Quiz 6: Assessment of Entrepreneurial Opportunities

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

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

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

The Lean Start-Up methodology is hypothesis-driven.

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

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

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

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.

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

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

A new venture goes through five specific phases.

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.

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

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

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

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

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

Design is now a hot topic in the business world.

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

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

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

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

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

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

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

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

Most entrepreneurs are objective when they evaluate their new idea.

There are three types of design-centered entrepreneurship.

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

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

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

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

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.

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.

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

Which of the following is not an entrepreneurial motivation for starting a venture? A)environment B)entrepreneur C)venture D)organization

Flexibility, reliability, and safety are all examples of A)technical feasibility. B)market feasibility. C)assessment of the entrepreneurial profile. D)a good product.

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

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

One study suggested four basic legitimation strategies available to new ventures: conformance, selection, manipulation, and A)creation. B)norming. C)identification. D)marketing.

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

A checklist approach allows the entrepreneur to identify _____ factors of a new venture. A)financial B)business C)personnel D)critical

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.

"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

Venture classifications include which of the following types of venture? A)hobby ventures B)smaller copycat ventures C)high-growth ventures D)survival ventures

During the prestart-up and start-up phases, _____ factors are critical. A)five B)two C)three D)seven

Independence, autonomy, and _____ are the major driving forces behind lifestyle ventures. A)marketing B)capitalists C)control D)people

Lack of finished product availability can affect A)the company's image. B)recalls. C)marketing efforts. D)costs.

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

Financial considerations play a major role in A)lifestyle ventures. B)small profitable ventures. C)high-growth ventures. D)corporate debentures.

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

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.

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.

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

Many entrepreneurs lack _____ for their new venture. A)innovation B)intelligence C)objectivity D)foresight

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.

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.

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

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.

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

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?

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

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

One of the external problems new ventures face is A)vandalism. B)poor labor force. C)government regulations. D)market knowledge.

General sources for a market feasibility analysis include A)reliability studies. B)statistical analyses. C)pricing data. D)supplier data.

Researchers believe that design methodology provides _____ learning mechanisms important for converting ideas into form. A)specific B)organizational C)vague D)a framework of

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.

When a customer sees a product that is superior to its competitors, _____ becomes less important. A)size B)color C)quantity D)price

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.

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

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.

Sales growth is a critical factor in the _____ phase. A)prestart-up B)poststart-up C)start-up D)evaluations

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

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

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

A new venture should be A)cheap. B)unique. C)easy to copy. D)inferior to its competitors.

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.

Which of the following is not critical to a product's success? A)timing B)marketing approach C)objectivity D)size

Timing is especially critical in A)the new-venture profitability method. B)marketing. C)accounting. D)the economy.

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

What are the two types of design-centered entrepreneurship?

What types of legal issues should not be overlooked when assessing an entrepreneurial opportunity?

Explain three major reasons why new ventures fail.

List and describe three pitfalls in selecting a new venture.

Define and describe Lean Start-Up methodology.