Deck 6: Assessment of Entrepreneurial Opportunities

Question 1

The learn stage of the build-measure-learn feedback loop is a process in which one learns by trying out an initial idea and then measuring it to validate the effect.

Answer 1

False

Question 2

A new venture goes through five specific phases.

Answer 2

False

Question 3

Many entrepreneurs do not understand the marketing life cycle of a new product.

Answer 3

True

Question 4

Timing has little to do with a new venture's success or failure.

Question 5

Obtaining external financing is one of the major types of problems for a new venture during its first year.

Question 6

Most entrepreneurs hire lawyers to brief them on the legal issues surrounding a new venture.

Question 7

Lack of transparency and trust by the entrepreneur is a common cause of new-venture failure.

Question 8

An entrepreneur's decision to ignore the market is safe if he or she is sure that the idea will be a success.

Question 9

With a nonroutine venture, the initial innovation will maintain the company's competitive advantage without new technology.

Question 10

Design is now a hot topic in the business world.

Question 11

The Lean Start-Up methodology is hypothesis-driven.

Question 12

The build-measure-learn feedback loop begins with identifying which hypotheses to test and ends with requiring the entrepreneur to take a look at the results and determine whether a pivot is required.

Question 13

In design-centered entrepreneurship, the entrepreneur applies design methods in six action stages of developing an opportunity.

Question 14

The growth pattern of sales is critical for an entrepreneur to make correct forecasts.

Question 15

Pricing becomes less of a concern when customers know about a product's unique characteristics that are superior to the competition.

Question 16

Investors are willing to invest even if they do not immediately see the potential for growth and profit.

Question 17

Mistakes and failures along the way are to be seen as poor planning and actually hinder the design methodology.

Question 18

The maverick entrepreneur who avoids reaching out and finding help is a myth of the past.

Question 19

The entrepreneurial motivations of individuals relate to the entrepreneur, the environment, and the venture.

Question 20

The comprehensive feasibility analysis approach is closely related to the preparation of a thorough business plan.

Question 21

Rapid technological advances in many industries cause a concern for _____ in new venture development.

A)faulty product performance
B)rapid product obsolescence
C)inadequate awareness of competitive pressures
D)undercapitalization

Question 22

Which of the following is a tool that enables entrepreneurs to judge a business venture's potential?

A)profile analysis
B)market analysis
C)feasibility analysis
D)customer analysis

Question 23

Most entrepreneurs are objective when they evaluate their new idea.

Question 24

The three a's of metrics are

A)actionable, accessible, and auditable.
B)accessible, abundance, and audience.
C)accuracy, accountability, and auditable.
D)activity, actionable, and accessible.

Question 25

A common human resource problem is

A)poor relationships with parent companies and venture capitalists.
B)incompetent support professionals.
C)inflated owner ego.
D)incompetent workforce.

Question 26

Flexibility, reliability, and safety are all examples of

A)technical feasibility.
B)market feasibility.
C)assessment of the entrepreneurial profile.
D)a good product.

Question 27

Which of the following is not an entrepreneurial motivation for starting a venture?

A)environment
B)entrepreneur
C)venture
D)organization

Question 28

Failure to anticipate the technical difficulties related to developing or producing a product can sink a new venture.

Question 29

It is reported that more than 400,000 new firms have emerged in the United States every year since 2010.

Question 30

One study suggested four basic legitimation strategies available to new ventures: conformance, selection, manipulation, and

A)creation.
B)norming.
C)identification.
D)marketing.

Question 31

A product does not have to be patented in order to be introduced into the marketplace.

Question 32

Which of the following evaluation methods enables an entrepreneur to judge a business's potential?

A)entrepreneurial analysis method
B)venture analysis method
C)profile analysis
D)net out-of-pocket cost method

Question 33

Using the failure prediction model discussed in the chapter, the risk of failure can be reduced by using _____ in the initial stages.

A)less debt as initial financing and generating revenue
B)more debt as initial financing and generating less revenue
C)more revenue to enhance more debt
D)more cash as initial financing

Question 34

There are three types of design-centered entrepreneurship.

Question 35

Solid analysis and evaluation of the feasibility of the product/service idea are critical tasks in starting a new business.

Question 36

Surprisingly, growth of sales is generally not considered a critical factor in assessing new ventures.

Question 37

In a lifestyle venture, independence, autonomy, and control are the primary driving forces.

Question 38

"Intensity of competition" changes the dominance of problem areas.

Question 39

Customers and customer demand patterns relate to which of the following sources of the market feasibility analysis?

A)market data
B)competitive data
C)general economic trends
D)pricing data

Question 40

A great abundance of reliable data is available concerning the start-up, performance, and failure of new ventures.

Question 41

Many entrepreneurs lack _____ for their new venture.

A)innovation
B)intelligence
C)objectivity
D)foresight

Question 42

Lack of finished product availability can affect

A)the company's image.
B)recalls.
C)marketing efforts.
D)costs.

Question 43

A(n) _____ approach to problem-solving includes soliciting feedback from the target audience early and often and is encouraged under design thinking.

A)iterative
B)financial
C)market
D)lean

Question 44

Venture classifications include which of the following types of venture?

A)hobby ventures
B)smaller copycat ventures
C)high-growth ventures
D)survival ventures

Question 45

A solid analysis is

A)a critical task in starting a new business.
B)of no importance.
C)no way to discover flaws in a new-venture idea.
D)not a critical task in starting a new business.

Question 46

In shaping the ultimate success or failure of a new venture, which of the following statements is most applicable?

A)A single strategic variable is usually responsible.
B)A single strategic variable is seldom responsible.
C)A single strategic variable that frequently changes is responsible.
D)A single strategic variable that influences the entire outcome is responsible.

Question 47

Hiring and promotions on the basis of nepotism rather than qualification are associated with

A)human resource problems.
B)the concept of a team approach.
C)unclear business definition.
D)poor management.

Question 48

An approach developed as a criteria selection list from which entrepreneurs can gain insights into the viability of their venture is the _____ approach.

A)feasibility criteria
B)time-essence of a venture
C)marketability feasibility
D)comprehensive feasibility

Question 49

In determining the potential market, one should look _____ into the future.

A)one year
B)three to five years
C)ten years
D)three months

Question 50

Independence, autonomy, and _____ are the major driving forces behind lifestyle ventures.

A)marketing
B)capitalists
C)control
D)people

Question 51

Researchers have described a "fully developed new firm" with a number of characteristics, including

A)full-time commitment.
B)informal financial support.
C)minimal hiring.
D)plans to hire one or more individuals.

Question 52

"There is no replacement for passion," is a statement associated with which of the following?

A)visualizing your success
B)getting educated
C)evaluating your beliefs
D)doing what you love

Question 53

Which of the following pitfalls is described by the statement, "Engineers and technically trained people are particularly prone to falling in love with an idea for a product or service"?

A)inadequate understanding of technical requirements
B)lack of venture uniqueness
C)no real insight into the market
D)lack of objective evaluation

Question 54

Which of the following is a critical consideration when assessing customer availability?

A)amount of products sold
B)length of time needed to determine who the customers are, as well as their buying habits
C)the exact profitability of the venture
D)how customers will obtain the product

Question 55

A checklist approach allows the entrepreneur to identify _____ factors of a new venture.

A)financial
B)business
C)personnel
D)critical

Question 56

During the prestart-up and start-up phases, _____ factors are critical.

A)five
B)two
C)three
D)seven

Question 57

Financial considerations play a major role in

A)lifestyle ventures.
B)small profitable ventures.
C)high-growth ventures.
D)corporate debentures.

Question 58

A common pitfall in selecting a new venture is

A)poor financial understanding.
B)proper objective evaluation.
C)real insight into the market.
D)having a good idea.

Question 59

Problems associated with the managerial team include

A)being high-risk takers.
B)poor relationships with parent companies.
C)verbal agreements made to venture capitalists.
D)filing lawsuits.

Question 60

The type of venture that is expected to attract venture capital would most likely be a _____ venture.

A)corporate
B)high-growth
C)lifestyle
D)smaller

Question 61

The results of a profile analysis enable the entrepreneur to judge

A)himself or herself.
B)the competition.
C)the business potential.
D)venture capital opportunities.

Question 62

Which of the following is not critical to a product's success?

A)timing
B)marketing approach
C)objectivity
D)size

Question 63

Timing is especially critical in

A)the new-venture profitability method.
B)marketing.
C)accounting.
D)the economy.

Question 64

What five specific feasibility phases will a new venture go through?

Question 65

Market feasibility analysis relies on

A)organizational competence.
B)the entrepreneur's vision.
C)venture capital.
D)general economic trends and competitor data.

Question 66

When a customer sees a product that is superior to its competitors, _____ becomes less important.

A)size
B)color
C)quantity
D)price

Question 67

Which of the following is a key question to ask when performing a feasibility criteria approach?

A)Is it proprietary?
B)Can it easily make money?
C)What are its points of discussion?
D)Do we have any potential customers?

Question 68

One of the external problems new ventures face is

A)vandalism.
B)poor labor force.
C)government regulations.
D)market knowledge.

Question 69

General sources for a market feasibility analysis include

A)reliability studies.
B)statistical analyses.
C)pricing data.
D)supplier data.

Question 70

Many entrepreneurs of new ventures lack

A)knowledge of their product.
B)a unique angle for the venture.
C)drive.
D)the willingness to put in long hours.

Question 71

When premature entry into the marketplace causes the failure of a new venture, it can be termed

A)poor timing.
B)undercapitalization.
C)a design problem.
D)a distribution problem.

Question 72

A new venture should be

A)cheap.
B)unique.
C)easy to copy.
D)inferior to its competitors.

Question 73

During the prestart-up and start-up phases of a new venture, which of the following is not considered one of the crucial factors for success?

A)uniqueness of venture and price
B)expected growth and price
C)availability of products
D)price and timing

Question 74

Under design-centered entrepreneurship, moving from one particular action stage back to a previous stage for further development is a _____ methodology.

A)microiterations
B)macroiterations
C)lean
D)problem-framing

Question 75

Sales growth is a critical factor in the _____ phase.

A)prestart-up
B)poststart-up
C)start-up
D)evaluations

Question 76

Managerial problems include

A)venture capital relationship problems.
B)unclear business definition.
C)concept of a team approach.
D)assuming debt too early.

Question 77

Researchers believe that design methodology provides _____ learning mechanisms important for converting ideas into form.

A)specific
B)organizational
C)vague
D)a framework of

Question 78

Three specific phases that a new venture goes through are

A)prestart-up, start-up, and poststart-up.
B)start-up, poststart-up, and evaluation.
C)beginning start-up, start-up, and ending start-up.
D)prestart-up, start-up, and evaluation.

Question 79

Product/market problems involve

A)assuming debt too early.
B)unclear business definition.
C)venture capital relationship problems.
D)initial undercapitalization.

Question 80

Which of the following is a factor contributing to new-venture failure?

A)product/market problems
B)family issues
C)personality clashes
D)good management/poor product