Opportunity Recognition, Shaping, And Reshaping

Question 1

What are 3 crucial components for a successful venture?

Answer 1

Opportunity
Entrepreneur
Resources

Question 2

What are the key characteristics of an opportunity

Answer 2

Timely, durable, attractive, customer centric

Question 3

What are things to look for in an opportunity?

Answer 3

Average revenue per user>cost of customer acquisition
10x rule- idea has to be 10x better than what ‘s on the market
Unique value proposition
Defensible competitive advantage
Larger and growing market
Access to customers
Access to needed resources

Question 4

What are the 2 types of capital for a startup?

Answer 4

Debt
- retain full ownership of the company
- higher risk
- requires repayment, careful cash-flow planning

Equity
- giving ownership to outside investors
- investors take most risk
- no repayment, careful capital planning investment

Question 5

What capital do the vast majority of investors start their business investing with?

Answer 5

Personal savings
- sweat equity
* ownership earned by the entrepreneur in line of taking salary

• Double jeopardy
• when an entrepreneur has all of his or her personal net worth and salary linked to the startup

Question 6

What is the financing cycle

Answer 6

Personal savings and sweat equity -> angel investing -> govt grants -> venture capital -> initial offering

Question 7

What is profit

Answer 7

• Gain or loss on the income statement
• doesn’t accurately reflect the cash inflow and outflows of the company
• some cash dealings impact cash flow but not profits

Question 8

What is cash flow

Answer 8

• measures the flow of cash during a given timeframe
• 3 elements: operations, investing, and financing
• plan and monitor closely

Question 9

What is double dipping

Answer 9

Build once -> sell twice -> monetize 3 times

Question 10

What is the IDEO technique

Answer 10

• idea multiplication technique
• gather stimuli
• multiply stimuli
• create concepts
• optimize practicality

Question 11

What are some methods to generate ideas

Answer 11

Focus groups
Brainstorming
Brainwriting
Problem inventory analysis

Question 12

Where could be sources of new ideas

Answer 12

Consumers
Existing products and services
Distribution channels
Fed/provincial govt
Research and development

Question 13

What are some macro trends?

Answer 13

Wearable trend
Green trend
Payments
Maker trend
Mobile
Health
Lot trend

Question 14

What is customer development?

Answer 14

Process of identifying, finding, and talking to your customer to validate the assumptions you’ve made about your business

Question 15

Why is innovation important?

Answer 15

Key to economic development of any company
Based on uniqueness of the idea
* breakthrough
*technological
* ordinary

Question 16

What is new entry

Answer 16

• essential acts of entrepreneurship
• if new entry is exploited, performance depends on
• entry strategy
• risk reduction strategy
• way firm is organized
• competence of the entrepreneur and management team

Question 17

How can one assess the attractiveness of a new entry opportunity?

Answer 17

• information on a new entry
• window of opportunity may be open or shut
• confort in making decisions under uncertainty

Question 18

What are the ups and down of a first mover strategy

Answer 18

• develop cost advantage
• less competitive rivalry
• can secure important suppliers and channels of distribution
• better positioned to satisfy customer
• gain expertise through participation
• do not always prosper
• advantages must outweigh the disadvantages
• environmental instability
• element of newness

Question 19

What is an opportunity assessment plan?

Answer 19

• shorter than a business plan
• focus on opportunity not the venture
• pro format financial statements
• basis of the decision to act on an opportunity or wait

Question 20

What is a margin

Answer 20

A ratio of profitability
- net income /revenues