SEF II Unit #2 Study Guide

Vocabulary flashcards covering entrepreneurship concepts, customer development, prototyping, lean startup methodologies, and market adoption segments from the SEF II Unit #2 Study Guide.

Incubator

An organization that helps early-stage entrepreneurs refine an idea while providing access to a whole network of other startups, mentors, and other valuable resources.

Accelerator

An organization that provides tailored support for existing startups that have already built a successful product or service (usually through an incubator) by helping to develop, scale, and grow their business, typically offering free office space, feedback, and access to investors.

Prototyping

An experimental process where design teams implement ideas into tangible forms from paper to digital to capture design concepts, test them on users, and refine and validate designs.

Fidelity

The level of detail and functionality included in a prototype, which depends on the product's development stage.

Low-Fidelity Prototype

A prototype with a low level of detail and functionality, such as a paper prototype, that is fast, cheap, disposable, and quick to iterate, but lacks realism and direct interactivity.

High-Fidelity Prototype

A prototype with a high level of detail and functionality, such as digital prototypes created on software, websites, or functioning apps, that is engaging and provides realistic testing results, but is costlier and more time-consuming to create.

Ideation

A creative process where designers generate ideas in sessions through methods such as brainstorming, worst possible idea, brain walking, challenging assumptions, mind-mapping, sketching, and storyboarding.

Minimum Viable Product (MVP)

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

IDEO

An organization that popularized design thinking and focuses on human-centered design by asking the starting question: 'What do people need?'

Feasibility

What can be achieved in the near future.

Viability

How sustainable an idea is in the long term.

Invention

A new idea, method, or device.

Innovation

The translation of a new idea, method, or device into something that creates value for a customer.

Entrepreneurship

Pursuing the creation, delivery, and capture of value from new ideas.

Market

A place where people sell goods and services (supply) to people who wish to buy them (demand), or a set of actual or potential customers who share common needs and reference each other when making buying decisions.

End-users

The type of customers who will actually use your product.

Influencers (or Opinion Leaders)

Customers with a large following who have the power to influence purchase decisions and whose feedback helps refine and tweak the product.

Recommenders

People who evaluate a product and tell the public about it, such as bloggers or industry experts.

Economic Buyers

Customers who have the authority to approve large-scale purchases, such as buyers for retail chains, corporate office managers, and corporate VPs.

Decision Makers

Customers similar to economic buyers who possess even higher authority to make purchasing decisions because they are positioned higher in the organizational hierarchy.

Customer

Someone who pays for a product or service.

Consumer

Customers who use a product or service.

Customer Persona

Profiles or representations of ideal customers based on information and market research that help create strategies to connect with target audiences and promote products.

Demographics

Data used to identify your target end-user.

Psychographics

A method used to describe the psychological attributes of your target end-users.

Proxy Product

An indicator that gives you an idea of what else an end-user is likely to buy.

Watering Holes

Places where users meet and swap information.

Exclusionary Persona

A model of who you do not want as a customer, saving time and resources by identifying people who will never buy from you regardless of sales and marketing effort.

Innovators

The first $2.5\%$ of customers to try a new product; they are enthusiastic about new technology, can afford the risk of early versions, and are generally wealthier than other adopters.

Early Adopters

The second customer group ($13.5\%$ of customers) who buy new products shortly after release; they are typically influential individuals in business or government making reasoned decisions to gain a competitive advantage.

Early Majority

A customer group consisting of the next $34\%$ of customers who adopt when a product achieves mass-market appeal; they are practical and risk-averse, relying on opinions from peers before buying.

Late Majority

A customer group consisting of $34\%$ of customers who are skeptical, pessimistic, risk-averse, and less affluent, requiring simpler and affordable products to be won over.

Laggards

The final $16\%$ of customers to adopt an innovation; they have a negative attitude toward technology and a strong aversion to change.

Beachhead Market

A single, initial target market that is the most straightforward to capture, providing early cash flow and a stronghold from which an entrepreneur can strategically expand into other markets.

Lean Startups

Startups that follow a hypothesis-driven approach to evaluate entrepreneurial opportunities and mitigate cognitive biases under conditions of resource constraints and uncertainty.

Persevere

The decision to continue on the current path—testing remaining hypotheses or preparing to scale—when an MVP test validates the business model hypothesis and feedback warrants no change.

Pivot

The decision to change certain business model elements while retaining others when an MVP test rejects a hypothesis or indicates greater opportunity exists elsewhere.

Perish

The decision to shut down a business when an MVP test decisively rejects a crucial business model hypothesis and no plausible pivot can be identified.

Product-Market Fit

The state where a venture has the right product for the market with demonstrated demand from early adopters, solid profit potential, and the ability to deliver adequate value to employees, customers, partners, and investors.