Chapter 7

Question 1

Mission statements

Answer 1

short aspirational statements that aim to show where the business is going, how it is going to get there and why this is important

Question 2

What are the 3 main components of a mission statement

Answer 2

1. A vision – what are the start-up’s long-term aspirations? 2. A mission – what are the start-up’s main tasks, who are these tasks for and how does it deliver on these tasks? 3. Values – what is the start-up’s philosophy and values that guide how and why it does business?

Question 3

mantra

Answer 3

strapline that succinctly evokes the aims and values of the venture (‘quality, freshness and fair trade’ for a coffeeshop)

Question 4

intellectual property

Answer 4

the creation, use, and exploitation of mental and creative labour’ (expressions of ideas, how products look and products and processes themselves)

Question 5

negative right

Answer 5

the right to prevent others from using the idea or their identity.

Question 6

how does intellectual property help entrepreneurs in 3 ways?

Answer 6

1. In markets where there is a number of ways of solving a particular need, it protects a brand. 2. It attracts a premium. 3. It is attractive to equity financiers.

Question 7

4 main types of intellectual property

Answer 7

Patents – protection for how inventions and innovations work, how they are made or what they are made of. Designs – how something looks. Trademarks – the quality and identity (brand) of an idea (business). Copyright – an expression of an idea, such as literary works or computer programmes. (It is possible to protect an idea in multiple ways)

Question 8

3 things patent has to show

Answer 8

1. That the product or process is novel. 2. It involves an inventive step. 3. It is capable of industrial application.

Question 9

Where to get an patent and for how long is it valid

Answer 9

government, nation’s intellectual property office, European Patent Office, World Intellectual Property Organization and valid for a time (usually 20 years).

Question 10

how to defend idea when its disclosed

Answer 10

court (but expensive), trade secret: coca cola recipe, non-disclosure agreement.

Question 11

Teams

Answer 11

two or more individuals who have a significant financial interest and participate actively in the development of the enterprise

Question 12

Three core issues influence a team start-up’s chances of success

Answer 12

Relationships. Roles. Rewards.

Question 13

resource dependency

Answer 13

when you need a strange to fill in your gap of resources.

Question 14

advantage and disadvantage friend/familly business

Answer 14

lower cost of building team and the likelihood of having similar skills and experiences

Question 15

vesting

Answer 15

the process by which founder’s earn equity shares by achieving milestones such as reaching the first sale.

Question 16

Direct competitors

Answer 16

sell similar products such as a new bank offering financial services

Question 17

Indirect competitors

Answer 17

other sellers selling into the same market, such as Google or Apple offering financial services

Question 18

benefit of also looking at indirect competition

Answer 18

lead to fewer surprises

Question 19

Michael Porter’s Five forces

Answer 19

1. The threat of new entrants/entry barriers. 2. Buyer (customer) power, 3. Supplier power, 4. The threat of substitutes, 5. Intensity of rivalry (competition).

Question 20

what does Michael Porter’s Five forces measure

Answer 20

industry attractiveness

Question 21

blue ocean

Answer 21

new market (cost and differentiation focus)

Question 22

Red ocean

Answer 22

saturated market (cost or differentiation focus)