Deck 5: Defining the Business Model for a Venture

Question 1

What is an exit valuation?

A) Value of the business at the time of exit, IPO or acquisition
B) Value of the business after your 5 year projections
C) The industry average value of companies in your industry of the same age
D) The amount of money investors are willing to invest

Answer 1

A

Question 2

What is perhaps one of the most worthy goals of a business?

A) Making money over the long-haul
B) Giving away products and services at a cheap price to make a quick buck
C) Seeking profitability on the very first sale
D) None of the above

Answer 2

C

Question 3

The design of a business model allows the entrepreneur to establish certain critical business goals for the new venture. Which is an example of such?

A) The time to first dollar
B) Revenue for a scaled-up business
C) Exit valuation
D) All the above are examples

Answer 3

D

Question 4

What does a business model describe?

A) How competitors in a market sell their products
B) How a venture plans to make money
C) How investors plan to make their money
D) How an industry makes money

Question 5

What should your channel option include if your customer requires a lot of information to make a purchase?

A) A direct sales force to speak about advantages
B) Online
C) Catalog
D) Door-to-door salespeople

Question 6

The time it takes to complete the development of the product or service to bring it to the market is referred to as the ________________.

A) time to first dollar
B) cash conversion cycle
C) venture concept
D) business model

Question 7

If a venture activity does not involve a core competency, then you should consider

A) growing the competency.
B) outsourcing the competency.
C) deleting the competency.
D) None of the above.

Question 8

What type of revenue should be a primary goal when developing a business model?

A) Initial revenue
B) Fast revenue
C) Recurrent revenue
D) Any revenue

Question 9

What is perhaps the best way for entrepreneurs to break into entrenched markets?

A) Be the low cost provider
B) Use business model innovation
C) Go head-to-head with the market leader
D) None of the above

Question 10

If you want to sell a premium product to a selected few buyers, which price/volume structure are you following?

A) High price/moderate margin/low volume
B) Low price/high margin/low volume
C) High price/low margin/high volume
D) High price/high margin/low volume

Question 11

The best example of a Business model innovation is a ______________.

A) change to the traditional way of making money
B) change to the way you produce
C) change to the way you distribute your product
D) change to the way you package your product

Question 12

Which of the following is NOT an example of a business model approach for a new venture?

A) Manufacturing
B) Creating services
C) Licensing
D) All the above are examples of approaches to business modeling

Question 13

Which of the following best describes a go-to-market approach?

A) How a new venture uses R&D
B) A new venture's plan to engage and deliver products and services to customers
C) Quantity of product to be produced
D) All of the above

Question 14

With regard to the launch phase of a new venture, which is the landmark moment for the venture?

A) Having the venture team in place
B) Securing the venture funding
C) The first sale
D) None of the above would be a landmark moment

Question 15

Which of the following statements is true about outsourcing production/manufacturing and new ventures?

A) The use of third-party manufacturers is commonplace
B) Outsourcing production/manufacturing saves significant capital for the venture
C) The third-party contractor gains access to the intellectual capital of the new venture
D) All the above are true

Question 16

Which of the following statement is true?

A) Revenue is not necessarily cash
B) Cash and revenue are actually the same thing
C) Revenue is what you have in the bank
D) Cash is non-taxable and revenue is not

Question 17

Which is an example of a business model innovation?

A) Repositioning products as services
B) Eliminating traditional channels and going direct to customers
C) Designing a win-win solution with the customer
D) All the above are examples of business model innovation

Question 18

What is the essential component in a new venture's go-to-market approach?

A) Its distribution channel
B) Its perceptual mapping
C) Its ecosystem mapping
D) Its R&D

Question 19

Which of the following is a key element of a business model?

A) The structure and nature of revenues
B) The venture's approach to R&D
C) The approach to production and/or fulfillment
D) All of the above

Question 20

Which of the following is true about a business model?

A) It only involves your go-to-market strategy
B) It is less important than your financial strategy
C) It drives financial strategies and outcomes
D) It is driven by financial models

Question 21

Go-to-market covers

A) How consumers get to the place they purchase
B) A ventures decisions on channels and building awareness
C) A companies logistics
D) Who the company uses to ship their products

Question 22

Which of the following is not a component of a venture's business model

A) R&D Model
B) Approach to production and fulfillment
C) Customer Profile
D) Go-to-Market

Question 23

Which is not true about business models for ventures:

A) As important for venture success as the products or services of the company
B) Can be a source of innovative thinking, just as much of the product or service
C) It usually best for venture success to give away a service for free, convince users that it is worthwhile, and then ask them to pay for it later.
D) Can be hard to convince customers to adopt if it is very different than traditional methods of pricing

Question 24

What is the business model for other companies that already exist in your target industry? What might be a way to "spice" up that business model, such as offering follow-on products or services or ways to share cost-savings or other benefits with customers?

Question 25

What are the differences between the revenue aspects of a business model and the operational aspects of the business model? How do these apply for your term project venture?

Question 26

Customer loyalty programs, special pricing for product/service upgrades are examples of how companies can:

A) Create Recurring Revenue
B) Create Differentiation From
C) Create a Go-to-Market strategy
D) Create a Primary Revenue Stream

Question 27

Give two examples of recurring revenue in a business model for a successful product-making company and services company respectively. How is the recurring revenue structured in each case?

Question 28

The MyMMs example in the chapter is NOT a good illustration of:

A) Premiumization: selling a traditional product for more money
B) Services innovation: figuring out how to sell a product as a service
C) Personalization: customizing a mass product for individual consumers
D) Disruptive technology: inventing an entirely new printing technology