Deck 3: Framing and Testing the Business Model

Question 1

A business model provides a framework in which entrepreneurs can examine their business plans and explore alternative ways for their companies to function and grow profitably while building barriers to ward off competitors.

Answer 1

True

Question 2

Because a small company may not have the resources or time to gain a share of a new market before its products, services, or even business models have become obsolete, partnering with large companies may accelerate a small company's growth.

Answer 2

True

Question 3

Capturing data on customer requirements and using it to create unique services or products can be a powerful way of adding value and keeping out competitors.

Answer 3

True

Question 4

A business model based on information sharing can provide low barriers against competitors because the costs involved in integrating incompatible data and computer systems can be prohibitive.

Question 5

Unfortunately, licensing and franchising are not valuable components of a business model.

Question 6

Interestingly, some companies base their business models entirely on licensing and have no intention of producing or selling any product.

Question 7

An entrepreneur should not seek to be a franchisee or build a business as a franchisor without seeking competent legal advice.

Question 8

Due to the obvious benefits from partnerships between small innovative companies, such as larger corporations' resources, contacts, reputation, and other things, rarely do the relationships become tense as cultural issues become dominant.

Question 9

Building social networks into your business is a way of getting sales leads and new ideas for products or services from your customers

Question 10

Large companies that have a complementary product or service sold alongside a small company's product for mutual benefit is an example of corporate partnering.

Question 11

In applying the business model canvas for a service-based organization, physical assets to produce the product are going to be critical resources.

Question 12

The four steps in the MVP process in order are: identify minimum product features; define the essential customer experience; illustrate product's ability to solve the problem; and measure the validity of this MVP version.

Question 13

Small enterprises must be part of a supply chain, but large companies often undertake all the functions from start to finish that are required to deliver their end product.

Question 14

A(n) ________ provides a framework in which entrepreneurs can examine their business plans and explore alternative ways for their companies to function and grow profitably while building barriers to ward off competitors.

Question 15

_____________are the reasons the customer segment(s) will use your products or services instead of a competitor.

Question 16

A ______________ is that version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort.

Question 17

If you can enter the market and build your customer base before anyone else, you achieve ____________ in which it becomes harder and harder for competitors to get into the market and convince your customers to switch.

Question 18

Licensing and ________ refer to types of contracts between an issuing entity and a receiving entity.

Question 19

A(n) _________ license provides just one licensee the rights stated in the agreement.

Question 20

____________ are paid as a percentage of net sales of products or services.

Question 21

___________ may prevent a licensee from just sitting on the rights and not trying to generate sales.

Question 22

A(n) ____________ is a legal and commercial relationship between the owner of a trademark, service mark, trade name, or advertising symbol and an individual or group wishing to use that identification in a business.

Question 23

The _________ allows a franchisee to participate in building a business together with other franchisees, under the rules stipulated by the franchisor and under certain conditions spelled out in the agreement.

Question 24

Which of the following factors are not important when designing a business model?

A) Understanding customers' values
B) Having Venture Capital Investment
C) Analyzing current and potential customers
D) Clearly identifying the markets that you will enter.

Question 25

__________ are those non-customer relationships necessary to execute the business model.

A) Key activities
B) Revenue streams
C) Key partnerships
D) Key resources

Question 26

A_______________________ is the way a company applies knowledge to capture value.

A) business model
B) value proposition
C) channel
D) revenue stream

Question 27

It is recommended that the Business Model Canvas be used in _________ sessions.

A) Individual
B) Team
C) Small
D) Large

Question 28

When seeking a product market fit, an entrepreneur should:

A) Consider the customer's problem, the customer's challenges in resolving the problem, and the severity of the customer's pain points within the process.
B) Research the customer's current solution to the problem and identify what the customer may "gain" from a better solution.
C) Both a and b are parts of assessing product market fit.
D) Neither a or b relate to assessing product market fit.

Question 29

Which of the following is NOT a correct matching of business canvas model elements:

A) Channels - the means with which you communicate with your customer segment(s) to deliver your value proposition.
B) Revenue Stream - the physical, financial, intellectual or human assets needed to deliver your value proposition(s).
C) Key Activities - critical actions needed to execute your business model.
D) Cost Structure - the main costs incurred in order to execute your business model.

Question 30

Data lock-ins inhibiting a move to a competitor can be found in which of the following?

A) E-mail services
B) Banking
C) Health care services
D) All of these.

Question 31

The authors recommend that a small company restrict the number of licenses it issues to how many competitors?

A) Three or four
B) Five or six
C) Two or three
D) One or two

Question 32

Which of the following is the term used to describe the fee that may be paid to initiate the contract?

A) Running royalties
B) Minimums
C) Up-front
D) Advances

Question 33

_________may prevent a license from just sitting on the rights and not trying to generate sales.

A) Running royalties
B) Minimums
C) Up-front fees
D) Marketing

Question 34

Which is the best-known franchise organization?

A) Wendy's
B) Arby's
C) Chick-Fil-A
D) McDonald's

Question 35

The federal government has issued regulations that require franchisors to prepare an extensive disclosure document called _______.

A) UFCO
B) UFCC
C) UFOC
D) UFDC

Question 36

A franchise agreement need not have the following conditions stated:

A) Payments that must be made to the franchisor
B) The location where the franchisee may operate
C) Guidelines on using the franchisor's brand
D) The expiration date of the patent that is being franchised

Question 37

For a franchise agreement, the typical length of agreement for initial period is around:

A) 8 years
B) 9 years
C) 7 years
D) 10 years

Question 38

Limitations of franchise agreements include all of the following except:

A) Treatment of confidentiality
B) General legal requirements
C) Non-compete stipulation
D) Legal advice

Question 39

____________________is the ability to capture data on customer requirements and using it to create unique services or products can be a powerful way of adding value and keeping out competitors.

A) Collaborative filtering
B) Performance
C) First-movers advantage
D) Mining the long-tail

Question 40

If you can enter the market and build your data-base before anyone else, you achieve
_______________in which it becomes harder and harder for competitors to get into the market and convince your customers to switch.

A) non-compete stipulation.
B) first-movers advantage.
C) data mining.
D) mining the long tail

Question 41

A ________________________ is an approach to test a product's alignment with customer needs and expectations and collect the maximum amount of validated learning about customers with the least effort.

A) Revenue streams
B) "tinyUpdates" Business Model Canvas.
C) Minimum Viable Product
D) Customer segmentation

Question 42

______________________________ are reasons the customer segment(s) will use your products or services instead of those from a competitor.

A) Value propositions
B) Key partnerships
C) Channels
D) Communication

Question 43

Social networks are:

A) Club members.
B) Not-for-profit organizations.
C) Missionaries.
D) On-line communities sharing common interests

Question 44

We live in a global economy where changes occur ____________.

A) slowly
B) primarily within borders of economy
C) rapidly
D) only with governmental intervention only

Question 45

A large corporation can license rights to a small company's _____________.

A) intellectual property
B) running royalties
C) business profits
D) networks

Question 46

Which of the following is not one of the three steps process to build a MVP?

A) Define the essential customer experience that the product needs to create.
B) Decide on the best approach to illustrate the product's ability to solve the customer's problem.
C) Develop a social network.
D) Determine what measurements or metrics will be needed to validate the learning in this first MVP version.