Question 1

Circle the equation that is true most firms with a profitable customer base:

Accepted Answer

In most firms with a profitable customer base, the customer acquisition costs are expected to be lower than the customer lifetime value (CLV) which is equivalent to the net present value (NPV) of future customer profits. This is because the profitability of the customer base is dependent on their lifetime value and the costs incurred in acquiring them. Therefore, the equation A) represents a financially viable scenario for most firms.

Question 2

____________________ refers to the amount of money a firm spends to convince a customer to buy (or in the case of free products, try or use) a product or service.

Accepted Answer

Customer acquisition costs

Question 3

Determining product/market fit is often very expensive for entrepreneurs, since it amounts, essentially, to fully building out a firm's website and operational model.

Accepted Answer

Determining product/market fit may require some investment, but it does not necessarily require fully building out a firm's website and operational model. It can involve market research, customer feedback, and testing with a minimum viable product.

Question 4

Describe why Rent the Runway's customers have an especially strong lifetime customer value?

Accepted Answer

The answer of Describe why Rent the Runway's customers have...

Question 5

Which of the following is not a reason why Rent the Runway appeals to designers?

Accepted Answer

All of the given options convey the appeal of Rent the Runway to designers, therefore none of them is not a reason why it appeals to designers.

Question 6

Rent the Runway shut down its Facebook presence because photos showing a dress on another (non-model) customer resulted in a dramatically lower than average rental percentage.

Accepted Answer

There is no evidence to suggest that Rent the Runway shut down its Facebook presence due to photos of non-model customers wearing dresses resulting in lower rental percentages. In fact, Rent the Runway still has an active Facebook page as of September 2021.

Question 7

Which of the following is NOT true about mobile app development:

Accepted Answer

Mobile app development requires technical skills such as programming and design, and cannot be created solely through drag-and-drop tools. Therefore, option C is not true. Options A, B, and D are all true about mobile app development.

Question 8

Describe the experiments Rent the Runway's founders conducted to verify their idea even before building out their website and operations model.

Accepted Answer

The answer of Describe the experiments Rent the Runway's founders...

Question 9

The term _______________________ is often used in entrepreneurship and new product development and refers to a bare-bones offering that allows entrepreneurs and product developers to collect customer feedback and to validate concepts and assumptions that underlie a business idea.

Accepted Answer

The answer of The term _______________________ is often used in...

Question 10

Essay: How does the Rent the Runway model compare with firms like Uber and Spotify?

Accepted Answer

The answer of Essay: How does the Rent the Runway...

Question 11

Describe why CLV is especially difficult for new firms with new models to calculate.

Accepted Answer

The answer of Describe why CLV is especially difficult for...

Question 12

The term ______________________ conveys the degree to which a product satisfies market demand. Successful efforts should be desired by customers, and scale into large, profitable businesses.

Accepted Answer

The answer of The term ______________________ conveys the degree to...

Question 13

Creating a business often involves convincing suppliers to participate in your new offering. While Rent the Runway had proven customer interesting, some designers had initial concerns about Jenn Hyman and Jenny Fleiss's firm. Briefly describe supplier concern.

Accepted Answer

The answer of Creating a business often involves convincing suppliers...

Question 14

The term __________________ refers to the rate at which consumers leave a product or service.

Accepted Answer

The answer of The term __________________ refers to the rate...

Question 15

Which of the following did not help create demand for Rent the Runway?

Accepted Answer

Flash sales sites were not a factor in creating demand for Rent the Runway.

Question 16

Rent the Runway sees a much higher (75 percent) conversion rate from friend referrals than from other marketing methods

Accepted Answer

According to Rent the Runway, they see a much higher conversion rate of 75 percent from friend referrals compared to other marketing methods.

Question 17

________________________ refers to the value of future cash flows discounted into today's dollars (it is discounted because a dollar today should be worth more in the future assuming inflation or the potential to earn money on the dollar if it is invested).

Accepted Answer

The answer of ________________________ refers to the value of future...

Question 18

The halo-effect from a positive experience renting a designer's more daring dresses may prompt a woman to purchase more frequently-worn staples like a little black cocktail dress, leather leggings, or accessories.

Accepted Answer

The answer of The halo-effect from a positive experience renting...

Question 19

The term ________________________ refers to the current value of future profits that will accrue from acquired customers.

Accepted Answer

The answer of The term ________________________ refers to the current...

Question 20

Several have wondered how big sharing firms can get. Airbnb has more beds than any hotel chain and Uber dwarfs any taxi or car service firm, but ZipCar never grew as large as major car rental firms. To get a sense of the size of the firm, Rent the Runway has had over 5 million women as customers of their service.

Accepted Answer

The statement is true, according to the given information.

Quiz 12: Rent the Runway: Entrepreneurs Expanding an Industry by Blending Tech With Fashion, John Gallaugher - Information Systems: a Managers Guide to Harnessing Technology, Version 40