MGMT 160 Final

(VPD) The book discusses "Ground Rules for Interviewing." Name four of the rules discussed in the book for interviewing

1. Adopt a beginner's mind 2. Listen more than you talk 3. Get facts, not opinions 4. Ask "why" to get real motivations

(Overview of Financial Accounting) What are the three core financial statements? Briefly define the purpose of each statement (i.e. what is the gist of each statement). Indicate for each statement if it is for a point in time or a period of time.

1. Balance sheet (point in time): shows corps financial position by reporting assets versus liabilities and stockholders' equity 2. Income Statement (period): shows where revenue comes from and how it is acquired -> liabilities and equity. shows changes in retained earnings and other components of stockholder's equity 3. Statement of Cash flows (period): how money travels for different costs and revenues and from people to business entities or vice versa. shows change in cash beginning and ending at comparative balance sheet dates.

(Basic Accounting Concepts and Assumptions) The article discusses 12 basic accounting concepts and assumptions that anyone interested in financial statements need to understand. Excluding the "Dual Aspect", list FOUR of the other 11 and describe in a sentence or two.

1. Business Entity: financial statements are prepared for a business entity that is separate and distinct from its owners 2. Going Concern: unless evidence suggests otherwise, it is assumed that the entity will continue operations into the foreseeable future 3. Consistency: similar transactions are reported in a consistent fashion 4. Matching: accounting profit is the net result of matching related costs and revenues

The VPD book describes "five data traps to avoid". Name THREE data traps and describe each in a sentence or two

1. False-Positive Trap: seeing things that are not there (seeing customer has a pain when they don't) 2. False-Negative Trap: not seeing things that are there (fail to detect a customer job) 3. The Wrong Data Trap: searching the wrong place (abandoning opportunity bc looking at wrong data)

The Blue Ocean Strategy article discusses the "Four Actions Framework." Describe the four forces and discuss how you can use the framework to develop a business strategy.

1. First question forces a company to consider eliminating factors that companies in an industry have long competed on 2. Second question forces a company to determine whether products or services have been over-designed in the race to match and beat the competition 3. third question pushes a company to uncover and eliminate the compromises an industry forces customers to make 4. fourth question helps a company to discover entirely new sources of value for buyers and to create new demand and shift the strategic pricing of the industry By the first two questions, the company gains insight into how to drop its cost structure vis-a-vis competitors. The second two factors provide a company with insight into how to lift buyer value and create new demand.

The VPD text describes approximately 12 experiments types in the "Experiment Library". For example, the text describes "Ad Tracking" as one type of experiment. Name 4 others and describe in a sentence.

1. Illustrations, Storyboards, and Scenarios: share these related to your value proposition ideas with potential customers to learn what really matters to them. make value props tangible. 2. Life-Size Experiments: get customers to interact with life-size prototypes and real-world replicas of service experiences, to gain customer insight 3. Split Testing: technique to compare performance of two or more options 4. Mock Sales: set up a believable mock sale before value proposition even exists to test sincere customer interest

The Value Proposition Design text discusses that value propositions in business-to-business (B2B) transactions typically involve six stakeholders in the search, evaluation, purchase, and use of a product or service. Each one has a different profile and a different value proposition canvas. Stakeholders can tilt the purchasing decision in one direction or another. List FOUR of stakeholders given in the text and describe in a sentence describing each, OR list all six stakeholders without definitions to receive full credit.

1. Influencers 2. Recommendors 3. Economic Buyers 4. Decision makers 5. End Users 6. Saboteurs

(Overview of Financial Accounting) The cash flows statement is divided into which three general categories? Which of the three categories is typically most important to external users?

1. Operating 2. Investing 3. Financing Operating cash flows are most important because a firm's long-term viability is dependent upon its ability to generate sufficient positive net cash flow from its ongoing central operations.

(Protection of Intellectual Property in the US) According to the article, what are the four common forms of intellectual property (IP)? For each of the forms, list the approximate length of time of exclusivity and the common use (i.e. what does it cover). Note: for the purposes of this class, "Contractual Agreements" are NOT a form of intellectual property, so you cannot use it as part of your answer to this question.

1. Patents: used for protection of commercial and industrial products. prevents others from making, using, selling, offering for sale, or importing the same invention. It is 20 years from filing for utility and plant patents and 14 years for design patents. 2. Copyrights: protect creative works. protects works of authorship - literacy, graphic, audiovisual. These rights endure the life of the author(s) +70 years, or in cases of anonymous works of hire, a flat 95 years from publication, or if less, 120 years from creation 3. Trade Secrets: any ideas, know-how, compilations of info, or routines that are used in one's business, not generally known, and the source of competitive advantage --> indefinite until secrecy ends 4. Trademarks: any word, name, symbol, phrase, design or the like that is used to identify one's goods or services and to distinguish them from those of others. lasts 10 years but may be renewed indefinitely

(Intro to Strategy) The article discusses "Porter's Forces that Shape Industry Competition." As discussed in the article, what are the six forces? Sketch a simple diagram showing the six forces. In a sentence, define and describe each force.

1. Potential Entrants: threat of new entrants. can quickly erode profits by increasing competition, introducing alternative products, and capturing market share 2. Suppliers: bargaining power of suppliers. if offer a unique product, have made it difficult to switch to other suppliers or are more concentrated than the industry they serve, then they can raise the prices at which they supply the industry 3. Substitutes: threat of substitute products or services. when multiple products from different industries all serve the same purpose for customers. place a ceiling on an industry's ability to increase prices and grow 4. Buyers: bargaining power of buyers. powerful if they are concentrated or are free to direct their purchases elsewhere. industries that sell through powerful players see a profit margin squeeze (no other customers and retailers can switch vendors) 5. Complements: opportunity of complementary products/services. a firm has this when its goods are made more valuable by those of another firm. creates value for businesses involved even while competing 6. Industry Competitors: rivalry among existing firms. competition results from similar products, high fixed costs, overcapacity in the industry, and investments in assets that cannot be re-purposed. profit pool would then decrease. (arranged in circle pointing to "Industry Competitors" in the middle)

(VPD) List the three types of "fit" discussed in the text. Specifically, for each "fit", list the "name" (e.g. foo-bar fit), the "slang" term used for each (e.g. "on-the-exam fit"). Describe the key attributes of each fit in a sentence or two.

1. Problem-Solution Fit (On Paper): have evidence that customers care about certain jobs, pains, and gains. designed a value prop that addresses those jobs, pains, and gains 2. Product-Market Fit (In the Market): evidence that your products and services, pain relievers, and gain creators are actually creating customer value and getting traction in the market 3. Business Model Fit ( In the Bank): evidence that your value proposition can be embedded in a profitable and scalable business model

The VPC text describes six techniques to gain customer insights. These techniques help you understand the customer's perspective when designing value proposition's. Name four of the techniques and in a sentence and describe each.

1. The Data Detective: build on existing work with research 2. The Journalist: talk to potential customers 3. The Anthropologist: observe potential customers in the real world to get insight on how they really behave 4. The Scientist: get customers to participate in an experiment to learn from outcome

(Financing Entrepreneurial Ventures) 3 Types of Crowdfunding regulated by the JOBS Act of 2012

1. Token crowdfunding: entrepreneurs promise a non-equity token in exchange for funding (tokens can be product samples, early access, product launches, recognition) 2. Crowdfund investing: non-accredited investors can invest in a startup or small business in exchange for equity when they use an SEC-registered crowdfunding platform. regulatory thresholds on the max number off investors in a private company do not apply to these investors. firms act as intermediaries between entrepreneurs and investors. 3. Regulation D crowdfunding: accredited investors can use the Internet and its platforms to invest equity or debt capital in private companies. these investors count toward 2,000 investor registration threshold

(Business Model Generation) The text discusses that a business model can involve two different types of revenue streams. What are the two types?

1. Transaction revenues resulting from one-time customer payments 2. Recurring revenues resulting from ongoing payments to either deliver a Value Proposition to customers or provide post-purchase customer support

(Financing Entrepreneurial Ventures) The article discusses three core financial implications of the business model. What are the three core financial implications, and explain each in a sentence or two.

1. Underlying profitability: depends on the value of output relative to the value of input of a business. Depends on competition and demand. businesses that have high fixed costs relative to their variable costs often become increasingly profitable as they grow 2. Asset intensity: the amount of assets that must be tied up in the business ( net working capital + net fixed assets) in order to generate sales 3. Pace of growth: speed at which a venture needs to grow.

The Intro to Strat article discusses that "strategy is a firm's answer to two fundamental questions". What are the two questions?

1. Where should we compete? 2. How should we compete?

(Business Model Generation) The text discusses "pricing mechanisms" when discussing revenue streams. What are the two types of pricing mechanisms discussed in the text? Describe each in a sentence or two and cite an example for each

1. fixed pricing: predefined prices are based on static variables ex. can be volume dependent so price as a function of the quantity purchased 2. dynamic pricing: prices change based on market conditions ex. can be based on the real-time-market where price is established dynamically based on supply and demand

(Perspective on Entrepreneurship) Professor Stevenson discusses two historical definitions of entrepreneurship which he argues are both flawed. What were the two "Schools of Thought" on the way to define entrepreneurship according to Stevenson? According to Stevenson, what is the major flaw to each of the two?

1. functional approach (economic function of entrepreneurship) 2. individual traits (personal characteristics of entrepreneurs) can't delimit the entrepreneur by defining those economic functions that are "entrepreneurial" and those that are not. Not helpful to describe traits that engender entrepreneurship in certain individuals because everyone is different.

(VPD) When describing "Customer Jobs", the text distinguishes between three main types of customer jobs to be done and supporting jobs. List the three types of customer jobs to be done and briefly describe in a sentence

1. functional jobs: when customers try to perform or complete a specific task or solve a specific problem 2. social jobs: when customers want to look good or gain power or status. describe how customers want to be perceived by others. 3. personal/emotional jobs: when customers seek a specific emotional state, such as feeling good or secure

(Overview of Financial Accounting) discusses two uses for the term "liquidity" one can mean when discussing a balance sheet. What are they?

1. how easily it turns to cash 2. firm's short-term debt paying ability

(Business Model Gen) The "Business Model Canvas" consists of nine basic building blocks. Sketch the canvas and label each of the nine blocks. For each labeled block, describe it in a sentence or two.

1. key partners: network of suppliers and partners that make the business model work 2. key activities: most important things a company must do to make its business model work 3. key resources: most important assets required to make a business model work 4. value proposition: bundle of products and services that create value for a specific customer segment 5. customer relationships: types of relationships a company establishes with specific customer segments 6. channels: how a company communicates with and reaches its customer segments to deliver value prop 7. customer segments: different groups of people or organizations an enterprise aims to reach and serve 8. cost structure: all costs incurred to operate a business model 9. revenue streams: cash a company generates from each customer segment (cost subtracted from revenues to create earnings)

(VPD) When describing "Customer Pains", the text distinguishes between three types of customer pains. List the three types of customer gains OR list two types and briefly describe each in a sentence or two

1. undesired outcomes, problems, and characteristics 2. obstacles 3. risks (undesired potential outcomes)

(Legal Forms of Org) The article discusses three key criteria which can be used help choose a legal form of organization. Name two of the three

1. who will the investors and owners be? 2. what is the time frame for the life of the business?

(Business Model Generation) According to Osterwalder & Pigneur, what is the definition of a "business model"?

A business model describes the rationale of how an organization creates, delivers, and captures value

(Basic Accounting Concepts and Assumptions) The "Dual Aspect" explains that every transaction affects at least two items in the basic accounting equation and preserves the equation's equality. What is the fundamental accounting equation?

Assets = Liabilities + Stockholders' equity

(Perspective on Entrepreneurship) In the article, Prof. Stevenson defines "Entrepreneurship as a ____________________ Phenomenon".

Behavioral

(Overview of Financial Accounting) Why is financial accounting different than managerial accounting?

Financial accounting is intended to provide info to external users in meeting their decision making needs, who unlike managers are not involved in day-to-day decision making within the firm. (current and potential creditors and investors) managerial accounting is intended to help internal users in making decisions. no rules or guidelines regarding info provided for this accounting purposes. it involves examination of common conventions and practices instead. (ex: cost-volume profit analysis, budgeting and variance analysis, differential analysis etc)

In the figure above, according to the VPD book, why is the "step" 4, i.e. necessary? That is, to some, it initially may seem redundant to step #2 above, but it isn't. Explain.

It's different because step 4 it is more specific and it is prioritizing within the top hypothesis. When you prioritize your test cards you rank the most critical hypotheses highest, but prioritize cheap and quick tests to be done early in the process when uncertainty is maximum. increase spending on experiments that produce more reliable evidence and insights with growing certainty

(Legal Forms of Org) What is an "S (or Subchapter S) Corporation" and how does it differ from a "C (or ordinary)" Corporation?

S Corporation: creature of the law which is afforded the tax status of a partnership, but the protection from legal liability of a corporation. it must meet a number of restrictive conditions: 1. have only one class of stock, although differences in voting rights are allowed. 2. be a domestic corp, owned wholly by US citizens, and derive no more than 80% of its revenues from non-US sources 3. have 75 or fewer stockholders 4. derive no more than 25% of revenues from passive sources (interest, dividends, rents, and royalties) 5. have only individuals, estates and certain trusts as shareholders (no corps or partnerships) The election of S corporation tax status requires unanimous, timely consent of all shareholders and status may be terminated by unanimous election or if one of above limitations is broken. The difference is is that it doesn't get taxed as much. a C corporation is taxed twice once at the corporate level and then at the individual level

(Intro to Strat) Define "strategy" as given in the article.

The integrated set of choices that positions the business in its industry so as to generate superior financial returns over the long run

(Financing Entrepreneurial Ventures) As discussed in the article, what are some of the primary differences between "debt" and "equity" fundraising? How are the motivations of debt and equity financiers different? Give an example of a debt investor and an example of an equity investor as discussed in the reading

The primary difference is that debt fundraising results in the company paying a set amount of money at a set date based on interest whereas "equity" fundraising usually results in giving up ownership in the company - equity investors receive a long term ownership stake in a venture in exchange for capital. Debt investors tend to avoid a lot of risk whereas equity investors take on risk. an example of a debt investor is a traditional bank. An example of an equity investor is a VC firm.

The (Intro to Strat) article discusses a "Three-Dimensional Business Landscape." What point is the author trying to make using it, i.e. what does the Three Dimensional Business Landscape represent and why are they talking about it?

There are many ways a business can choose where to compete and how to do so. A three-dimensional business landscape shows how a business's choices can lead to a higher or lower profitability, represented by points on the landscape. the landscape suggests that there are areas (market segments) of higher potential profit where the wedge has been widened (competitive advantage is higher). Strategic positioning is finding and occupying these points on the landscape.

According to the VPD text, Steve Blank coined the term "Earlyvangelist". What is an "Earlyvangelist"? The book lists five traits of an Earlyvangelist. List three of the five traits.

a customer who is willing and able to take a risk on a new product or service 1. Has a problem or need 2. Is aware of having a problem 3. Is actively looking for a solution

(Financing Entrepreneurial Ventures) What is "convertible preferred stock"? In other words how does convertible preferred stock differ from common stock?

a form of stock that can be redeemed at the face value of the investment (plus any accumulated dividends) or converted into common stock to get a pre-negotiated share of the company. most common class of equity that VC investors take in a company

(Legal Forms of Org) What is a sole proprietorship?

a person who undertakes a business without any of the formalities associated with other forms of organization; the individual and the business are one and the same for tax and legal liability purposes

(Financing Entrepreneurial Ventures) What are strategic investors? Give some characteristics and discuss their motivations, etc

bigger companies or corporations that make direct investments in external ventures or buy smaller companies as a form of research and development or to eliminate competition (gaining exposure to a new technology or product area important to the firm's core operations)

(Blue Ocean Strategy) Define the terms "red oceans" and "blue oceans" according to Kim & Mauborgne.

blue ocean: untapped market space, demand creation, and the opportunity for highly profitable growth. describes wider potential of market space that is vast, deep, and not yet explored. all industries not in existence today aka unknown market space. red ocean: industry boundaries are defined and accepted, and the competitive rules are known. products become commodities and cutthroat competition turns the red ocean "bloody". all industries in existence today aka known market space.

(Legal Forms of Org) What is a partnership?

business entity that consists of two or more owners. it is a voluntary association of two or more persons to carry on as co-owners of a business for profit.

(Perspective on Entrepreneurship) In addition to "Strategic Orientation", there were five additional critical dimensions of business practice as defined by Stevenson. List the five additional dimensions. Hint: These were also discussed in lecture in the form of a question so you can alternatively list the question form as an answer here.

commitment to opportunity, commitment of resources, control of resources, management structure, reward philosophy.

The (Intro to Strat) article discusses the purpose of strategy is to create a "competitive advantage". What is competitive advantage?

competitive advantage generates superior sustainable financial returns by understanding the business landscape and choosing the position on this landscape. Firms aim to maximize the wedge between their supplier opportunity cost and their customers' willingness to pay. Firms that command and sustain a larger wedge than their peers have a competitive advantage.

(Financing Entrepreneurial Ventures) The article provides simple equations for "Current Investors' Ownership" and "Previous Investors' Ownership". Please list the two equations

current investors' ownership = investment amount/ post-money valuation previous investors' ownership = pre-money amount/post money valuation

(Perspective on Entrepreneurship) In the article, Prof. Stevenson discusses each critical dimension varying from the "____________________ domain" to the "_________________ domain" along the continuum. Hint: these were shown as overlapping two-headed arrows in the case for each critical dimension

entrepreneurial, administrative

The VPC text describes the "Testing Process". The following figure was discussed in class. For example, the exclamation point (!) stands for "Make progress". Label each of the remaining six images below (6 points) to indicate the steps in the testing process

extract hypothesis -> prioritize hypothesis -> design tests -> prioritize tests -> run tests -> capture learnings

(VPD) Sketch and label the "Value Proposition Canvas" (hint: the "circle" and the "square"). After labeling each, please provide a few sentences describing each of the label quadrants / "pie" sections.

left (square): starting left going clockwise -> products and services, gain creators, pain relievers products and services: list of things value proposition is build around gain creators: how products and services create customer gains pain relievers: how products and services alleviate customer pains right (circle): gains, customer jobs, pains gains: describe outcomes customers want to achieve or the concrete benefits they are seeking customer jobs: describe what customers are trying to get done in their work and in their lives, as expressed in their own words pains: describe bad outcomes, risks, and obstacles related to customer jobs

(Legal Forms of Org) What does "LLC" stand for?

limited liability company

(Financing Entrepreneurial Ventures) How are pre-money and post-money valuations linked? (equation)

pre-money valuation + investment amount = post-money valuation

(Perspective on Entrepreneurship) In the article, Prof. Stevenson discussed strategic orientation as a continuum from "_______________________" (nickname) to "_________________" (nickname) as the level of controlled resources increased. Hint: we are not looking for a definition here in the blanks, but rather the nickname that Prof. Stevenson assigned to each.

promoter, trustee

As defined in the VPD text, what is a "Call to Action"? How is a "call to action" used (i.e. why is it discussed in the text)?

prompts a subject to perform an action; used in an experiment in order to test one or more hypotheses. CTA is used as evidence of what works and what doesn't for the customers (to see if they are really interested in what you have to offer)

(Protection of Intellectual Property in the US) What is "intellectual property"?

property of the mind. what defines the company's brand name and professional reputation, its patents, copyrights, and client lists.

(Financing Entrepreneurial Ventures) What does the term "bootstrapping" mean when referring to a startup

refers to entrepreneurs financing their own endeavors using their own personal funds (personal savings, small loans, credit cards, and company's retained earnings)

(Blue Ocean Strategy) What is a "strategy canvas"? How is a "strategy canvas" to be used? What does the horizontal axis (i.e. "x-axis") represent on the strategy canvas? What does the vertical axis (i.e. "y-axis") represent on the strategy canvas? What is the "line" connecting the dots on the strategy canvas called and what does it stand for?

strategy canvas: diagnostic and an action framework for building a compelling blue ocean strategy. captures the current state of play in the known market space. how to be used: used to understand where the competition is currently investing, the factors the industry currently competes on in products, services, and delivery, and what customers receive from existing competitive offerings on the market. horizontal axis: range of factors the industry competes on and invests in vertical axis: the offering level that buyers receive across all of the key competing factors "line": called the value curve and is a graphical depiction of a company's relative performance across industry's factors of competition

(Perspective on Entrepreneurship) Define "Entrepreneurship" according to Stevenson

the pursuit of opportunity without regard to resources currently controlled

(Financing Entrepreneurial Ventures) Who are angel investors?

they are individuals or a group of individuals, who are wealthy and invest in start up ventures with their personal money. They tend to be local business rulers and/or former entrepreneurs. They invest in these startups both for economic return and for the thrill of being in a start up again.

(Financing Entrepreneurial Ventures) What is an "up round" and a "down round"

up round: when a company raises its valuation in between financing events down round: value decreases