MHR322Exam1studyset
The age when most founders start a business is approximately ? - 40 - 60 - 20 - 50
40
In the Five Forces, a substitute refers to: - A different product or service that meets the customer need in the same way - An alternative supplier for a given product or service - A different competitive strategy - An opportunity for a company to replace a rival with an improved product or service
A different product or service that meets the customer need in the same way
For entrepreneurs, an industry is: - A group of current or potential companies that can produce a product or service - A group of current or potential customers that want to buy a product or service - A set of experts who can predict changes in technology - A set of online platforms where consumers can access a wide variety of products and services
A group of current or potential companies that can produce a product or service
For entrepreneurs, a market is: - A group of current or potential customers that want to buy a product or service - A group of current or potential companies that can produce a product or service - A financial platform where stocks are traded - An online platform where consumers buy retail goods
A group of current or potential customers that want to buy a product or service
The Austrian economist Schumpeter defines entrepreneurship as: - A process of creative destruction. - Rolling the dice with the opportunity to get rich or lose it all. - Having the vision to see the future before your competitors. - Starting a new business entity.
A process of creative destruction.
The Austrian economist Schumpeter defines entrepreneurship as: - Rolling the dice with the opportunity to get rich or lose it all. - Starting a new business entity. - A process of creative destruction. - Having the vision to see the future before your competitors.
A process of creative destruction.
According to Strategyzer's Value Proposition video, what ratio of new innovations / products fail to succeed? - About 7 out of 10 - About 9 out of 10 - About 3 out of 10 - About 5 out of 10
About 7 out of 10
Product Market Fit is best described as : - Alignment between your value proposition and customer segment - Finding the largest market - Finding the forecast that best fits the market demand curve - Using an innovative product design approach
Alignment between your value proposition and customer segment
All of the following can potentially be protected with intellectual property EXCEPT - An idea - A product or product component - A scientific discovery - A process - Software
An idea
A common mistake in generating a quantified value proposition is: - Focusing only on the Persona's top priority when you should be trying to address at least 2-3 priorities. - Being too aggressive and overestimating the measurable value that a customer will get from your product. - Being too conservative and underestimating the measurable value that a customer will get from your product. - Focusing on getting a specific numerical result when really all you need is a high level description of the value your customer will get.
Being too aggressive and overestimating the measurable value that a customer will get from your product.
A common mistake in generating a quantified value proposition is: - Focusing only on the Persona's top priority when you should be trying to address at least 2-3 priorities. - Being too conservative and underestimating the measurable value that a customer will get from your product. - Being too aggressive and overestimating the measurable value that a customer will get from your product. - Focusing on getting a specific numerical result when really all you need is a high level description of the value your customer will get.
Being too aggressive and overestimating the measurable value that a customer will get from your product.
In "What Entrepreneurs Can Teach Us All About Life," author Stephen Hicks suggests that entrepreneurship is like life in general because: - Both involve birth, growth, and death - Both require challenging basic rules and assumptions - Both offer high levels of risk and rewards
Both require challenging basic rules and assumptions
Which of the Five Forces refers to customers' ability to drive prices down or easily switch between providers? - Buyer power - Supplier power - Competitive advantage - Rivalry
Buyer power
Factors that improve technology diffusion/new product acceptance include: - High risk of failure - Compatibility with current practices - Product or technology complexity - Significant advertising budget
Compatibility with current practices
To be patented, an innovation must be all of the following EXCEPT - New - Complex - Useful - Not obvious
Complex
The complex customer situation of a "two-sided market" involves: - Connecting a set of buyers with a set of sellers, such as people who need a ride and people who drive cars and have free time. - Selling a product to different "sides" of the same type of customer, such as doctors and nurses at a hospital. - Interacting with customer segments who represent high-potential buyers and low potential buyers. - Providing information to potential customers about both the advantages and disadvantages of your innovation.
Connecting a set of buyers with a set of sellers, such as people who need a ride and people who drive cars and have free time.
When identifying your target market segment the vast majority of your primary market research should come from: - Direct interaction with real potential customers about their situations, pain points, and opportunities. - Market research reports compiled by experts. - Online searches via Google and quantitative information engines such as Wolfram Alpha. - Interviews and focus groups with industry experts.
Direct interaction with real potential customers about their situations, pain points, and opportunities.
The point of identifying and interviewing 10 high-potential customers is to: - Initiate your customer relationship management database. - Show a potential investor that you have done your homework about the market. - Launch the selling process as quickly as possible. - Directly test every hypothesis you have built about the opportunity
Directly test every hypothesis you have built about the opportunity
The point of identifying and interviewing 10 high-potential customers is to: - Show a potential investor that you have done your homework about the market. - Directly test every hypothesis you have built about the opportunity - Initiate your customer relationship management database. - Launch the selling process as quickly as possible.
Directly test every hypothesis you have built about the opportunity
All of the following are steps in the Market Segmentation process EXCEPT: - Estimate market size by multiplying the total number of potential customers by the expected price of the product or service. - Brainstorm a wide array of market opportunities. - Narrow to a short list of interesting opportunities based on characteristics of the customers, competition, and your team. - Conduct primary market research by talking to and observing customers.
Estimate market size by multiplying the total number of potential customers by the expected price of the product or service.
A major disadvantage of an LLC (limited liability corporation) is that the entity must pay corporate taxes on any profits before distributing profits to owners, who then pay personal taxes on the income as well(double taxation).
FALSE
All intellectual property is subject to the same rules and requirements for obtaining protection.
FALSE
Choosing a single, beachhead market is important because it means that you will have the most options available in case you mis-analyze your customer need.
FALSE
In "Design Your Way to a Happier Life," authors Evans and Burnett encourage students to figure out what your passion is and then everything else will fall into place.
FALSE
In a sole proprietorship, the business owner is not personally liable for the debts and obligations of the business
FALSE
It is generally not a good idea to have someone on your executive team who fits the end-user profile because that person will not be able to be objective about the value of the product.
FALSE
Once you have identified your beachhead market, you can be certain that all your end-users can be described similarly and will want the same set of product features.
FALSE
Professor Bill Green believes that one of the significant problems with entrepreneurship is that entrepreneurs often operate without any sense of social responsibility when they bring new innovations to market.
FALSE
The power of the Value Proposition Canvas is that it helps ensure that your product features and capabilities target all of a customer's potential pains and gains.
FALSE
The value proposition for the Wii in 2006 was the superior graphics of the system.
FALSE
To be successful, a venture must select the absolute best beachhead market.
FALSE
When calculating Total Addressable Market, you should take the time to get it to be as accurate as possible, because you do not want to have to revisit it later.
FALSE
In "A Student's Guide to Startups," author Paul Graham states that the big problem with STUDENTS creating startups is: - Failure has limited consequences for students because the startup isn't their primary responsibility - Students are generally too inexperienced to be successful with a startup - Students have so much money they have no financial incentive to run a startup
Failure has limited consequences for students because the startup isn't their primary responsibility
The right place to start when you want to build a business is: - Finding an unmet need. - Building a product. - Hiring developers. - Recruiting salespeople.
Finding an unmet need.
The 'management mindset' is best described as: - Leveraging resources outside of your control to attain the goal - Utilizing a flexible process to explore multiple goals and paths simultaneously - Waiting for your boss to provide you with a set of tasks and goals - Finding the most efficient path to your goal given the resources currently at your disposal
Finding the most efficient path to your goal given the resources currently at your disposal
In "Most entrepreneurs are not rock stars," David Friedberg suggests that if your goal is to have impact with an innovation, your best option is probably: - Go to work for a large company since they have direct access to customers and users already. - Plan out for a 10-15 year timeframe to ensure that you can do quality work and address all necessary issues. - Create a practice venture first so you can test out the entrepreneurial experience before you launch your real venture. - Launch a new company and raise as much money as you can to scale the business quickly.
Go to work for a large company since they have direct access to customers and users already.
In the Dynamic Capitalism Typology Framework a franchise-based firm such as Noodles & Co. would have the following attributes: - Growth Rate - High; Innovation - Low - Growth Rate - Low; Innovation - High - Growth Rate - High; Innovation - High - Growth Rate - Low; Innovation - Low
Growth Rate - High; Innovation - Low
When figuring out the potential revenue per customer (e.g., the price of your product), you should consider all of the following EXCEPT: - How much you would like to charge your customers in order to maximize company revenue. - How much your potential customers spend to accomplish what your product does. - How much your potential customers have spent for similar products in the past. - How much value your product provides for customers.
How much you would like to charge your customers in order to maximize company revenue.
In "Design Your Way to a Happier Life," authors Evans and Burnett suggest that you can build your best opportunities by: -Imagining that your life is an experiment, so you should collect data and test ideas, like interviewing people already in jobs that you think you might enjoy. -Imagining that your life is like a pathway with road signs, so you need to plot out your course carefully and pay attention to the guidance that's available. -Imagining that your life is like a business deal, where you will only get what you want by hard-nosed negotiations. -Imagining that your life is like a trial, where you have to be constantly prepared to perform to meet the expectations of other people.
Imagining that your life is an experiment, so you should collect data and test ideas, like interviewing people already in jobs that you think you might enjoy.
Porter's Five-Forces model is an important business tool for figuring how: - Industry attractiveness (profitability) - Market attractiveness (trends) - Competitive advantage - The long-term prognosis for technological development
Industry attractiveness (profitability)
Once you have completed your high-level product specification, the next step is to: - Make a brochure for the product that targets the Persona. - Show the specification to as many target customers as possible. - Set up a website showing the product and pricing to see how much interest you generate. - Perform a cost analysis to generate an estimate for likely production costs.
Make a brochure for the product that targets the Persona.
Once you have completed your high-level product specification, the next step is to: - Perform a cost analysis to generate an estimate for likely production costs. - Make a brochure for the product that targets the Persona. - Show the specification to as many target customers as possible. - Set up a website showing the product and pricing to see how much interest you generate.
Make a brochure for the product that targets the Persona.
When discussing value propositions the term MVP stands for: - Minimum Viable Product - Multiple Value Possibilities - Maximum Vector Paths - Most Valuable Player
Minimum Viable Product
All of the following are the quantifiable product benefits that may create value for a customer EXCEPT: - Cheaper - Newer - Better - Faster
Newer
During the life cycle use case analysis, entrepreneurs commonly make all of the following mistakes EXCEPT: - Overestimating the amount of value the customer will gain by using the product. - Overestimating how easy it will be for the customer to use the product. - Overestimating the enthusiasm the customer has for the product. - Overestimating how long the customer will wait before purchasing the product again.
Overestimating how long the customer will wait before purchasing the product again.
During the life cycle use case analysis, entrepreneurs commonly make all of the following mistakes EXCEPT: - Overestimating the enthusiasm the customer has for the product. - Overestimating the amount of value the customer will gain by using the product. - Overestimating how easy it will be for the customer to use the product. - Overestimating how long the customer will wait before purchasing the product again.
Overestimating how long the customer will wait before purchasing the product again.
You have decided to take your t-shirt idea and turn it into a full-time business. What entity formation type likely represents your best option right now?
Partnership?????
At the most basic level, an industry is attractive when it is: - Profitable - Large and growing - Limited to only a couple other competitors - Easy to enter
Profitable
According to the "Entrepreneur Defined" reading, the following traits are likely indicators of entrepreneurial interest EXCEPT: - Autonomy (ability to start something without guidance) - Risk-taking - Flexibility - Purpose
Risk-taking
Prospect theory describes how consumers may view a new technology by what they are giving up versus what they are getting. Choose the following innovation that best represents this theory: - Satellite Radio | Give up: Free Music ; Get: Better Selection - Electric Cars | Give up: gas stations ; Get: battery - Diet Cherry Dr. Pepper | Give up: Coca-Cola taste ; Get: 2 flavors - Segway | Give up: walking ; Get: stylish vehicle
Satellite Radio | Give up: Free Music ; Get: Better Selection
A common mistake for early stage ventures is to try to: - Sell to everyone by making products that fit the need of every possible customer. - Sell to a highly-focused set of customers. - Sell only to potential customers with large amounts of disposable income. - Sell products based on a very narrow product-market fit.
Sell to everyone by making products that fit the need of every possible customer.
In "Where Is The Best Place To Learn How To Become A Successful Entrepreneur?" author Kimberly Whitler notes that it is generally easier to: - Start at a big company and then work for smaller companies or start your own venture. - Start at a consumer packaged goods company and then work your way to a technology company. - Start your own venture and work your way up to working for a large corporation. - Start at a local company and then work your way to a national or international company.
Start at a big company and then work for smaller companies or start your own venture.
A "Persona" should be an actual person who best represents the primary customer for the beachhead market.
TRUE
A copyright protects a form of expression that encompasses virtually any creative work (medium) that can be seen or heard.
TRUE
A good way to think about the Person for your new venture is "If I had only one end user to represent our End User Profile, who would it be?"
TRUE
A key advance of securing a beachhead market is that you should have the strength to attack adjacent (similar) markets with different offerings.
TRUE
A quantified value proposition identifies a tangible metric that aligns with the Persona's top priorities.
TRUE
A trademark is a word, name, symbol, sound, color, smell, or device that is used to identify and distinguish the products of a person or company from other products.
TRUE
According to the Kauffman Foundation, immigrants are nearly twice as likely as native-born Americans to start businesses.
TRUE
An end-user profile is a description of a narrowly defined subset of end users with similar characteristics and with similar needs.
TRUE
An end-user profile should be relatively narrow because you do not want to spend your time and resources trying to be everything to everyone.
TRUE
In a c-corporation, the shareholders vote to determine who sits on the Board of Directors, and the Board is responsible for hiring the executive officers, such as the CEO.
TRUE
In many cases, a "customer" includes both a primary customer who uses the product and a separate, secondary customer who pays for the product.
TRUE
Intellectual property refers to intangible personal property which may be protected by various legal mechanisms.
TRUE
Most publicly traded companies (companies listed on exchanges such as the NYSE and NASDAQ) are c-corporations.
TRUE
One of the most important aspects of a partnership entity is that any of the general partners can act on behalf of the organization without authorization from any of the other partners.
TRUE
One of the most important aspects of the Persona is to list that person's purchasing criteria in prioritized order.
TRUE
One possible result of interviewing 10 high-potential customers is discovering that there is a better Persona for your product than you previously identified.
TRUE
Professor Bill Green argues that an important aspect of entrepreneurship is the creation of an enterprise that can ultimately function independently from the entrepreneur.
TRUE
Reid Hoffman believes that entrepreneurs are "modern pioneers" because they have to make critical decisions and judgments in new circumstances.
TRUE
The Matthew Sacks video on Opportunity Recognition suggests that entrepreneurs should look around for emerging opportunities but also be willing to say "no" in the short term.
TRUE
The single necessary and sufficient condition for a business is a paying customer.
TRUE
The starting point for being an entrepreneur is answering the following question: "What can I do well that I would love to do for an extended period of time?"
TRUE
Your first beachhead market will likely be a learning experience, so it is generally better to pick a smaller market where you can get high exposure among customers.
TRUE
When students are interested in entrepreneurship but do not have a specific idea or technology, they should: - Survey a trusted group of friends and peers to identify an opportunity that resonates with like-minded people. - Look at current market trends to try to find something "hot." - Find an entrepreneurship "coach" who can provide guidance on opportunity identification and evaluation. - Take stock of personal interests, strengths, and skills to more readily identify good opportunities.
Take stock of personal interests, strengths, and skills to more readily identify good opportunities.
In the Five Forces, supplier power refers to: - The ability of suppliers to charge higher prices or demand better terms - The ability of suppliers to compete with other companies - The ability of suppliers to enter entirely new markets - The ability of suppliers to change industry with low switching costs
The ability of suppliers to charge higher prices or demand better terms
The Developer's Curse is best decribed as: - The developer is not the typical consumer and overvalues the problem and solution relative to typical customers. - Developers resist new things. - People value items in their possession more than they value items not in their possession - Individuals are more sensitive to gains than losses
The developer is not the typical consumer and overvalues the problem and solution relative to typical customers.
A Limited Liability Corporation (LLC) is described as a 'pass-through entity' because: - After the 1986 Pass-Through Act they were no longer regulated by the Federal government. - The entity passes income and resulting tax liability to the owners and their personal tax filings - The entity doesn't have to pay any import tariffs - The liability for business debts passes through to the owners.
The entity passes income and resulting tax liability to the owners and their personal tax filings
A Limited Liability Corporation (LLC) is described as a 'pass-through entity' because: - After the 1986 Pass-Through Act they were no longer regulated by the Federal government. - The liability for business debts passes through to the owners. - The entity passes income and resulting tax liability to the owners and their personal tax filings - The entity doesn't have to pay any import tariffs
The entity passes income and resulting tax liability to the owners and their personal tax filings
Which of the following is the best explanation for why an innovation would be likely to succeed in the market? - The entrepreneur is a good communicator and has access to key resources - It is better than what is currently available to customers - Good timing and/or good luck - The innovation marketplace is fundamentally random; path dependence means that innovation success is complete independent from any factors associated with the innovation or the entrepreneur
The entrepreneur is a good communicator and has access to key resources
The Endowment Effect is best defined as: - The genetic endowment that causes people to seek change - The historical trend that in a capitalist society each generation is endowed with the financial resources of the preceding generation. - The ability of an entrepreneur to endow the market with an improved product or service - The idea that people value an item higher when it is in their possession than not
The idea that people value an item higher when it is in their possession than not
According to the New Business Road Test, successful entrepreneurship requires evaluating all of the following EXCEPT: - The innovation - The market - The industry - The person or team
The innovation
All of the following are valid reasons that students (or any people) are interested in entrepreneurship EXCEPT: - The person has come up with a technological breakthrough and wants to capitalize on it or expedite how quickly it is deployed. - The person has a passion, is comfortable developing skills, and might want to control his/her own destiny. - The person has an idea that can change the world, or at least some small part of it, in a positive way. - The person wants to earn as much money as possible as quickly as possible.
The person wants to earn as much money as possible as quickly as possible.
Companies may need to generate two Personas when: - The venture will serve a two-sided market - The venture will target multiple beachhead markets in parallel - The venture has identified two target segments within the original target market - The venture plans to hire two different salespeople and wants to assign one Persona to each
The venture will serve a two-sided market
Which of the following is NOT part of the New Business Road Test for whether an opportunity is attractive? - The venture's core innovation - The market - The industry - The market segment - The venture's competitive advantage
The venture's core innovation
One of the best steps that you can take to overcome customer resistance to a new product is: - To make sure that the quality of the product is signaled by an attractively low price - To ensure that advertising clearly demonstrates how a customer would adjust behavior to best use the innovation - To position the product close to competitor products - To make the product compatible with existing customer behavior
To make the product compatible with existing customer behavior
The top priority in a Persona's purchasing criteria is: - Whatever concern keeps that person awake at night - Whatever product/service costs the least. - Whatever the competition had most recently offered - Whatever that person's boss has said is the most important thing to consider
Whatever concern keeps that person awake at night
To narrow your market segmentation effort, you should consider all of the following EXCEPT: - Whether you have enough capital (money) now to reach that segment. - Whether your target customer is well-funded and readily accessible. - Whether entrenched competition could block you. - Whether you could leverage that segment to target other segments.
Whether you have enough capital (money) now to reach that segment.
Getting some negative feedback while interviewing 10 high-potential customers means that: - You did not choose the right 10 potential customers-- you should identify 10 new high potential customers and start the interviewing process again. - Your opportunity is not viable-- it's time to go back to the drawing board. - Your product does not effectively target your Persona-- you need to brainstorm new product features before re-starting the interview process. - Your customer base actually cares about the problem, which is a good sign.
Your customer base actually cares about the problem, which is a good sign.
A trade secret can be protected for as long as: - 70 years - its secrecy is maintained - 20 years - the company maintains and updates its federal registration for the trade secret
its secrecy is maintained
The purpose of defining a persona for your beachhead market is to: - make the target customer tangible so that everyone has clarity and focus on the goal of making the target customer happy - have access to an actual human being who can answer question about the potential product service. - provide insight into the "influence" component of the customer decision-making unit. - add depth to your market analysis by narrowing the type of person most likely to actually purchase the product or service.
make the target customer tangible so that everyone has clarity and focus on the goal of making the target customer happy
To be considered a trade secret, information must be used in a company's business to give an advantage over competitors AND - the company must register the information with the federal government - the company must make reasonable efforts to keep the information a secret - the company must file for at least one other type of intellectual property protection on the information (patent, copyright, trademark) - the company must have kept the information a secret for at least 20 years
the company must make reasonable efforts to keep the information a secret
