1e Exam Questions Chapter.10 Launch For Growth To Success

Chapter 10: Launch for Growth to Success

= Correct answer

Multiple Choice/Fill in the Blank

1. Which of the following is a methodology that helps innovation by continuously testing products and getting feedback in real time?

A. feedback startup

B. lean startup

C. minimum viable product

D. pivoting

Difficulty: Easy

1. How is a lean plan different from the traditional business plan?

A. The lean plan is only used for internal audiences rather than external ones.

B. The lean plan only includes the components for the build-measure-learn loop.

C. The lean plan only includes key financial information and competitive analysis.

D. The lean plan exists only as a virtual document rather than a printed copy.

Difficulty: Moderate

1. Why have tech companies primarily used the lean startup method?

A. It is risky to work many years on a product without measuring customer response.

B. The tech environment rarely changes, so this approach makes sense.

C. Tech companies have learned that they need less innovation to make products relevant.

D. Tech companies rely primarily on manufacturing.

Difficulty: Moderate

1. Your business is very successful. You want to open a new location in another state using the same business model. What might be an appropriate strategy for you to consider?

A. franchising

B. joint venture

C. licensing

D. partnership

Difficulty: Moderate

1. Which of the following is an early prototype that provides the basic product to help customers understand what it is about?

A. early prototype

B. experimental viable product

C. lean prototype

D. minimum viable product

Difficulty: Moderate

1. To boost sales for your organic pet food, you decide to work through veterinarians in the local area to showcase and sell your products. This is an example of which growth strategy?

A. adding new markets

B. market penetration

C. new distribution channel

D. product improvement

Difficulty: Moderate

1. Which of the following groups like to try new products as soon as they come out?

A. early adopters

B. first-to-marketers

C. prototype adopters

D. tech adopters

Difficulty: Easy

1. How does the build-measure-learn loop help the entrepreneur?

A. It allows the entrepreneur to make money before actually launching their business.

B. It enables the entrepreneur to work directly with the manufacturer of their product.

C. It helps the entrepreneur make quick adjustments to products and strategies.

D. It has several defined steps that add structure to the startup phase.

Difficulty: Difficult

1. Using ________, measurements such as testing assumptions about the business, attributes the customers like, and retention rates can be collected.

A. innovation accounting

B. financial accounting

C. iteration accounting

D. lean accounting

Difficulty: Moderate

1. Which of the following is (are) most important in the lean process?

A. feedback

B. minimal data

C. online surveys

D. physical prototypes

Difficulty: Difficult

1. The verbal delivery of an idea or business plan is called ________.

A. early adopting

B. iterating

C. pitching

D. pivoting

Difficulty: Easy

1. How does the lean startup method enable products/services to get to customers in a shorter period of time?

A. The prototype is sold as is to generate revenue early in the development process.

B. In the lean startup method, businesses use only free or very cost-effective materials.

C. Companies learn from customers during the planning process.

D. The entrepreneur only delivers the pitch during the first phases of operation.

Difficulty: Difficult

1. How is a lean pitch different from a regular pitch?

A. The lean pitch includes a validation of the business model with data.

B. With the lean pitch, you do not ask for investment in the venture.

C. The lean pitch only includes conceptual ideas rather than facts.

D. The regular pitch is intended primarily for internal audiences.

Difficulty: Moderate

1. Which of the following occurs after carefully going through the build-measure-learn loop?

A. adopting

B. pitching

C. pivoting

D. prototyping

Difficulty: Moderate

1. What type of pivot is needed when the customer that is studied is not representative of who will buy the product at a larger scale?

A. customer need

B. customer segment

C. platform

D. zoom-in

Difficulty: Difficult

1. Which of the following is the ending of a business due to lack of goal attainment?

A. business failure

B. ceasing operations

C. innovation failure

D. pivoting

Difficulty: Easy

1. Adding features such as backup cameras, auxiliary cord adaptors, and Bluetooth connectivity to vehicles is an example of which type of pivot?

A. customer need

B. customer segment

C. zoom-in

D. zoom-out

Difficulty: Difficult

1. Which of the following are some of the financial factors that play a large role in startup failure?

A. too much revenue, depreciation, and stock prices

B. accrual accounting and innovation accounting

C. insufficient cash flow, too much debt, and lack of capital

D. leasing arrangements and utility setup fees

Difficulty: Moderate

1. Which factor of business failure can be avoided by using the build-measure-loop?

A. carrying too much debt

B. failing to change effectively

C. fighting founders

D. lack of cash

Difficulty: Moderate

1. How can entrepreneurs recover from a business failure?

A. decide to end the business and not pursue it any further

B. turn obstacles into positive lessons

C. sell their idea to another entity

D. choose not to adjust and keep going down the same path

Difficulty: Moderate

1. What percentage of businesses generally survive to the five- or ten-year mark?

A. 8–12 percent

B. 10–15 percent

C. 20–30 percent

D. 40–50 percent

Difficulty: Easy

1. A(n) ________ follows the path of lean methodology.

A. innovating plan

B. iterating plan

C. lean plan

D. pivoting plan

Difficulty: Easy

1. Which step, where outcomes are thoroughly reviewed, should be done at least once a month?

A. building your MVP

B. reviewing your plan

C. reviewing your results

D. testing your MVP

Difficulty: Easy

1. The stage in the business life cycle before rebirth or death is called ________.

A. decline

B. innovating

C. maturity

D. rapid growth

Difficulty: Moderate

1. Which of the following is an easy and inexpensive way to increase sales of a new product?

A. discontinuing

B. early adopting

C. pivoting

D. product enhancement

Difficulty: Easy

1. Which of the following is a contract in which one enterprise gives permission to another to manufacture and sell its product?

A. franchising

B. licensing

C. outsourcing

D. partnering

Difficulty: Easy

True/False

1. True or false? A lean startup calls for a product to be shared with early adopters to gain immediate feedback.

Difficulty: Moderate

1. True or false? A product must be built to be an MVP.

Difficulty: Moderate

1. True or false? An MVP is an early stage prototype.

Difficulty: Easy

1. True or false? With innovation accounting, entrepreneurs should look first at financial measurements.

Difficulty: Moderate

1. True or false? Iterations are changes or additions to products.

Difficulty: Easy

1. True or false? During the lean pitch you should discuss what you have accomplished thus far in terms of sales/profits.

Difficulty: Moderate

1. True or false? High sales is one reason for business failure.

Difficulty: Easy

1. True or false? Issues of cash flow can lead to a quick increase in business growth.

Difficulty: Difficult

1. True or false? Fear of failure is cited as one reason that businesses can fail.

Difficulty: Easy

1. True or false? Being your own boss is a pro of business ownership.

Difficulty: Easy

1. True or false? Being a woman makes it easy to gain entry into the tech industry.

Difficulty: Moderate

1. True or false? A lean plan is a brief business plan to show to potential investors.

Difficulty: Easy

1. True or false? The lean plan should never be revised.

Difficulty: Moderate

1. True or false? During the rebirth stage, industries change or business owners fail to keep their offerings relevant.

Difficulty: Difficult

1. True or false? Using new distribution channels is one strategy for growth.

Difficulty: Easy

1. True or false? Franchising is a type of licensing.

Difficulty: Moderate

1. True or false? The lean plan should be a lengthy document.

Difficulty: Moderate

1. True or false? Entrepreneurs operate in a competitive environment.

Difficulty: Difficult

Short Answer

1. Discuss the lean startup methodology and why it is primarily used in the tech industry.

Difficulty: Moderate

1. Discuss the steps in the build-measure-learn loop.

Difficulty: Easy

1. Discuss the concept of early adopters and how they fit into the lean process. Do you consider yourself an early adopter? Why or why not?

Student responses should also include a brief statement about why they are or are not considered an early adopter. Students should provide a brief overview of their personality and purchasing habits when it comes to new items on the market.

Difficulty: Moderate

1. Why is the concept of innovation accounting advocated?

Difficulty: Difficult

1. Outline the steps for lean startup pitching.

Difficulty: Easy

1. What is pivoting and how does it relate to the build-measure-learn loop approach? Give an example of when pivoting might be needed and how it can be done.

One example of pivoting is when Netflix changed its approach from sending DVDs to customers to a streaming platform. The company had to adjust how they operated their business and their pricing structure. In addition, now that the market has shifted from DVDs, the company self-produces many streaming movies and series shows. Netflix’s pivot from DVDs to streaming happened around the same time that video stores such as Blockbuster started experiencing losses. Customers were no longer renting movies as much because of the availability of online streaming services. In order to survive, Netflix had to pivot.

Difficulty: Moderate

1. Discuss typical management challenges that can lead to business failure.

Difficulty: Easy

1. Discuss some signs of fear of failure for an entrepreneur.

Difficulty: Easy

1. Discuss the concept of how to convert failure into lessons learned and success. Include an example of time when you experienced failure and how you moved past that failure with lessons learned.

A thorough student response includes a brief reflection of a moment of failure they experienced. Answers here can vary, but there should be some articulation of the lessons learned from the failure and how they moved past it.

Difficulty: Difficult

1. Discuss the challenges facing women and minorities in the entrepreneurial field.

For minorities, additional challenges are present. They too have lower access to capital perhaps due to little credit history. The networking opportunities for minorities are fewer and they may possess lower business knowledge. The failure rate for minority-owned businesses is greater than that of other groups, even if they are opening businesses at a faster rate.

Difficulty: Moderate

1. Outline the components of a lean plan and give an example of how this can apply to a business idea that you have.

A sample answer of a business application is as follows: The product that we are offering is organic pet food for both cats and dogs. It will be offered at our retail establishment and through our website. The price will be based on the product order and will vary with quantities ordered. It is expected that the price will be about 10 percent higher than the current market price for regular pet food because of the specialty nature of the product. The product will be marketed towards avid pet owners that have one or two pets. Initially the retail shop will have normal business hours, and for the website, shipping will be handled on an as-needed basis. Customers can also save shipping costs by purchasing through the website and picking the product up at the retail location. Further growth includes offering a subscription service where products will be shipped on a weekly/monthly basis to customers for a set fee per month. First year sales are expected to be roughly $40,000 with a target profit margin of 35 percent which is in line with the profit margin for most pet foods on the market now.

Difficulty: Moderate

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