. By testing assumptions and hypotheses with real customers, entrepreneurs can avoid wasting time and money on ideas that don't have a market. 6. Innovation Accounting: The Lean Startup methodology also emphasizes the importance of innovation accounting, which means tracking progress through actionable metrics, such as customer engagement or revenue growth, rather than vanity metrics, such as website hits or social media likes. Overall, the Lean Startup methodology is a process of experimentation and iteration that emphasizes the importance of customer feedback and validated learning. By starting with a problem, creating a simple MVP, and using data to make informed decisions, entrepreneurs can reduce risk and increase their chances of success.
• To describe how structural similarities, enable entrepreneurs to make creative mental leaps
There are 2 similarities in structural thinking: Superficial and Structural similarities Superficial similarities - Basic elements of the technology resemble the basic elements of the market. Structural similarities - Underlying mechanisms of the technology resemble the underlying mechanisms of the market.
• Explain the entrepreneurial strategy model
o Set of decisions, actions, and reactions that generate, and exploit, a new entry over time.
• To discuss the importance of innovation and its three major classifications
o Breakthrough - Extremely unique innovations that establish the platform on which future innovations can be developed, Should be protected by patents, trademarks, and copyrights. o Technological - Advancements in the product/market area, Needs to be protected. o Ordinary - Extend technological innovation into a better product or service or one that has a different market appeal, Result of market analysis and pull and not technological push.
• To identify various sources of ideas for new ventures
o Consumers - Entrepreneurs should: Formally or informally monitor potential ideas, Ensure that the idea represents a large enough market to support a new venture. o Existing products and services - Formally monitor and evaluate competitive products and services on the market. o Distribution channels - Help suggest and market new products. o Federal government - Taking cue from pending patents, Ideas evolve in response to government regulations. o Research and Development - Formal endeavor connected with one's current employment.
• To be able to assess the attractiveness of a new entry opportunity using figure 3.2
o Depends on: The level of information and the willingness to make a decision without perfect information.
• Define methods for generating new venture ideas
o Focus groups, Brainstorming, Brain writing, Problem inventory analysis (Obtaining new ideas and solutions by focusing on problems)
• Understand and define the key concepts of lead time
o Lead time - Grace period in which the first mover operates in the industry under conditions of limited competition. § Extend lead time by: Building customer loyalties, Building switching costs, Protecting product uniqueness, Securing access to important sources of supply and distribution. § Switching costs - Must be borne by customers if they: Stop purchasing from the current supplier, Begin purchasing from new supplier.
• Identify what constitutes a new entry
o New product in an established or new market o Established product in a new market o A new organization
• To understand how resources are involved in the generation of opportunities
o Resources: § Inputs into the production process § Source of competitive advantage § Basic building blocks to a firm's functioning § Can be combined in different ways § Provide capacity to achieve superior performance when they are: Valuable, Rare, and Inimitable. · By using Market knowledge and Technological knowledge o Market knowledge - Information, technology, know-how, and skills that provide insight into a market and its customers. o Technological knowledge - Provides insight into ways to create new knowledge o Both are drawn from the unique experiences and knowledge
To use and understand creative problem-solving techniques
o Reverse Brainstorming - Group method for obtaining new ideas by focusing on the negative aspects o Gordon method - Developing new ideas when the individuals are unaware of the problem, Ensures that solutions are not clouded by preconceived ideas and behavioural patterns. o Checklist method - Developing a new idea through a list of related issues. o Free association - Developing a new idea through a chain of word associations. o Forced relationships - Developing a new idea by looking at product combinations, Focused on generating ideas from relationship patterns between elements of a problem. o Collective notebook method - Developing a new idea by group members regularly recording ideas. o Attribute listing - Developing a new idea by looking at the positives and negatives. o Big-dream approach - Developing a new idea by thinking without constraints.
• Identify and explain risk reduction strategies for new entries
o Risk - Probability, and magnitude of downside loss. Derived from uncertainties over: Market demand, Technological development, and Actions of competitors.
• Explain major issues in website design
o Using E - Commerce creatively § An entrepreneur must decide whether the he or she will run the internet operations. § Integrate front-end and back-end activities. § Integrate customer orders, with distribution channels and manufacturing capabilities. § Allows flexibility for specific customer orders. o Websites - Important features include § Ease of use § Search capability § E-mail response system § Speed § Compatibility with different browsers and platforms o E-Commerce and Business Start-Up § Doing E-Commerce as an entrepreneurial company · Essential criteria o Economic and convenient delivery of products o Products should cater to a wide market o Feasibility of shipping outside own geographical location o Significant cost reductions o Ability to economically draw customers to its website
• Understand and define the key concepts of window of opportunity
o Window of opportunity - A time frame to grasp an opportunity before it is lost, the window of time depends on the rarity of the idea. Can't take too long searching for it, but sometimes is not even open yet.
• Explain first-mover disadvantages
§ Demand uncertainty - Difficulty in estimating potential size, growth, and the key dimensions along which a market will grow. § Technological uncertainty - Will the technology perform as expected, Will other alternate technologies emerge and leapfrog over current technologies. § Adaptation - Persistence and determination can inhibit the ability to adapt. § Customer Uncertainty - Difficulty in accurately assessing whether the new product or service provides value. · Overcome customer uncertainty by: Informational advertising, Highlighting product benefits over substitutes, Creating a frame of reference for potential customers, Educating customers through demonstration and documentation.
• Explain first-mover advantages
§ Develop a cost advantage, Face less competitive rivalry, Can secure important channels, Better positioned to satisfy customers, and Gain experience through participation.
Imitation strategies
§ Imitation strategies - Copying practices of others. Advantages: Help develop skills necessary to be successful in the industry, Provide organizational legitimacy, Reduce costs associated with R&D, Reduce customer uncertainty over the firm, Make the new entry look legitimate from day one. · Franchising o Acquiring a "proven formula" for new entry from a franchisor · "Me too" Strategy o Copying existing products and attempting to build an advantage through minor variations.
o Risk reduction strategies for new entry exploitation
§ Liabilities of newness · Negative implications arising from an organization's newness · Arise from o Costs in learning new tasks o Conflict arising from overlap or gaps in responsibilities o Informal structures of communication § Assets of newness · Positive implications arising from an organization's newness · Learning advantage
o Strategies to reduce uncertainties: Market-scope strategies and Imitation strategies
§ Market-scope strategies - Choice about which customer groups to serve and how to serve them. Either Narrow-scope or Broad scope strategy. · Narrow scope strategy o Offers small product range to a small number of customers to satisfy a particular need. o Focuses on: Producing customized products, Localized business operations, High level craftsmanship, High-end of the market. · Broad scope strategy o Offers range of products across different market segments. o Helps gain better understanding of the whole market o Opens the firm up to many different "fronts" of competition o Reduces risks associated with market uncertainties o Increases exposure to competition
Define the dual process model for maximizing learning from failure experiences
• Combination between a loss orientation and restoration orientation. • Loss Orientation - An approach to negative emotions that involves: Working through and processing some aspect of the loss experience. Breaking emotional bonds to the object loss. • Restoration Orientation - An approach to negative emotions based on both avoidance and proactiveness toward secondary sources of stress arising from a major loss.
Understand the causes for interest in corporate entrepreneurship
• Corporate entrepreneurship is entrepreneurial action within an established organization. It capitalizes on individuals who can do things differently and better. • Causes for interest are: Desire for responsibility, Strong need for individual expression and freedom, Discontent within the structured organization, Hyper-competition/globalization.
• Identify and differentiate between the key ways a firm can act entrepreneurially
• New Business Venturing - Companies creating new businesses or business opportunities • Innovativeness - Process/Product/Service innovation • Self-renewal - Redefining parts or the purpose of the company • Proactiveness - Get ahead of the trends before they start, rather than being reactive and doing what everyone else is doing.
• Identify the characteristics of an entrepreneurial environment
• Organization operates on frontiers of technology • New ideas encouraged • Trial and error encouraged • Failures allowed • No opportunity parameters • Resources available and accessible • Multidiscipline teamwork approach • Long time horizon • Volunteer program • Appropriate reward system • Sponsors and champions available • Support of top management
• Explain how established firms can develop an entrepreneurial culture and the challenges involved
• Step 1: Secure a commitment from top, upper, and middle management levels. Identify, select, and train corporate entrepreneurs. • Step 2: Identify ideas and areas that interest top management. Identify amount of risk money available. Establish overall program expectations and target results. Establish time frame, volume, and profitability requirement. Establish mentor/sponsor system. • Step 3: Use of technology to ensure organizational flexibility. • Step 4: Identify interested managers to train employees. • Step 5: Develop ways to get closer to the customers. • Step 6: Learn to be more productive with fewer resources. • Step 7: Establish a strong support structure for corporate entrepreneurship. • Step 8: Tie rewards to the performance of the entrepreneurial unit. • Step 9: Evaluation system should be such that successful entrepreneurial units thrive, and unsuccessful ones are eliminated. An example of this is Google X.