ISOM 4020: Innovation Management & Technology Entrepreneurship - Final Review

Comprehensive vocabulary flashcards covering entrepreneurial strategy, disruptive innovation, IP strategy, platform dynamics, value chains, and scaling strategies based on ISOM 4020 lecture materials.

Collaborate (Entrepreneurial Strategy)

A strategic choice to partner with incumbents and leverage their complementary assets to enhance value creation and access existing customers.

Compete (Entrepreneurial Strategy)

A strategic choice to challenge incumbents by creating a novel value chain, servicing new customers, and establishing independent bargaining power.

Control (Entrepreneurial Strategy)

A strategy focused on building a moat through strong Intellectual Property (IP) protection and creating barriers to entry, often involving higher upfront costs.

Execution (Entrepreneurial Strategy)

A strategy focused on rapid market entry, quick customer feedback, and competition through agility rather than formal protection.

Disruptive Innovation

Innovations that cause fundamental industry change by addressing underserved needs of an existing segment, creating value through a new technological trajectory.

Technological Trajectory

The path of innovation in a specific field; a branch in the evolution of a product or service's technological design.

Market Inertia (The Innovator's Dilemma)

The phenomenon where established technologies satisfy mainstream needs while niche disruptive technologies initially focus on low-end markets before competing directly.

Arrow's Replacement Effect

The logic that incumbents may resist investing in emerging technologies if they only earn incremental profits and 'replace' or cannibalize their current profits.

Sustaining Innovation

Targets demanding, high-end customers with improved performance on established metrics, typically favoring incumbents.

Low-End Disruption

A type of disruption that targets overserved customers with a 'good enough' solution at lower cost and profit margins.

New-Market Disruption

A type of disruption that competes with 'nonconsumption' by making products affordable and simple for entirely new populations.

Organizational Inertia

The internal resistance to change within a firm, often where core competencies turn into core rigidities.

Complementary Assets

Non-R&D capabilities needed to commercialize an innovation, such as manufacturing, marketing, distribution, and customer support.

Intellectual Property (IP) Strategy

A plan to monetize ideas by licensing them to existing firms while maintaining control and bargaining power, rather than building the final product.

Arrow’s Information Paradox (1962)

The dilemma where a buyer must have information disclosed to value it, but once disclosed, the buyer can copy it without paying.

Trade Secret

A tool of IP strategy protecting confidential formulas, processes, or algorithms indefinitely, provided they are kept secret.

Ideas Factory

An organizational model aimed at continuously generating licensable innovations through high-level research talent and negotiation specialists.

Indemnification

A contractual obligation where one party (such as Getty Images) agrees to compensate another for losses arising from third-party claims.

PicScout

A digital image fingerprinting technology used by Getty Images to identify image use across the web and detect copyright infringement.

Network Effect

This exists when the value of a technology or service increases with the number of other users of the same technology.

Metcalfe’s Law

States that the value of a product or service increases proportionally to the square of its number of users, often represented as $n^2$.

Platform Business

A digital marketplace that creates value by facilitating exchanges among two or more independent groups rather than owning the means of production.

Same-side Network Effect

The preference regarding the number of other users on one's own side of a two-sided market (e.g., more players in an online game).

Cross-side Network Effect

The preference regarding the number of users on the opposite side of a platform (e.g., developers valuing a large base of end-users).

Chicken-and-egg Problem

A platform challenge where initial users face a decision to join when there is little to no existing network to benefit from.

Piggyback Strategy

A method to solve the chicken-and-egg problem by connecting with an existing user base from a different platform to attract participants.

Winner-takes-all Market

A market where high multi-homing costs, strong positive network effects, and low niche specialization lead to a few winners taking the whole market.

Multi-homing Costs

The upfront, ongoing, and termination costs borne by users due to affiliation with multiple platforms.

Platform Envelopment

A threat where a rival platform with the same users offers your functionality, often bundled as part of a larger offer.

Value Chain

A connected series of activities where value is added to a product or service across a sequence of stages until it is sold to customers.

Moby Dick Theory

The advice not to design a startup whose success depends entirely on closing one giant enterprise deal, due to high risk and slow timelines.

Zebra Medical Vision

An AI medical imaging company that occupies the interpretation layer of the radiology value chain, complementing rather than replacing radiologists.

Go-to-Market (GTM) Strategy

A strategic system that links customer, product, price, channel, and message into an integrated plan for market entry.

CAC (Customer Acquisition Cost)

A metric calculated as $\text{Spend} \div \text{New Customers}$ used to measure the efficiency of acquisition.

LTV (Lifetime Value)

A metric calculated as $\text{ARPU} \times \text{Avg. Lifetime}$ used to determine the revenue sustainability of a customer.

LTV:CAC Ratio

A business health metric where the target is typically $\ge 3\times$.

Sales Velocity

A metric measuring the speed of the revenue pipeline, calculated as $\text{Deals} \times \text{Win\%} \times \text{ACV} \div \text{Cycle}$.

Blitzscaling

A scale-up strategy that prioritizes speed over efficiency in winner-take-all markets, often funded by venture capital.

Bricolage

A resource-frugal and experimental scaling strategy typically used in resource-scarce or local emerging markets.

Nail It, Scale It

A growth playbook that focuses on validating product-market fit (PMF) before investing heavily in scaling.