COMM 280 Key Concept Test PDF

Class 1 + 2 Entrepreneurship is the pursuit of opportunity beyond resources controlled - Pursuit = singular focus and urgency - Opportunity = novel, new and innovative - Resources = limited, bootstrapped, risk-taking Demand Risk - Prospective customer’s willingness to adopt the solution...

Class 1 + 2 Entrepreneurship is the pursuit of opportunity beyond resources controlled - Pursuit = singular focus and urgency - Opportunity = novel, new and innovative - Resources = limited, bootstrapped, risk-taking Demand Risk - Prospective customer’s willingness to adopt the solution envisioned by the entrepreneur Technology Risk - When engineering or scientific breakthroughs are required to bring a solution to fruition Execution Risk - One’s ability to attract employees and partners who can implement the venture’s plans Financing Risk - Whether external capital will be available on reason terms The entrepreneur’s job is to navigate and manage uncertainty, while recognizing that certain risks exist and may not influenced by their actions. Entrepreneurship: Types Solopreneur: An individual who sets up and manages their own business without partners. A solopreneur is sole owner and leader-employee of their business. They are responsible for organizing, managing, and assuming the risks of their enterprise, without the help of a partner. Corporate Entrepreneur: A person who works on developing new ideas and/or launching innovation projects inside an existing organization. Serial Entrepreneur: An individual who start several businesses one after another than than beginning one venture and staying focused on it for many years. Social Entrepreneur: An entrepreneur who seeks to solve societal problems and make the world a better place. They seek to generate impact over big profits or wealth. They start non-profits or social ventures dedicated to social good. Entrepreneurship: Key Discovery Skills Associating: draw connections between questions, problems or ideas from unrelated fields -> draw connections from unrelated fields Questioning: ask courageous questions, consciously and often. Push through your thoughts and challenge the status quo -> ask courageous questions Observing: look at the behaviour of customers, suppliers, and competitors to identify new ways of doing things -> look at behaviours for doing new things Experimenting: construct interactive experiences and provoke unorthodox responses to see what new insights emerge -> lead experiments to discover Networking: meeting people with different ideas and perspectives. Together, question the status quo, test ideas and spot trends -> meet people with different ideas Class 3 Innovator Type Explorer: First adopter, initiate change, curious and open to new ideas/technologies, inventor entrepreneur motivated by adventure and curiosity to discover new ideas Promoter: Early adopter, influence change and others to try new ideas, passionate and persuasive, trendsetter entrepreneur motivated by novelty and status to share their opinions and experiences of new ideas or technologies. Manager: Early majority adopter, follows change agents, seek practical benefits of new technologies, pragmatic entrepreneur motivated by continuous improvements to try and buy new products/services that are useful Implementer: Late majority adopter, follows others to change, seeks utility in new ideas and technologies, efficient entrepreneur motivated by a sense of belonging to new products that are necessary or required Protector: Last adopter, forced to change, early status quo, concerned with logistics, reluctant entrepreneur motivated by tradition to enforce established rules and voice concerns of reliability & viability Opportunity Recognition: is the process of identifying and evaluating potential business opportunities that arise from changes in the market, technology, society, or environment. It is a crucial skill for entrepreneurs who want to create value, solve problems, and explore new possibilities. It helps to: - Discover unmet, underserved customer needs & preferences - Find innovative ways to improve existing products or services - Develop new markets or niches for existing products or services - Create competitive advantages or differentiation from rivals - Anticipate and respond to emerging trends or disruptions Class 4 Buiness model canvas: - The business model canvas is a visual thinking tool to map out the nine building blocks of a startup or company - Each block reflects one element of a business and offers questions for you to generate hypotheses - Originally used as an operations diagnostic tool, it was redesigned as a business model building and testing tool (educational tool)  - A business model tells the story of how a company creates both customer and shareholder value - A business model canvas guides a team to design and test a future company that creates both customer and shareholder value - A successful business model should have all of the following: desirable, feasible and viable - Value proposition = Customer Value/Benefit Crowdfunding: - Crowdfunding platforms are a popular way for Startups to get the funding (and early market testing) they need to launch and grow the ventures, as an alternative to traditional funding avenues Class 5 Class 6 Entrepreneurship and innovation is a team sport that requires diverse mindsets and skills 6 steps to building a great team: 1. Identify and understand individual strengths, styles and roles 2. Define team values and norms: How do you want to interact? What values are most important? 3. Build trust through open conversations 4. Create a collaborative process 5. Set team goals and action plans 6. Address and solve team conflicts Networking for ideas 1. Explore problem spaces and potential solution areas 2. Talk with others to get their different perspectives 3. Listen to diverse cultural and demographic orientations 4. Find and frame issues in new ways 5. Explore solutions from different sectors 6. Associate your problem to a new discipline or domain SWOT is an organizational analysis framework (Strengths, Weaknesses, Opportunities, Threats) applied to project teams or groups. It aims to facilitate a dialogue and enables curiosity, understanding and empathy for others. Founding teams are comprised of people with diverse mindsets - all aligned toward a goal. Class 7 Value Proposition is a statement that summarizes how your product/service serves a customer need and why they will choose yours. It communicates clear benefits that customers receive from your venture. Value Proposition Hypothesis: a statement that assumes why a customer needs or wants your product/service: it describes the intended consumer benefits of your product and company A personal value proposition describes what you have to offer your team (as a new venture) that is unique and fulfills a need. Ex. I am goal-oriented and thrive on change. I offer an international POV, and love doing research A business value proposition describes the company’s offer to a customer that is deemed valuable and uniquely fulfills a need. Ex. ByteDance “Inspire Creativity and Enrich Life. We make it easy and fun for people to connect with, create and consume content.” Painstorming is a process of uncovering pain points to create bigger and better ideas. P - Persona (who is the target) A - Activities (what do they do) I - Insights (what do they hate or love) N - Needs (why and which priority) Flip the notion of ‘generating ideas as solutions’ to generating ideas (and hypotheses) on user needs. Brainstorming = generating ideas that solve customer needs/problems (solutions) Painstorming = generating ideas on consumer needs (problems to solve) prior to solutions Class 8 Methods (Primary Research): - Surveys (common) - Interviews (insightful) - Focus groups (dangerous) - Observation (powerful) Techniques: - Personas - Flow models - Affinity diagrams  - Customer Journey Maps Class 9 Desk Research (aka secondary research) is a method that involves using existing data. It allows you to get a glimpse of your market and potential users “from your desk.” Secondary research searches and scans published materials in reports, articles, or similar documents. It is more cost-efficient than primary research and will require less time to conduct it. However, will only give you one POV or silver of information to analyze. Combined with primary and qualitative user research it will offer insight into your customer segment’s needs. Petal Diagram: A petal diagram places your new venture or product in a center circle, and then surrounds it with petals, each one containing competitors in a distinct category adjacent to the company. It enables you to map a broader picture of the competitive landscape of how your product fits into a category/segment. - Application: Use it to articulate and/or test your first hypotheses of target customer segments. Class 10 Business Model: A Business Model tells the story of how a Startup aims to design a new product/service that will benefit customers and as a result, benefit shareholders. Business Model Innovation: Business Model Innovation is the process in which a former Startup (organization) adjusts its business model in response to market forces (need and/or new technologies) that create new value for customers = new revenue streams or distribution channels. Class 11 Marketing for entrepreneurs - Marketing involves identifying and acquiring customers, and creating products/services that meet their needs, at a price they are willing to pay, and in places where they are willing to buy them. - Marketing is vital for entrepreneurs who create the offer (design the product and set the price), take the offer to the market (through distribution), and tell the market about their offer (communication) Customer Discovery Basics 1. Customer discovery starts with understanding customers’ pain points (unmet needs) 2. Defining and prioritizing customer personas (archetypes) 3. Interviewing is a critical aspect of discovery (listen and learn about needs and goals) 4. Low-fidelity testing to gain additional insight (into the problem and proposed idea) 5. Journey mapping lays out the entire process and helps turn discovery into action. Get to know your customers - Given the changing business landscape and market needs, it is critical to (re)evaluate how well you know your customers, who they are, what they need and their goals. - Develop your ICP (ideal customer profile = persona) - Where are they located? (customer channels) - Where do they work, shop, hang out? (relationships) - How do they connect with friends? - Focus on a target vs wasting time and money - What are your target customers’ goals? Or functional, social or emotional needs - Invest in customer interviews: to discovery the “why” behind the goals and needs Focus on Market Fit: In Customer Discovery, you (as founder) take on the role of a scientist or detective, seeking evidence that will lead you to a solution without bias - It involves a process that closely follows the traditional scientific method: - Observing and defining a phenomenon (problem or market need) - Developing a hypothesis about a solution to the problem (new venture idea) - Conducting an experiment to test the hypothesis (getting “out of the building”) The difference is testing multiple hypotheses: first, apply the process to ‘problem/need hypothesis’; second apply to potential solution ideas as ‘solution hypotheses’; third, applying research findings (need + solution) to your value proposition statement. Empathy Interview: - To speak (listen, observe and record) with one person about a specific experience (service or product) - Use open-ened questions to elicit stories - Aim: uncover unacknowledged needs Observational Research: - To study (observe and record) people and their behaviour in a natural context - Use your eyes, notepad, smart phone to collect observations - Aim: observe unarticulated needs Class 12 Market Segment: a broad consumer or business market, consisting of existing and potential customers grouped by similar characteristcs (demographics-led). - Large Sample Size - Goal forecasting trends/demand - Total Addressable Market (TAM) Target population: a highly targeted consumer profile, consisting of end users as potential customers defined similar characteristics, motivations and needs (phychographics-led) - Small sample size - Goal: understand needs + motivations - Serviceable Obtainable Market (SAM) Market segmentation is the process of dividing a large population into groups that share common characteristics. A target market is a specific population companies want to reach their products or services. Demographics: statistical data collected for a particular population (segment) - Age - Gender - Occupation - Geography - Income Quantitive Data ^ Psychographics: information about a particular population’s attitudes & aspirations - Characteristics - Social status - Habits - Spending behaviour - Brand affiliations Qualitative Data ^ How to create customer personas - Personas build empathy for your target consumer - They highlight behavioural drivers (needs and goals) - They surface obstacles to purchase (customer hesitations and concerns) - They reflect customers’ prior experiences, expectations and preconceived notions (product and brand affiliations). Personas vs Characters Personas: are archetypes crafted from research data and analysis Characters: are fictional profiles to suit a story, created from the imagination Value of Customer Personas - Value is derived from visualizing a “real person” behind the persona and sensing their POV toward a product - They require both qualitative and quantitative research to model personas out of data, not intuition - Must reflect real motivations, desires, and concerns - Keep customers at the centre of decision making process\ Customer-Centred Product Design - Customers have opinions -> ShakeShack listened to their customers’ feedback when designing their quick-service restaurant, fresh burgers and service experience - resulting in loyalty and sales. - Customers have strong preferences -> Thrive Market offers their customers a subscription service to health and wellness products wherever they are. - Customers want to be heard and understood -> Kimberly-Clark offered parents diapers that connected to the emotional journey of toddlers - Huggies reflected an empathic brand creating products centred around customers - Customers demand personalized experiences -> Beats by Dre created sleek and modern headphones with high-quality audio that made customers feel like they were in a recording studio. Class 13 Class 14 Customer Relationships: are the interactions and connections between a company (new venture) and the people targeted to use and/or buy its products or services (aka potential customers). Customer relationships take various forms (ranging from personal to automated digital interactions) and are crucial for Startups to define the type of relationship they want to establish with their customers. Customer relationships directly inform the MVP and final product by determining the type and level of engagement and strategies (product, marketing and financial) to employ to nurture these relationships. 12 types of Customer Relationships Transactional: minimal interaction, focused on purchasing Automated: minimal human interaction, focused on algorithms Self-Service: independent use of services, focused on self-control Personal Assistance: full service, focused on personalized support Co-creation: engage customers in on-going product development process Community: focused on offering a sense of belonging and support Fans: exclusive relationship with other customers, focused on advocacy Long-term: ongoing interaction with customers, focused on extensions Switching Costs: forcing customers into loyalty through pricing Direct: engaging directly with customers without a middle person or partner Indirect: engaging indirectly with customers through a partner (e.g. retailer) Lock-in: legal or binding relation to secure customer over a set term From Segments to Customer Personas Market Segment: A broad subset of a market, based on shared characteristics, such as demographics or psychographics Target customer Segment: A specific group within the market segment that a company chooses to focus on and serve Customer/ Buyer Persona: A detailed representation of an ideal customer within the target segment. Create 2-3 based on segments Class 15 The Lemonade Stand + BMC - What is your value proposition? (Customer Benefits) - Refreshing and affordable drink on a hot day - Homemade drink crafted from natural ingredients - Who are your customers? (Customer Segments) - Kids and parents at a park; Health-conscious neighbours - How do you attract customers? (Channels)  - Bright signs and a stand at the playground - Facebook or Instagram post - What do you need to make your lemonade? (Key Resources) - Lemond, sugar and cup; extra flavours like mint or berries - Pitchers, ice coolers, mixing and serving tables, etc. A business model describes the logic of how a company creates, delivers and captures value. - Value Proposition: Customer Benefits - Key Customers: target customer segments - Key Resources: people, money and technology - Key Activities and Processes: covert resources into products/services - Profit Formula: assets, costs and margins = ROI (return on investment) Kev Activities are the critical things that you need to do to deliver your value proposition to your target customers. - How will you design and build your product and service? - How will you distribute your product and service? - Which activities are important to create and maintain customer relationships? - Which activities are fundamental to your revenue streams? Key Resources in the BMC (Business Model Canvas) - Key resources are the critical inputs and assets the business needs to functoin effectively - Physical resources (place, space and equipment) - Human resources (employees, advisors, suppliers) - Financial resources (funding or in-kind support) - Intellectual resources (software, connections, IP) How to do Product Research Product research enables venture founders to understand the current future needs/pain points of target customers/users. Startups that invest in the product research process understand the market better, stay ahead of the competition and survive. - Define your high-level research goals - Understand your customers’ needs and pain points - Perform competitor, market and trends analysis - Validate product/service idea hypothesis (i.e. interviews) - Build and test your prototype and MVP (minimum viable product) - Collects findings and insights  - Use customer-centric insights to inform product design and go to market strategies (aka continuous Customer Discovery) 1. Research trending high-demand products 2. Read about similar products/services 3. Host a focus group with your prototype/MVP 4. Get expert advice on your prototype/MVP 5. Consider product marketing = customer relationships a. Where/how do they discover new products? b. How will you promote it? c. Who is your first adopting group? d. Where do they hangout? 6. Outline and design a soft launch 7. Never stop product research = continuous feedback Product research as user-research increases customer adoption, satisfaction, and inspires loyalty. Class 16 Rapid Prototyping - Rapid prototypes or quick mock ups allow you to get comfortable with making clumsy and unpolished work in a low-risk environment and learn through doing. - It asks that you let go of the “right way “ of doing something and get comfortable making ‘bad’ work in order to uncover better ideas - Prototypes offer a way to visualize your idea as resolving customer needs or solving their problem leading to desirable, feasible and viable MVP (minimum viable product) Proof of Concept (POC) vs Prototype Proof of Concept - A PoC is used to demonstrate the feasibility of an idea or concept. It is typically a small, incomplete model or an experiment aimed at proving that an idea, technology, or approach can work in theory = rapid prototype. - Purpose: To verify (or prove) that the concept is possible and has potential. It answers: “ Can we do this?” - Example: A simple software script to see if a certain feature can function as intended, or testing if a new material can be used for a product Prototype - A prototype is a working model that is closer to the final product. It is built to test the design, functionality, and user experience of the concept in a more tangible and interactive way.  - Purpose: To test the actual functionality, design, and usability of the product. It answers: “How will this work and look in practice?” - Example: A mock-up of a physical product or a functional version of a software application that users can interact with Creating product prototypes - Enables you to test and refine the functionality of your design (from theory to tangible thing) - Makes it possible to test performance of various materials (for optimum material choice) - Helps you describe your product more effectively (messaging to packaging) - Encourages others to take you more seriously (look professional to strategic partners or investors) - Busts any preconceived notions (biases) of the design, materials and potential partners Value of rapid prototypes - Low-stakes testing of ‘ideal made visible’ - Practice creative thinking and idea generation - Engage all team members to co-create or co-build - See and sense if “idea” could solve intended problem - Gain different perspectives on ‘rough prototypes’ - Improve ideas through active listening and feedback - Entrepreneurs test early concept through sketches, mockups ad simple ‘builds’ with team + potential customers “If a picture is worth 1000 words, a prototype is worth 1000 meetings.” Class 17 Strategic Partnerships for Startups: Strategic partnerships are relationships where two (or more) organizations collaborate to achieve their shared and respective business goal Strategic partnerships are important to include: - Expand your reach: leverage your partner’s pre-existing customer base and expand your reach to customers who might have never found you otherwise - Gain knowledge: learn from larger, established businesses who have found ways to solve the same problems you now face - Pool resources: boost your key resources within budget constraints: physical, human, intellectual (tech)  - Build your brand reputation: other brands can give you the stamp of quality and trust you need, and vice versa How to secure partnerships - Focus on your strengths and identify weaknesses: what do you bring in terms of value, insights, technology, market, etc. What are your gaps? - Look for partners on multiple platforms: who is leading or trending or influencing your target customer (e.g. Instagram account, social media influencer, etc.) - Build trust through corporate responsibility partners: look to corporate responsibility and charity partnerships that benefit your customer, team or community - Network: meet with businesses inside your field or adjacent to your field > those seeking a small, nimble and agile startup like yours - Focus on quality over quantity: clear business goals Entrepreneurship and Partnerships “Entrepreneurship is the pursuit of opportunity beyond resources controlled” - Pursuit = singular focus and urgency - Opportunity = novel, new and innovative - Resources - limited, bootstrapped, risk-taking Partnerships have the power to transform Startups from fledgling ventures into industry leaders. They can open doors to new markets, bring in vital expertise, and provide the resources necessary for explosive growth. Class 18 Legal mistakes and startups - When it comes to legal matters, trial and error can get extremely expensive. - Avoid the following mistakes involving: - Splitting the equity with co-founders - Not assigning intellectual property - Mishandling employee equity - Spamming everyone with NDAS (non-disclosure agreement) - Stacking your funding rounds - Legal entity: corporation or LLM - Company name and trademarks - Security laws and fundraising - Taxes and the right counsel - Hiring and firing documentation, etc. Class 19 BMC and Cost Structure Cost Structure = all costs incurred to operate your business model - What are the most important costs to deliver our value proposition? - Which key resources are needed at what cost? - Which key activities are required at what cost? - How much to maintain customer relationships> - How much do customer channels cost? Your cost structure reflects your business model: - cost-driven = low cost, automation, no frills (e.g. Flair Air) - Value-driven = higher cost, customization, luxury (e.g. Louis Vuitton) Revenue Structure = ways your venture generates cash from customers - What are the most profitable ways to deliver our Value proposition? - How much are our customers willing to pay? - How much they prefer to pay? - How much does each customer segment contribute to overall revenue in terms of percentage of the total? Your revenue structure reflects your business model: - Asset sale = sale of goods - Usage fee = pay per use - Subscription fee = pay per access - Lending/loaning/renting = pay per exclusive access - Licensing fee = pay for exclusive rights - Brokerage fee = percentage of transaction - Advertising = fees from advertising other products/services/brands Financing startups Personal Investment: investing your own money (cash or collateral). Shows your personal and long-term commitment to your venture Grants or prizes: government funding to help cover expenses, such as research and development, marketing, salaries, equipment and productivity improvement (no repayment). Love money: loans from parents, extending family or friends. Shows you have “patient capital” that will be repaid later as your venture becomes profitable. Venture capital: take an equity position (shares) and look for tech-driven ventures with high-growth potential in sectors such as information technology and biotechnology Angels: wealthy individuals or retired company executives who invest directly in the early stages of new ventures, contributing experience, social and capital networks ($25-100k) Crowdfunding: ventures ask the public for a contribution, usually in exchange for equity in the company, asking many people for small contributions (ex. gofundme) Business incubators/accelerators: focus on the high-tech sector, providing support for new ventures in various stages of development; offer workplace, mentors, introductions to investors Bootstrapping for Startups - Bootstrapping is founding and running a company using only personal finances or operating revenue - Allows the entrepreneur to maintain more control, but it also can increase financial strain - Owners can bootstrap by cutting costs, personally financing operations, cutting back operations, or looking for other creative short-term financing solutions - GoPro, Facebook, and Amazon are examples of companies with humble and bootstrapped beginnings Pros: Stay in control + short term profitability + few resources Cons: high risk (no capital) + limited resources + (-) POV Simple Estimation Formula Project revue = Project income - Projected Expenses - Estimated income: identify a baseline of how much a product/service your venture will sell during a specific block of time (month or year) - Estimated expenses: identify a baseline of how much your product/service will cost during a specific block of time (month or year)