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Terms in this set (422)
The authors define entrepreneurship as
a discipline that seeks to understand how opportunities are discovered, created, and exploited, by whom, and with what consequences
______ are small, short-term loans often associated with entrepreneurs in developing countries
This is the discipline that seeks to understand how opportunities are discovered, created, and exploited, by whom, and with what consequences.
Which of the following is NOT a truth about entrepreneurship?
Entrepreneurship is reserved for startups.
The media often cover the meteoric rise of entrepreneurs such as Bill Gates (Microsoft), Steve Jobs (Apple), Mark Zuckerberg (Facebook),
Elon Musk (Tesla), and Travis Kalanick (Uber). According to the text, these stories:
are inspirational but they do little to represent the reality of entrepreneurship.
A temporary organization in search of a scalable business model is known as:
a start up
Effectuation is the theory that:
the future is unpredictable yet controllable
Contemporary researchers focus on how entrepreneurs________
think and act
______ are people who start several businesses, sometimes at the same time or sometimes one after the other.
Which of the following is true about effectual entrepreneurs?
They focus on creating a future rather than predicting it
According to the authors, what is the precursor to action?
the right mindset
The entrepreneurial method requires consistent practice so that ______ can be continuously developed and applied to future endeavors.
knowledge and expertise
The risk component for entrepreneurs______.
can be managed with the cycle of act-learn-build
Successful entrepreneurs tend to follow this approach to collaboration:
They collaborate with both potential customers and competitors
Research revealed what percentage of Inc. 500 wrote formal business plans prior to launching their companies?
less than 50%
According to the text, which of the following is the least important when launching a company?
Creating a business plan
What invention came to symbolize the ingenuity of Colonial America?
the lightening rod
Which Founding Father is considered one of history's greatest entrepreneurs?
What factor(s) contributed to the golden age of entrepreneurship?
all of these
A launching pad for creativity and innovation, the ______ provided people with the right to private property, access to a banking system, and protection in the form of patent laws.
During the______, everyone had a fairly equal chance of being an entrepreneur; inventors became more commonplace, producing new products and services alongside the merchants and industrialists.
First Industrial Revolution (1776-1865)
During which period was entrepreneurship at its height?
Second Industrial Revolution (1865-1920)
In the Pinnacle of Entrepreneurship (Second Industrial Revolution), the entrepreneur ______.
was considered "self-made" and was glorified in novels
During the period between 1920 and 1975, which of the following did NOT contribute to the decline of the traditional entrepreneur?
The transition toward a knowledge-based economy.
What era signaled a shift from the traditional entrepreneur to the big corporation?
Interwar and Postwar America 1920-1975
Which of the following led to entrepreneurship regaining its popularity over the last decades of the 20th century?
all of these
During which period of time was the "tech entrepreneur" born?
Knowledge Economy 1.0, 1975-Present
What generation is considered to be the most exposed to entrepreneurship education?
According to the text, why would some organizations not be enthusiastic about employees acting entrepreneurially inside a company?
Fear that they will leave the company and start their own business.
The launch of the "inglorious vegetable" at the French Supermarket Intermarché as a way of reducing food waste by selling imperfect vegetables at a 30% discount is an example of_____
What is the process of creating new products, ventures, processes, or renewal within large organizations?
The nonprofit "1001 Fountains for Tomorrow", whose goal is to provide safe drinking water for small rural villages in Cambodia, is an example of________
A benefit corporation (or B-Corp) is an organization certified by the nonprofit B Lab to ensure strict standards of social and environmental performance, accountability, and transparency are met. According to the book, which of the following statements is true?
"Buy One, Give One" promotions can generating sales while also raising awareness of social issues.
seek innovative solutions to social and environmental problems
To be certified as a benefit corporation (or B-Corp), an organization is rated on all the following except:
its global mission
What is the survival rate of family businesses transitioning from the first to the second generation?
less than 30%
What percentage of US businesses are family-owned or controlled by a family?
80% to 90%
According to the 2015/16 Global Entrepreneurship Monitor report, it is estimated that there are ______ entrepreneurs worldwide.
Individuals who believe they have the capacity and know-how to start a business without being burdened by the fear of failure are known as_______
Individuals who have set up a business they will own or co-own, which is less than three months old, and has not yet generated wages or salaries for the owners are known as ______.
Individuals who have been actively involved in a business for over three months but less than three and a half years are known as______
New business owners
Total Entrepreneurial Activity (TEA) is the percentage of the population of each country between the ages of 18 and 64, who are either__________
a nascent entrepreneur or owner-manager of a new business
Which of the following is NOT an aspect of the Entrepreneurship Ecosystem described in the chapter?
open-access patent databases
Which of the following is NOT a condition for small and medium businesses to flourish in a country?
Large population size
The older view to approaching entrepreneurship as a linear process (i.e. the steps are followed and the outcomes can be expected) is known as:
Entrepreneurs who determine their goals based on the resources they have are using ______.
Planning for the catering at an event by sending out invitations and asking for RSVPs by a certain date is an example of ______.
Friends show up unexpectedly to your house and are hungry. You go through your kitchen cupboards to see what ingredients you can throw together to prepare a satisfactory meal. This is an example of:
What is the dominant logic of large, established organizations?
The idea that the future is unpredictable yet controllable and entrepreneurs can "effect" the future is called:
the theory of effectuation
According to the text, what is/are the main obstacle(s) that prevents many novice entrepreneurs from employing the prediction approach to large endeavors, such as opening a new restaurant?
expense and time-commitment
What skill frees the imagination, opens up the mind to a wealth of opportunities and
possibilities, and helps foster innovation?
skill of play
What skill is best described as acting in order to learn—trying something, learning from the attempt and building that learning into the next iteration?
skill of experimentation
What skill best describes developing the ability to understand the emotion, circumstances, intentions, thoughts, and needs of others?
skill of empathy
What skill requires a general openness to the world and relates to unleashing our creative ability to create and find opportunities and solve problems?
skill of creativity
What skill helps make sense of all of the other actions required of play, empathy, creativity and experimentation?
skill of reflection
Alternative reality games and learning simulations are related to which skill?
skill of play
The act of taking a prototype directly to potential customers in order to acquire feedback is a hallmark of which skill?
skill of experimentation
After conducting market research, Olivia is still uncertain how to price her honey jars. She decides to bring samples to local farmer's markets and sell them at different price points. What skill is Jess practicing in this scenario?
skill of experimentation
After making a presentation, you reflect by describing what happened by considering what took place, what was said, and who was involved. What type of reflection does this describe?
After making a presentation, you reflect by focusing on how you felt during the presentation and how you managed those feelings. What type of reflection does this describe?
After making a presentation, you reflect by focusing on your own perceptions and reactions as well as the perceptions and reactions of others. What type of reflection does this describe?
After making a presentation, you reflect by thinking about the skills and knowledge you gained from the experience and if anything you have learned relates to anything you have heard about before. What type of reflection does this describe?
After making a presentation, you reflect by focusing on what went well and what didn't go as well, and if the experience was useful or helpful. What type of reflection does this describe?
After making a presentation, you reflect by considering the part you played in the presentation, your approach, what else you might have done, what you have learned about the experience, what questions you have, and what you need to consider as a result. What type of reflection does this describe?
According to research, what proportion of entrepreneurs who start businesses in the United States fail within the first 18 months?
8 out of 10
According to the authors, what is the primary thing high performers engage in to achieve high levels of performance?
The means of identifying an opportunity, understanding resource requirements, acquiring resources, planning, implementing, and harvesting is called:
Predictive logic should be used in situations of:
Creation logic should be used in situations of:
______ is based on the idea that because the future is unpredictable yet controllable and that entrepreneurs can affect the future.
A study by Darden School of Business professor Saras D. Sarasvathy showed that 89% of experienced, serial entrepreneurs used ______ thinking.
creative and effectual thinking
According to the authors, a body of skills that together comprise a toolkit for entrepreneurial action is called:
Entrepreneurs who determine their goals and then look for the resources to enable them to reach their goals are using:
What was Baekgaard and Miller's desired impact on the world?
create stylish, affordable bags for women
Which of the following is a component of The Practice of Entrepreneurship?
take a small action
When you ask yourself "What am I willing to lose? What am I truly willing to give up in terms of money, reputation, time, and opportunity cost?" you are practicing which component of The Practice of Entrepreneurship?
Calculating affordable loss
When you ask yourself "What do I know? Whom do I know?" you are practicing which component of The Practice of Entrepreneurship?
Starting with the means at hand
When you ask yourself "Should I quit or keep going? What's my next step" you are practicing which component of The Practice of Entrepreneurship?
Reflecting and being honest with yourself
Deliberate practice requires:
high levels of focus, attention, and concentration
An entrepreneur using predictive logic is likely to:
avoid failure at all costs.
Your impact statement:
identifies your desired impact on the world
Some of the benefits of deliberate practice are:
all of these
Robert Donat created a new hardware/software solution by drawing upon his knowledge from working in two diverse areas—the Army and hedge funds. His previous experience and knowledge played a role in his success. What term describes the factor that motivated him to start a business in the first place?
Mindset has been traditionally described as:
an established set of attitudes held by someone
The text describes two different types of mindsets. They are:
Growth mindset and fixed mindset
People with a fixed mindset:
perceive their talents and abilities as set traits
People with a growth mindset:
are eager to enhance their talents and abilities
Which of the following statements reflects a growth mindset?
I can learn anything I want to
When Karen is frustrated, she perseveres until she resolves the issue causing her frustration. Karen has a ______.
Which of the following statements reflects a fixed mindset?
I'm either good at something or I'm not
Research has shown that overly praising someone for only for their intelligence can:
create a fixed mindset
Research has shown that praising someone for how hard they work and practice can:
create a growth mindset
When Georgina is frustrated, she perseveres until she resolves the issue causing her frustration. Georgina has a ______.
George wants to challenge himself and feels entrepreneurism is his next challenge. George has ______.
a growth mindset
Jenni is fine when she fails as she sees failure as a way to learn. Jenni has ______.
Debra is always told by her faculty that she tries hard. As an entrepreneur, Debra has ______.
Ricky and Michelle are co-workers. When Ricky sees Michelle succeed, he feels inspired. Ricky ______.
has a growth mindset
Paul is a very driven person who believes his effort and attitude determines everything. Paul ______.
has a growth mindset
Bob firmly believes he is either good at something or he's not. It is as simple as that Bob ______.
has a fixed mindset
When Jerry encounters a tough problem at work, he tends to just give up. Jerry ______.
Image you score low on a math test. If you had a fixed mindset, you might say which of the following?
I'll never be good at math
Which of the following is a benefit of having a growth mindset in the context of entrepreneurship?
A growth mindset encourages entrepreneurs to take action even in uncertain circumstances
An entrepreneurial mindset can be described as:
the ability to quickly take action and get organized under uncertain conditions
What is another term for "thinking about thinking"?
Which of the following is an example of metacognition:
rereading text you don't understand the first time
The entrepreneurial mindset is about:
who you are, who knows you, who you know, what you know
In the context of entrepreneurship, passion is:
an intense positive emotion that keeps entrepreneurs focused and motivation
Some of the positive effects of passion can be:
all of these
energy joy resilience
Some of the negative effects of passion can be:
all of these
Habit can be best understood as:
a pattern of behavior carried out often and regularly
In the context of entrepreneurship, ______ is a process whereby people can influence and control their own behavior, actions, and thinking to achieve self-direction and self-motivation.
Strategies that endeavor to make aspects of a task or activity more enjoyable by building in certain features, or by reshaping perceptions to focus on the most positive aspects of the task are known as ______________.
value it holds.:
natural reward strategies
Brenda is very critical of her own actions; if something goes wrong, she assesses why it went wrong and how she can avoid making this mistake in the future. This is an example of ______.
When you stop and deliberately ask yourself questions about what you are accomplishing, what you are not accomplishing, what is standing in your way, you are practicing ______.
______ help entrepreneurs form positive and productive ways of thinking that can benefit performance.
Constructive thought patterns
the capacity to produce new ideas, insights, and inventions that are valuable and unique
____ can prevent an entrepreneur from practicing creativity:
_____ can cause self-doubt, insecurity, and discomfort.
Maddox is emotional, likes to present possibilities, and is focused on big-picture projects. Overall, Maddox is using ______.
A research study conducted by Mihaly Csikszentmihalyi showed that creative people tend to:
to have polarized traits
Identify the example of polarized traits.
High energy; quiet at rest
All of these
______ is the art of spontaneously creating something without preparation.
With improvisation, the following statements are true EXCEPT ______.
everything is unimportant
When jazz players improvise, MRI scans show ______.
that musicians tended to switch off the self-censoring part of their brain giving them the ability to express themselves without restriction
Which of the following is appropriate during improvisation:
A recent study showed that ______.
improvisational behavior was more evident in entrepreneurs starting new ventures
Improvisation is defined as ______.
the art of spontaneously creating without preparation
According to improvisation guidelines:
Everything is important.
Improvisation is connected to the entrepreneurial mindset because:
it helps develop the ability to change direction quickly
Which of the following is one of the six main emotional roadblocks to creativity identified by James L. Adams?
fear, perceived lack of challenges, dislike for incubating ideas
A training exercise to deal with limited resources, environmental conditions, or even a changing mindset is ______.
According to the text, the only way to get results is to:
Entrepreneurial self-efficacy is ______.
the belief that entrepreneurs have in their own ability to begin new ventures
Which of the following would apply to someone who scores high on The General Self-Efficacy Scale?
If I am in trouble, I can usually think of a solution
Which of the following would NOT apply to someone who scores high on The General Self-Efficacy Scale?
I get flustered when facing difficulties
Social entrepreneurs and traditional entrepreneurs are similar in that:
both identify opportunities
Social entrepreneurship is the process of:
sourcing innovative solutions for social and environmental problems
Social entrepreneurship differs from other forms of entrepreneurship in that it gives higher priority to:
social value creation
A NGO is ______.
a nongovernmental organization
Wicked problems are defined as:
large, complex social problems with no clear solution
The combination of financial assistance such as grants with a high level of engagement by the funder is known as __________?
venture philanthropy funding
Which of the following is an example a wicked problem?
. A venture striving to reduce childhood mortality
Which of the following is an example of a wicked problem?
A community attempting to prevent terrorism
Overpopulation and the dramatic increase in life expectancy are examples of ______.
Which of the following is an example of a wicked problem?
widespread famine in war-torn regions in Africa, limited access to healthcare in rural India, the global refugee crisis
all of these
Nigerian investor and philanthropist Tony Elumelu has an alternate solution to the refugee problem. He has decided to:
invest $100 million to support entrepreneurship in African countries with refugees living in poverty.
Which of the following is NOT true of wicked problems?
Every wicked problem is essentially the same.
The aim of a social purpose venture is to:
both resolve a social problem and make a profit
The organic clothing company PACT designs, manufactures, and distributes premium cotton underwear without using pesticides, fertilizers, or chemicals. PACT is an example of:
a social purpose venture
Social consequence entrepreneurship describes:
a for-profit venture whose primary market impact is social
Sword and Plough hires army veterans to recycle surplus military materials such as parachutes, sleeping bags, and tents, into fashionable bags and accessories. It donates 10% of its profits to veteran organizations. Sword and Plough is an example of:
an example of social consequence entrepreneurship
In enterprising nonprofits:
both the venture mission and the market impact are for social purposes
Which type of venture primarily has an economic market impact and economic venture mission?
Which type of venture primarily has a social market impact and social venture mission?
enterprising nonprofit venture
Which type of venture primarily has an economic market impact and social venture mission?
social purpose venture
Which type of venture primarily has a social market impact and economic venture mission?
social consequence venture
Earned income activities allow enterprising nonprofits to:
sell products or services that are used as a source of revenue generation
The Woodland Park Zoo sells exotic animal dung to the public who can then use the dung as garden fertilizer. This is an example of:
Venture philanthropy funding:
combines financial assistance with a high level of engagement by the funder
A venture philanthropist who is focused on building the long-term viability of the organization, achieving greater social impact, and operational efficiency is focused on:
organizational capacity building
A hybrid model of social entrepreneurship:
describes an organization with a purpose that equally emphasizes both economic and social goals
______ can seek investment from social venture capitalists known as impact-investment funds.
Both nonprofit and for-profit organizations
Estimates are that the SVC (social venture capitalist) market could grow to ______ due to the rise of more socially conscious entrepreneurs looking for impact investment opportunities.
In the context of social entrepreneurship, stakeholders refer to:
all the people or groups effected by or involved with the social enterprise's objectives
According to the text, there are three primary attributes of stakeholders to consider:
power, legitimacy, urgency
____ behave in ways that are appropriate, proper, and desired in the context of the organization or community.
____ have the ability to either help or hinder your social objections.
____ demand your attention.
Stakeholders who hold power but do not tend to use that power unless they are given a reason to do so are considered:
Stakeholders who hold no power to influence and no urgent claims but who have legitimacy are considered:
Stakeholders who possess the urgency attribute but have not power or legitimacy are considered:
Stakeholders who have both urgency and legitimacy but lack the power to influence are considered:
Stakeholders who have power, legitimacy, strong influence are considered:
Stakeholders who possess both power and urgency but may use their power to coerce are considered:
Stakeholders who posses power, legitimacy, and urgency are considered:
CSR stands for:
corporate social responsibility
A corporation with profit goals can have a CSR strategy if:
pursue social objectives in addition to pursing profit
The biggest difference between social entrepreneurship and corporate social responsibility is:
social entrepreneurship places equal emphasis on social and economic goals
Which of the following is a business benefit of CSR?
decreased costs by reducing packaging, energy expenses, and shipping, increased number of engaged customers, improved public image
all of these
A work integration social enterprise (WISE) is a social enterprise:
that aims to integrate people who have been socially excluded into work and society through productive activity
Which of the following is an example of a work integration social enterprise?
a venture that trains former gang members to be personal trainers
Which of the following is an example of a work integration social enterprise?
a venture that provides educational services for women in prison
Which of the following is an example of a work integration social enterprise?
a venture that hires out employees with autism
What are the three central characteristics of opportunity?
potential economic value, novelty or newness, and perceived desirability
According to the text, what is the most common form of value?
The Bigbelly waste management and recycling company is an example of a company that generates what kind of value?
economic and environmental value
Opportunity is defined as ______.
an apparent way of generating value through unique, novel, or desirable products or services that have not been previously exploited
Maci has an idea for a business. For it to be recognized as a viable opportunity, the idea must ______.
have the capacity to generate value
A shoe company starts an initiative to manufacture an affordable shoe for the poor in developing countries. This is an example of what form of value?
According to the text, all forms of value are predicated on what assumption?
There is a market populated with enough people to buy your product or service.
According to the text, on what dimension would today's smartphone score the highest in the idea framework?
According to the text, what three criteria does an idea have to meet in order to be rated as an innovation?
novelty, usefulness, and value
In what area does the difference between innovation and invention lie?
Inventions that succeed in finding a market move on to what stage?
"An apparent way of generating value through unique, novel, or desirable products or services that have not been previously exploited" is the definition of what term?
What accounted for the popularity of Bette Nesmith Graham's Liquid Paper correction fluid?
It was novel, useful, and practical.
What is the first step in creating and identifying opportunities?
What strategies involve taking time to think carefully about a problem by breaking it up into parts, or looking at it in a more general way in order to generate ideas about how certain products or services can be improved or made more innovative?
What strategies involve using memory to retrieve information to make links or connections based on past experience that are relevant to the current problem using stimuli?
What strategies involve suspending disbelief and dropping constraints in order to create unrealistic states, or fantasies?
What are techniques that help to break our minds out of mental fixedness in order to bring about creative insights?
What strategies involve consciously making links between concepts or ideas that are not normally associated with each other?
What strategies are employed to enhance and modify existing ideas in order to create better alternatives and new possibilities?
What technique involves group members stimulating each other to come up with new or improved ideas?
By envisioning themselves as human hairs, which strategy did the Gillette team use to come up with a new shampoo?
What strategy is related to the technique of thinking about the opposite of something you believe, in order to explore a new perspective?
Asking yourself "What would Napoleon do?" in order to perceive what he would do in a situation is a technique related to which of the following strategies?
Brainstorming is an example of what idea generation strategy?
The ______ approach is a concept that assumes that opportunities exist independent of entrepreneurs and are waiting to be discovered.
The ______ approach states that opportunities do not exist independent of entrepreneurs but are, instead, a product of the mind.
Having had no prior knowledge of the market for his product sweater, what approach did Jack McCarthy of Ugly Christmas Sweaters utilize when putting his product up for sale?
What method is used by entrepreneurs in systematically attempting to discover existing opportunities?
What term do the authors use to describe the ability some people have to identify opportunities?
Which of the following is NOT a reason entrepreneurs may be more adept at spotting opportunities than non-entrepreneurs?
They have a greater tolerance for failure.
Pattern recognition is the process of identifying links or connections between ______.
unrelated things or events
Put the following in order of increasing relevance (from low to high) to founding new ventures:
idea generation, creativity, opportunity recognition
Idea generation is defined as ______.
production of ideas for something new
Creativity is defined in the text as ______.
production of ideas for something that is new and also potentially useful
Opportunity recognition is defined as ______.
recognition that ideas are not only new and potentially useful, but have the potential to generate economic value
What are the three processes that entrepreneurs typically go through before they are able to identify an opportunity for a new business venture?
idea generation, creativity, and opportunity recognition.
What is the most dominant of the strategies for idea generation within group scenarios?
Whereas decision-making is perceived as ______ within the finding approach, decision-making is thought to be ______ in the building approach.
_____ is defined as a way of generating value through unique, novel, or desirable products which have not been previously exploited.
How do irrelevant products, like New Coke or Crystal Pepsi, score on the Neck Idea Classification Matrix?
They score low on both novelty and usefulness.
The Idea Classification Matrix presented in the text ______
compares the degree of novelty with the degree of value and usefulness
According to research, where do entrepreneurs primarily source their information?
personal contacts and relevant publications
Cognitive styles attributed to successful entrepreneurs include a higher degree of ______.
intelligence, creativity, and self-efficacy
What company states "thinking like a designer can transform the ways organizations develop products, services, process, and strategy"?
______ is a toolkit for an entrepreneur to solve complex problems for people.
Design thinking applies to ______.
everyone, regardless of experience level
In the context of design thinking, what term is used to refer to human emotions and desires?
The text defines design thinking as a process used to ______.
solve complex problems and navigate uncertain environments
What is one of the biggest obstacles to design thinking?
fear of failure
The starting point of human-centered design thinking is which of the following?
What do people need?
What concept in design thinking is described by the question "what can be possibly achieved in the near future?"
What concept in design thinking is described by the question "how sustainable is the idea in the long term?"
What are the three criteria for a successful idea in design thinking?
feasibility, viability, desirability
Desirability in design thinking refers to which of the following concepts?
The idea gives people something they need.
In what way did IDEO study the needs for a medical device manufacturer that wanted to design a new device for nurses to enter data before a surgical procedure?
They observed nurses.
In addition to understanding how people do things, empathy helps you understand ______.
why people do things
When IDEO assisted Rise Science, they collaborated to ______.
identify opportunities for change
How does IDEO look at the design-thinking process?
It occurs in overlapping phases.
What is the best description of divergent thinking?
You expand your perspective to generate as many ideas as possible.
What is the best description of convergent thinking?
a way of identifying which ideas have the most potential
In the context of design thinking, what is meant by inspiration?
the problem or opportunity that triggers the search for a solution
How does the text define inspiration?
the development of a design challenge and deeper understanding of users
Drew notices that her electric cables and cords are unsightly and could cause someone to trip. She asks, "How might these wires be secured differently?" This question is known as which of the following?
a design challenge
In the design-thinking process, generating and developing new ideas based on observations gained during the inspiration process is called ______.
Needs we have but don't know we have are called ______ needs.
Steve Jobs was very good at identifying customers' ______.
During what phase of design thinking are ideas generated through the ideation process are transformed into concrete actions?
The main purpose of the implementation phase is to do which of the following?
Test assumptions of new ideas to shape them into viable opportunities.
How are ideas tested in the implementation stage?
through rapid prototyping
What best describes the design challenge in IDEO's design of Lufthansa plane seats?
How can we create a more comfortable seat for business travelers?
In the inspiration phase, closely monitoring the behavior and activities of users in their own environment is called ______.
Insight might best be described as which of the following?
an interpretation of observation information that drives opportunities
Recognizing patterns generates ______ that let entrepreneurs see everyday objects in new light.
An entrepreneur is known to participants but maintains a neutral stance. What type of observation technique is used?
observer as a participant
Being a keen observer requires _____
According to the textbook, what type of observation is used with inner-city cultures?
participant as observer
In the acronym AEIOU, what does A stand for?
In the AEIOU model, what does I stand for?
What is a way to increase your powers of observation?
change your personal routines
Interviews should have open-ended questions. Which of the following is an open-ended question?
What concerns would you have in using this product?
What is the "peeling the onion" method of interviewing?
Keep asking "why" questions until you understand the core root of the problem.
What is the golden rule of interviewing?
Actively listen to the other person.
Which of the following would indicate that an interviewer is actively listening?
The interviewer reflects back or paraphrases what the person just said.
You are interviewing someone about a new concept in debit cards. The interviewee immediately tells you that he hates debit cards and never uses them. What would be your appropriate next step?
Explore why he hates debit cards.
An empathy map is a tool that helps you ______.
collate and integrate your interview data to discover new insights
What would be the insight if an empathy map revealed that someone said he enjoyed being a vegetarian, but sighed and said that he had trouble making food so that the family would not miss meat?
There is a conflict between his enjoyment and the goal of serving the family what they like.
In the context of design thinking, what kind of thinking allows us to move from openness to understanding, from abstract to concrete, and from what is to what can be?
To develop empathy, design thinkers make use of what two primary tools?
interviewing and observation
A small and diverse group meets to brainstorm ways they can raise money for a new theater group and establishes no suggestions are off-limits. In what type of thinking is the group engaged?
"How might we redesign how adults learn online?" is an example of which of the following?
a design challenge
Why is it important to support "wild ideas" during brainstorming sessions?
Wild ideas can often give rise to creative leaps.
According to the authors of Designing for Growth, what question focuses on making decisions about what the customer really wants?
According to the authors of Designing for Growth, what question encourages you to imagine all of the possibilities without regard to the reality of the ideas?
Why is design thinking important as an entrepreneurial skill?
Today's businesses are faced with complex challenges with no easy answers.
What phase of design thinking is associated with experimentation?
Why is experimentation required?
to strengthen ideas
Why is experimentation required?
to make sure that entrepreneurs have the right assumptions about meeting the demands of potential customers
What is a hypothesis?
an assumption tested through experimentation
Which of the following is an important benefit of experimentation?
Assumptions are validated or proven false.
Experiments need to have a clear purpose, be achievable, and generate ______.
Before opening his new bakery, Carlos has received numerical ratings for each of his products from family and friends he has enlisted as tasters. Now Carlos is adding up the ratings for each variety. What step in the scientific process of experimentation is Carlos engaged in?
analyzing the data
Rather than just gathering data, an experiment matches an outcome to which of the following?
If an experiment outcome indicates that the original hypothesis was incorrect, what should the entrepreneur do?
adapt the original assumption
The first step of the scientific process for an entrepreneur is which of the following?
to ask a lot of questions
What did the founder of Amazon come to discover that encouraged him to begin the scientific process?
He read about the huge growth of Internet usage.
What was the first step of experimentation that the founder of Amazon began using the process to assess online business opportunities?
He asked questions about shopping behavior and mail order shopping.
Before Carlos opened his new bakery, he baked a variety of sample cupcakes and cookies to sell at local farmers markets and other local events. Which stage of the scientific process of experimentation does this represent?
testing the hypotheses by running experiments
As an entrepreneur, one should think like a scientist and ______.
not put as much time or precision in experiments as a scientist would
In experimentation, an entrepreneur's goal should be to do which of the following?
Use continual iteration to test and shape ideas.
What is the last step of the scientific process?
assess the results of the data analysis
The owner of Amazon.com developed a site for a relatively low cost and offered books on the site. What stage of the scientific process was the owner executing by doing this?
testing the hypothesis by running an experiment
What question is asked when an entrepreneur draws conclusions from the results of the data analysis?
Do the results support the hypothesis?
How should an entrepreneur approach experimentation?
use quick, low cost methods of experimentation informed by scientific thinking
What hypothesis did Subway marketers make during the 2008 recession?
Selling foot-long subs at the reduced price of $5 would increase sales.
How did Subway carry out their experiment to test the effect of $5 subs?
They tested the price of the sub at selected stores for a limited period of time.
The best way to conduct an experiment is to ______.
test the product, service, or idea with real customers
In general, how many different types of customers are there?
The customers who actually buy, use, and give feedback on your product are called which of the following?
People with a large following who can affect purchasing decisions are called ______.
Customers who have the ability to approve large scale purchases are called which of the following?
What is the term for customers who have a high level of authority in their ability to approve purchases others make due to their high position in the hierarchy?
A customer who delays or vetoes the purchasing decision is referred to as which of the following?
Which of the following participant right is an ethical requirement when performing an experiment?
the right to informed consent
How have large businesses traditionally gauged customer tastes and preferences?
by analyzing large amounts of historical data
The main problem with analyzing historical data is that ______.
Historical data can provide insight into past behaviors, but may not predict behavior in new environments.
Which of the following is the main problem regarding intuition in the role of decision making?
It does not provide evidence to support the idea.
Why do some organizations discourage experimentation?
They fear failure or incurring short-term loss.
In designing experimentation opportunities, on which of the following should the entrepreneur focus?
partners, customers, distributors
What do the authors suggest about using data that was not specifically gathered to test the hypothesis?
It should not be ignored. Keep track of everything.
If you were to storyboard the idea for Rent the Runway, which offers rentals of designer dresses, in what part of the framework would the fact that most women cannot afford designer clothes fall?
If you were to storyboard the idea for Rent the Runway, which offers rentals of designer dresses, in what part of the framework would the fact that the rental model gives many more women the opportunity to wear designer dresses, which they could have never afforded before, fall??
The ability to make connections, expand our knowledge, and become more innovative is often the result of which of the following?
trying out new experiences and learning new skills
Taking apart products and putting them together again can be thought of as experimentation because doing so ______.
generates ideas about how we can make our products or services work better
A pilot test ______.
is a small-scale study conducted to assess the feasibility of a product or service
A prototype is described as which of the following?
an initial version of a product or service designed for use in experimentation
What is necessary for a prototype to be effective?
It must communicate what our ideas look like, behave like, and how they work.
A high-level view of thoughts and ideas displayed in sequence through drawings, sketches, or illustrations is called a ______.
A storyboard is classified as what category of business development tools?
Who is credited with developing the idea of storyboarding?
What is the advantage of storyboarding that makes it so effective?
shorter, provokes discussion, visual element gets the idea across quickly
In storyboarding, who or what is at the center of the story?
What are the elements in the framework for storyboarding?
problem, solution, benefit
What does one hope the storyboard will do when presented?
If you were to storyboard the idea for Rent the Runway, which offers rentals of designer dresses, in what part of the framework would the fact the online business would allow wowen to have access to designer dresses for one-tenth of the original cost?
A ______ describes the rationale of how a new venture creates, delivers, and captures value.
The practice of hypothesizing, testing, and validating to create a business model is called ______.
How do business models help entrepreneurs create value?
by fulfilling unmet needs in an existing market
Fulfilling unmet customer needs using an existing product or service is called ______.
What is the relationship between the business plan and the business model?
A business model is a journey to gather evidence while a business plan is a formal document.
It is typically easier for new businesses to change their business model because new businesses ______.
tend to be smaller and more agile
BlackBerry, which gained significant market share in the early 2000s in the business, government, and consumer markets, lost market share because ______.
competitors offered smartphones with better designs and more features
Given that startups can be flexible in their business model, what general guide should they follow?
Existing models should be prepared to adjust as markets change.
What are the four parts of a business model?
offering, customers, infrastructure, financial viability
The offering includes which of the following?
the customer value proposition
Within a business model, customers refer to ______.
the people who populate the segments of the market your offering intends to serve
The infrastructure generally includes ______.
all the resources that are needed to deliver the CVP
Which of the following would be included when describing the infrastructure?
The revenue and the cost structures would be included in which of the four parts of the business model?
Which of the following is necessary for an effective customer value proposition (CVP)?
It must offer better value than the competition.
A CVP requires that you think about your business from the perspective of what group?
The first step in creating your CVP is ______.
uncovering what your customer really needs
What problem did IKEA solve for customers in its CVP?
lack of attractive low-cost furniture
What problem did FedEx solve for customers in its CVP?
the lack of easy, door-to-door, overnight delivery of packages
To develop a good CVP, products must not only fulfill a need but also ______.
fit into customers' lifestyles
Which of the following allowed Tata Motors to be successful?
it's low-cost cars
What are the four major categories of problems customers typically experience?
lack of time, lack of money, lack of skill, lack of access
As presented in the text, what major customer problem did ThedaCare hospital system solve in their CVP?
lack of time
Which term refers to the CVP approach that involves listing all the advantages of your product or service without comparing it to others?
What is the key feature of the resonating-focus approach to CVP?
It focuses on why people will like your product.
Which of the following is considered the "gold standard" for CVPs?
What type of target market do toilet paper manufacturers target?
Which of the following best defines the term mass market?
a large group of customers with similar needs or problems
A ______ market is a small market segment comprised of customers with specific needs and requirements.
Breaking customers into groups according to their different needs and problems would create which of the following market types?
Which of the following offers a variety of products to two or more customer segments with different needs, even if the resulting markets are unrelated to one another?
Which term describes two or more customer segments that are linked but independent of each other?
Which of the following is most likely to have a diversified market?
a hardware store that sells to contractors and nonprofessionals
In the business model canvas (BMC), what is covered under the offering?
the value proposition
In the business model canvas (BMC), what components are related to customers?
customer segments, channels, and customer relationships
In the business model canvas (BMC), what components are included in infrastructure?
key activities, key resources, key partners
In the business model canvas (BMC), what components are included in financial viability?
cost structure and revenue streams
The answer to the question, "What are the different ways I can reach my customer?" will result in which component of the BMC?
Which of the following is the BMC component most involved with building positive feelings about your business and customer loyalty?
What is the right side of the BMC focused on?
When entrepreneurs are figuring out suppliers, associates, and distributors, they are determining ______.
What is the left side of the BMC focused on?
If an automobile manufacturer advertised an "automobile for all ages," what market is it addressing?
The ______ approach to CVP involves identifying and promoting all the benefits of your product or service relative to the competition and recognizes your offering is unique and different from others in the market.
When determining your revenue streams, which of the following questions is among those you should ask yourself?
How much are my customers willing to pay?
When determining your cost structure, which of the following questions is among those you should ask yourself?
What resources are the most expensive to get?
A common feature in the stories in the text about IKEA, FedEx, and Tata Motors is that ______.
distribution occurs in a different way from traditional services
Revenue can be described as which of the following?
the income gained from the sale of goods or services
A business model ______.
describes how a venture will create, deliver, and capture value
Which of the following is true about a revenue model?
It is a key component of the business model.
A company's plan for how it will earn income and generate profits is called the ______.
Google's "cost-per-click" model is a type of ______ revenue model.
Tony owns a bicycle shop where he sells bicycles, repairs them, and sells accessories. How many revenue streams does Tony's business have?
Which revenue model measures the amount of revenue generated by the number of items sold by the company?
Cylle installs a unique home entertainment center. He charges a flat fee of $1,200 for the system and the installation. What revenue model does Cylle employ?
Which of the following would be considered an intangible?
The razor-and-razor-blade revenue model ______.
involves offering an item at no or low-cost to encourage the sale of expensive complementary or disposable products later
Brent has designed a barbeque smoker that will sell for $29.99 and appeal to campers. The product uses a disposable unit that will protect the food during smoking and make cleanup easier, which customers can replace after 8-10 uses. What revenue model is Brent planning on?
Carol sells a downloadable product that uses bar codes to conduct comparison shopping. Carol's product is an example of ______.
an intangible sale
Why is the razor-and-razor-blade model also known as the printer-and-ink model?
The printer is sold at a low cost, but ink or toner is priced much higher.
Intermediation revenue is associated with ______.
the use of third parties (or "middlemen")
Airbnb is considered an intermediation revenue model because it ______.
charges a commission for connecting home renters with home owners
Which of the following is the role of the broker in an intermediation revenue model?
Brokers organize transactions between buyer and seller.
The revenue model associated with giving permission to other parties to use protected intellectual property in exchange for fees is called the ______.
licensing revenue model
Pam developed an iPhone app and gave Apple permission to sell the app to its customers. Through what revenue model does Pam get revenue?
In which revenue model do third parties such as brokers generate money?
intermediation revenue model
In which revenue model does an existing business allow another party to trade under the name of that business?
a franchising revenue model
What is a likely reason why someone would pay money for a franchise?
They will not have to spend the same amount of time marketing and building the brand.
What revenue model involves charging customers to gain continuous access to a product or service?
subscription revenue model
What revenue model provides professional services on a time and materials contract?
professional revenue model
Joe owns a construction company and prices his services based on labor hours and the cost of material. Which of the following revenue models is Joe using?
professional revenue model
What revenue model charges customers fees based on how often goods or services are used?
utility and usage revenue model
What revenue model mixes free basic services with premium or upgraded services?
freemium revenue model
What is the primary source of revenue for Skype, the company that offers online video and phone service?
the fees it charges for Skypeout, the service that calls land lines and cell phones
How do free newspapers like Metro gain revenue from free products under the freemium model?
They are paid to feature advertisements.
Which of the following refers to pricing a product or service above its market value to pay for the loss of giving a product away for free or below its market value?
What is the main reason customers are attracted to direct cross-subsidies?
It eliminates or reduces the upfront cost of a product or service.
Which of the following refers to the model that gives a product away to one party but charges another party?
What is the first key driver of revenue?
The four key revenue drivers are ______.
customers, frequency, selling process, price
The revenue driver that is addressed when a company offers a frequent shopper award is ______.
What are the two types of costs that should be taken into consideration when understanding cost drivers?
cost of goods sold and operating expenses
The costs that include design, material, manufacturing, packaging, and other costs before a sale can be made to the customer are referred to as ______.
cost of goods sold
Another term for an income statement is _____
profit and loss statement
The financial report that measures the financial performance of your business on a monthly or an annual basis is the ______.
profit and loss statement
The income statement ______.
subtracts the cost of goods sold and operating expenses from the total revenue to determine net income
In what pricing strategy prices are guided by the price other businesses set for similar products and services?
A form of pricing high, what strategy is used for new products that have no competition?
In what type of pricing customers are encouraged to believe that the product is less expensive than it really is?
______ is the degree to which both businesses and customers believe that the pricing is reasonable.
What pricing strategy packages goods together at a lower price than if they were sold separately?
Cost-led pricing refers to which of the following pricing calculations?
calculating the cost of manufacturing and delivering the product and adding a profit margin
What method of pricing involves pricing the product based on how it benefits the customers?
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