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Entrepreneurship > Tenta let's go! > Flashcards

Tenta let's go! Flashcards

1
Q

What is a business plan?

A

Think about the business plan as the answer to all the questions one might have about the prospective company. A business plan not only outlines a complete picture of the proposed company; it also addresses many different types of audiences through the information given.

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2
Q

What is creativity?

A

Creativity is the power to reject the past, to change the status quo, and to see new potential.

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3
Q

What are the three components of creative performance?

A

– Domain-relevant skills
– Creativity-relevant skills
– Task motivation.

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4
Q

Name four kinds of creativity:

A
  1. Mini-C (impact on yourself)
  2. Little-C (impact on other individuals)
  3. Pro-C professional (impact on organisations)
  4. Big-C creator (impact on society).
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5
Q

What is the difference between creativity vs innovation?

A
  • Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities
  • Innovation is the ability to apply creative solutions to problems and opportunities to enhance or enrich people’s lives
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6
Q

What is the best mood for creativity?

A

People in positive moods demonstrate divergent thinking, fluid ideation, flexible categorization, make unusual associations, and perform well on insights problems, unusual word associations and heuristic problem solving tasks”
“Negative moods are functional in that they alert us to shortfalls, cause us to focus on the current state of affairs rather than our pre-existing assumptions, and motivate to exert high levels of effort to improve matters”

Short answer: positive or negative mood, not in between.

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7
Q

How can managers nurture individual creativity?

A
  1. Motivate them to develop passion for the subject on which they are concentrating
  2. Give them full access to the knowledge domains (directly and indirectly) to their work
  3. Provide the time for them to immerse, even indulge themselves, in the issues
  4. Avoid personal uncertainty
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8
Q

How can you nurture team creativity?

A
  1. Match the right group of individuals with the right challenge
  2. Give teams autonomy and the means to meet the challenge they are given (but not the freedom to choose the challenge themselves)
  3. Vague or ill-defined problems are where discussion should start
  4. Project strategy needs to be developed in discussions with employees, as this helps them feel confident about the direction and ensures ‘buy-in’
  5. Make suitable resources available
  6. Build teams with diverse backgrounds and skills, share excitement in achieving goals, and a climate where contribution of all employees is recognised
  7. Ensure timely and appropriate supervisory encouragement
  8. Guarantee support from the rest of the organisation, particularly for innovation teams working under time pressure. Similarly, to protect teams from organisational politics is important

(Långt svar men vet ej hur jag ska förkorta det.)

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9
Q

What should you be aware of when building an innovative team?

A

– Group thinking (Too much homogeneity reduces performance, restricts interpretation and response, homogeneity limits innovation)

– Siege mentality (Too much heterogeneity can lead to conflicts, Group vs. organisational goals, Commitment to sub-unit vs. organisation )

– Means vs. ends (Type of task determines the importance of diversity, Attachment to social system, not course of action)

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10
Q

What are the differences between an idea and an opportunity?

A

– Ideas are not always possible to turn into opportunities

– For an idea to also be an opportunity, many different parameters need to be aligned

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11
Q

How can entrepreneurship be seen as innovation?

A

Entrepreneurs take risks, and gather capital and resources to turn ideas into innovations. They creatively combine and recombine existing knowledge and resources into novel products, services, business models, firms and markets.

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12
Q

What are the two approaches for doing entrepreneurship? (that we spoke of in the lecture)

A

Lean startup and effectuation.

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13
Q

What is the difference between causal thinking and effectual thinking?

A

Causal: What means do I need to get to the given goal?
Effectual: What different ends can I get from the given means that I have?

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14
Q

What is the lean start-up loop?

A

Build: Start by creating an MVP
Measure: 1. Measure results from MVP testing
Learn: Learn from the results of measuring

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15
Q

What is the purpose of the MVP in a lean start-up?

A

Purpose 1: Reduce wasted engineering hours (and wasted code)
Purpose 2: Get something into the hands of early interested people as soon as possible.

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16
Q

What are the steps of measure in lean start-up?

A
  1. Measure results from MVP testing, and collect feedback from customers
  2. Translate the collected data into actionable insights.
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17
Q

What are the steps of learning in lean start-up?

A
  1. Based on feedback fine-tune the MVP by adding, removing or tweaking certain features
  2. Decide on the need to pivot (not throw everything, keep some stuff of the product/products) or to preserver
  3. Formulate a new hypothesis about the problem/solution fit and go back to testing the product with customers
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18
Q

How can you generate startup ideas?

A
  1. Solve a problem you have yourself.
  2. Choose a market that you want to target, and find out what problems they have.
  3. Clone/teak what works elsewhere
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19
Q

What is a value proposition?

A

A value proposition is a short statement that clearly communicates the benefits that your potential client gets by using your product, service, or idea. A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you

Hence, a value proposition is a clear statement that:

  1. Explains how your product solves customers’ problems or improves their situation (relevancy)
  2. Delivers specific benefits (quantified value)
  3. Tells the ideal customer why they should buy from you and not from your competitors (unique differentiation).
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20
Q

What is a business model?

A

”stories that explain how enterprises work”, ”the organization’s core logic for creating value…. (BM) explains how it makes money.”

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21
Q

Which disadvantages do new firms suffer from?

A

Limited resources: • Financial • Technological • Human resources • Unsophisticated governance models • Fluid identities • Little power over other actors
Liability of Newness: • No track record • Low income, accumulated capital & High cost of capital • Inefficient scale of production & High administrative costs

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22
Q

What are the five stages of the five phases of growth model?

A
  1. Creativity
  2. Direction
  3. Delegation
  4. Coordination
  5. Collaboration
23
Q

What is common to do in the different stages of crisis for the five phases of growth model?

A
  1. Leadership
  2. Autonomy
  3. Control
  4. Red tape?
24
Q

What is the critique to the five phases of growth?

A
  • They build on assumptions that organizations pass through all the stages
  • These models only conform to a uniform path of growth in a deterministic way
  • “Thus, the models oversimplify the nature of the role of the entrepreneur or entrepreneurial team”
  • This is NOT a smooth journey
25
Q

Why do the 100th Startup have it easier than the first?

A

Externalities over time!
Human capital: Skilled individuals – Entrepreneurial role-models
Local resources: E.g., Including VC financing
Knowledge spillovers: Local networks – Suppliers & Customers

26
Q

What is the entrepreneurial function in the Economy? (Lerner, 2010)

A

– Identifying, exploring and creating opportunities
– Taking risk, act as intermediary & accept uncertainty
– Organizing & Creating new organizations
– Re-allocate & shift (Coordinate) resources
– Driver of inherently wasteful but restless capitalistic process of economic evolution

27
Q

What is small new (entrepreneurial) companies impact on the Economy?

A
  1. Create jobs!
    • Is Good for social mobility
    • However the jobs they create are less secure due to higher volatility and higher probabilities of firm dissolution
    • Offer their employees lower remuneration (ersättning) levels & less benefits
  2. Create satisfied employees
    • Employees in entrepreneurial firms are more satisfied with their jobs than employees in the control group of firms.
    • We can infer that entrepreneurs are more satisfied, mainly due to them having more interesting jobs and/or more autonomy.
28
Q

Small new (entrepreneurial) companies impact on innovation?

A

Generally invest less in innovation: A Downside!
• Generate fewer innovations. However the quality/radicalness/importance of their innovations may be higher?!
• The likelihood of turning innovations into sales is lower for entrepreneurs. However …sales from innovations in general are higher than for other firms??

29
Q

Small new (entrepreneurial) companies impact on productivity?

A

Low productivity: Another downside?
• Entrepreneurs, Small businesses have lower — or, at least, no higher values of labor productivity — than their counterparts.
• However, Entrepreneurs & small businesses contribute more than their counterparts to growth of value added and productivity increases

30
Q

What can the Government do to increase entrepreneurship?

A

Demand side:
Deregulation, Liberalization & Autonomy

Supply Side:
Science and technology development

Increase the amount of potential/nascent entrepreneurs:
– Holistic and cultural change initiative, such as in schools and Entrepreneurship educations
– Change Values & Norms about Entrepreneurship

Increase the amount of realized entrepreneurs:
– Target group activities (science & Engineering, Cultural sector),
– Lower barriers to establish ventures, Regulations
– Local start-up support; ecosystem. Connect, ALMI

Increase the survival and growth of new businesses:
– SME and Entrepreneurship regulations & rules, procurement,
– Availability of resources; Financing, labour laws
– Motivations: taxation policies, risk reward

31
Q

What is the downside of the government?

A
  • Regulations - imposed administrative burden for entrepreneurship
  • Taxes - Reduce incentives
  • Crowding out – reduces opportunities
  • Welfare state - reduce necessity driven Entrepreneurship by providing social insurances systems: a helping hand
32
Q

How can institutions: Law & Regulations affect entrepreneurship?

A

Support for Entrepreneurship:
- Reduces transaction cost and uncertainties
– Legitimizing Entrepreneurship (supporting given norms and laws, enforcement & power)
– Protection against expropriation, corruption, and theft

Hamper Entrepreneurship:
- Burden
– Restricts opportunities

33
Q

What can we learn from Troilo’s study?

A

Property rights
Protection from state appropriation, is linked to Growth of High tech entrepreneurship

Rule of law
– Protection from business partners, Matters more for High job growers than
for High Tech Entrepreneurs

Administrative bureaucracy
– Number of Produces to enforce contract is detrimental to both High Tech and Job growth
Entrepreneurship
– Number of days as well as number of procedures to start a firm is negatively correlated to both
High Tech and Job growth Entrepreneurship

34
Q

What can we learn from Aidis et al., 2012 study?

A

Conclusions: Large size of government is inversely related to entrepreneurial entry!
E.g. large government = low amount entrepreneurial entry (it is hard to start a business)

35
Q

What is the innovator’s dilemma?

A

We have so many ideas, but there is no place to take them.

As a business, good practices should include: Listening to customers, improving your products and seeking higher margins

36
Q

Name four innovation problem(s)?

A
  • The lamp post problem – How to search in unexpected places
  • The messenger problem – Dealing with the corporate immune system
  • The rewiring problem – Finding, forming, and performing in new networks
  • The balancing problem – Dealing with the rest of the organisation
37
Q

What is the dilemma zone?

A

When you have to choose between your current product and the new upcoming product.

38
Q

What’s the challenge with innovations?

A

– Not in line with the institutionalised practices of today
– Violates the existing system of thought and action
– Threatens with sunk costs
– Falls into a vacuum where no shared understandings exist

39
Q

Name the four strategies to achieve ambidexterity?

A

Structural separation - do it in different places, cities, countries etc.
Temporal separation - do it in different periods, first work with sustaining innovation and then radical or disruptive
Contextual ambidexterity - working on different projects with different departments
Domain separation - work with different things inside and outside the company

40
Q

What are the four corporate entrepreneurship models?

A

Model 1 - Opportunist: • Least formal • Pushed by opportunistic project leaders • Requires trusting organisation • Diverse management hierarchy

Model 2 - Enabler: • Dedicated resources • Existing entrepreneurial culture • Clear criteria, application guidelines, transparent decision making, recruitment and retention policies, active support from management • Personal development and executive engagement

Model 3 - Advocate: • Assigns ownership, but only modest allocated budget – Can get internal funding elsewhere on ad hoc basis • Evangelist • Provide assistance (workshops) • Best advocates are respected veterans

Model 4 - Producer: • Encourages cross-unit collaboration • Manage the process, but not the ideas • Run by senior leaders who manage the politics

41
Q

What are the better responses to the innovators problem? (Garvin & Levesque, 2006)

A

Trial and error:
• Learn from small samples, closely observed
• Use prototypes to test new ventures
• Track progress through non-financial measures
• Suspend judgement, but not indefinitely

Something old, something new:
• Change veterans’ thinking
• Develop some capabilities, but acquire others
• Share responsibility for operating decisions

Integrate with autonomy (självständig):
• Assign corporate and operating sponsors
• Establish criteria for handoffs
• Employ hybrid organizational forms

42
Q

How can you set up corporate entrepreneurship programmes? (Wolcott & Lippitz, 2007)

A
  • Point the way
  • Describe objectives
  • Neutralise naysayers
  • Select and support a corporate entrepreneurship model
  • Start with quick wins – Credibility
  • Evolve
43
Q

What are the three views of financial transactions?

A
  • Sales – Sales volumes, selling prices, the direct cost of production
  • Capital outlays – The spending on productive assets with a life of more than one year. Fixed assets (e.g., buildings, machinery, equipment). Investment spending (e.g., acquisitions)
  • Operating costs – Salaries, wages, stationary, telecommunications
44
Q

What are the three financial statements?

A
  • The balance sheet – A snapshot of your finances at one moment in time, for example right now. Shows the sum of what you have done in the past and where you are today
  • The income statement (P&L account) – Records financial flows relating to a specific period (e.g., month/quarter/year) – Flows: sales income less production costs and operating costs. Difference is net income – Transaction are recorded in the period they relate
  • The cash flow statement – Shows financial flows when they actually happen
45
Q

What are the 10 steps to a successful sales forecast?

A
  1. Describe the logic underlying the forecast
  2. Show any historical proofs for your methods
  3. Introduce any assumptions you have made
  4. Develop your forecast
  5. Explain how you have modified the forecast to take into account market/industry trends
  6. Show sales forecasts
  7. Show how you arrive at your cost of sales and therefore gross profit
  8. Include a summary table in-text and in the appendices
  9. Explain the key risks. Indicate alternative sales scenarios (very important!)
  10. Keep it simple
46
Q

What are the differences of funding with debt or Equity?

A

• Debt – repayable – And lenders usually lend to you only if you own more than you owe. That way, they know you can definitely pay it back.
• Equity – not repayable – Shareholders recover their capital in one of two ways:
1. Business goes under, shareholders take the final pickings after creditors have had their turn.
2. Selling their shares – They can get together and force majority decisions.

47
Q

What are the common VC investment criteria?

A
  • Specific industry sectors
  • Stage of a company (early-stage seed or later stage rounds with companies that have achieved meaningful revenues)
  • Geography (e.g., San Francisco/Silicon Valley, New York, etc.)
48
Q

What are the advantages and disadvantages of VC funding?

A

Advantages: • Knowledge • Active role in the management and growth of the company • Connections • No monthly payments
Disadvantages: • Loss of control • A lengthy process • A 3–7 year plan • Not suitable for non–growth oriented business

49
Q

Do you believe entrepreneurial opportunities are discovered or created? Justify your answer. (7pts)

A

Opportunities can take three different forms:

  1. Opportunity recognition - Matching know products with existing demand
  2. Opportunity discovery - Either knows supply and proceeds in search of an unknown demand, or from a known demand that motivates search for an unknown supply.
  3. Opportunity creation - Neither the supply, nor the demand, exists prior to the entrepreneurial action; instead, the entrepreneur participates in creating both
50
Q

What can affects ones abilities to regonize opportunities? Based on (Baron, 2006)

A
  • Prior knowledge
  • Active search
  • Alertness
  • Social networks
51
Q

What is the diffusion response to corporate entrepreneurship? And what is it’s problems? (Garvin & Levesque, 2006)

A

Everyone to innovate and maintain

Problems: 
Traditional business tends to dominate
– Old incentives still in place
– Resistance to change
– Fit
• Alternatively, leads to cowboy culture
52
Q

What is the centralizing response to corporate entrepreneurship? And what is it’s problems? (Garvin & Levesque, 2006)

A

Separate so as not to distract or interfere

Problems: 
New venture also not distracted
• Problems come with reintegration
– Differences magnified through isolation
– Power struggles
– Leads to spinoff or shutdown
53
Q

What are the nine parts of the business model canvas?

A
  1. Value proposition
  2. Customer segments
  3. Channels
  4. Customer relationship
  5. Key activities
  6. Key resources
  7. Key partners
  8. Revenue streams
  9. Cost structure

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