BUSM 4010: Entrepreneurship and Innovation Midterm Review

Vocabulary flashcards covering core entrepreneurship, ideation, team development, market analysis, customer discovery, pricing, and adoption life-cycle concepts for the BUSM 4010 midterm exam.

Validation

The rigorous process of actively looking for evidence that your assumptions are wrong and being unable to find it.

Confirmation

The dangerous process of searching only for evidence that supports you being right and finding it.

Diverge Before You Converge

A four-step ideation process: 1. Diverge (generate many possibilities), 2. Evaluate (identify promising options), 3. Converge (narrow to strongest possibilities), and 4. Focus (commit to the best idea).

Criteria for an Idea Worth Pursuing

A strong venture opportunity must meet all three criteria: Meaningful (does the problem matter?), Feasible (can we actually do it?), and Monetizable (will someone pay?).

Inside Out Thinking

A concept highlighted by Simon Sinek asserting that people do not buy for what you do, but why you do it, purchasing products that prove what they believe.

The Change Curve

A behavioral progression tracking reactions to change across stages: Denial (blame others, blame self), Doubt (uncertainty/confusion, acceptance/rationalization), and Acceptance (problem solving, moving on).

Forming

The first stage of Tuckman's cycle where members get acquainted, learn about the project, establish initial expectations, and depend on a leader for direction; characterized by low team performance.

Storming

The second stage of Tuckman's cycle where differences in opinions, personalities, and working styles emerge; the team must address conflict, resolve disagreements, and communicate openly.

Norming

The third stage of Tuckman's cycle where members build trust, clarify roles, agree on shared expectations, and establish team norms to strengthen collaboration.

Performing

The final stage of Tuckman's cycle where the team operates efficiently toward shared goals, members solve problems independently, and high team effectiveness and performance are maintained.

Feature

What a product or service has or does; a specific attribute, characteristic, capability, or physical/technical component.

Benefit

Why a feature matters to the customer; the value or positive outcome received (answering 'So What') categorized into emotional, social, health, financial, or convenience benefits.

Customer

The specific person or organization that purchases or pays for the product or service.

User

The individual who actually uses, interacts with, or operates the product or service.

Market Segmentation

The practice of dividing a broad target market into smaller, distinct groups of customers who share common characteristics, needs, or behaviors.

Entry Point

The specific place where a new business first enters a market by targeting a narrowly defined customer segment with a clearly unmet need.

Competitive Matrix

An information-rich tool that provides clarity on an offering's differentiation, created by defining axes based on unique features target customers value most.

Industry

A group of sellers offering products or services that are similar and close substitutes for one another.

Primary Research

Original information collected directly by the entrepreneur for their own specific research question through methods such as interviews, surveys, and polls.

Secondary Research

Information gathered from previously published or existing sources such as company websites, 10-Ks, trade journals, databases, and analyst reports.

Resources

What a business has or can access, including financial capital, physical assets, human knowledge/skills, organizational contacts, and intangible assets like patents.

Capabilities

What a business can do, including designing and developing products, efficient manufacturing, distribution, and executing customer research.

Product/Market Fit

Developing a product or service that meets the needs of a defined market well enough that customers find it valuable and want to use or buy it.

Customer Discovery

The process of learning directly from potential customers to understand their problems, behaviors, and needs in order to test assumptions rather than convince them.

Jobs-to-Be-Done Theory

A framework stating that customers 'hire' products to accomplish a specific job in their lives, requiring businesses to understand customer situations rather than merely asking for feature requests.

Investor Pitch

A narrative designed to generate interest, create an emotional connection, tell a compelling story, and motivate investors to request more information.

Investor Package

A concise, evidence-based document that clearly details data, financials, and facts to help investors evaluate the venture at their own pace.

Customer Interviews

Direct discovery conversations aimed at helping a team understand the problem, the customer persona, and existing customer behaviors.

Expert Interviews

Discussions with industry specialists aimed at evaluating the market, industry dynamics, technical feasibility, economics, and broad venture assumptions.

Landing Page

The first operational test of a marketing strategy used to test if strangers understand the value proposition in under $10$ seconds and to measure a single Call to Action (CTA).

The 4 Cs of Marketing

A customer-centric marketing framework corresponding to the traditional 4 Ps: Customer Value (Product), Communication with Customer (Promotion), Convenience for Customer (Place), and Cost to Customer (Price).

Value-Based Pricing

A pricing strategy where the price is set primarily based on the customer's perceived benefit and value received rather than input costs.

Cost-Plus Pricing

A pricing strategy where the total cost of production is calculated and a specific markup percentage is added to determine the selling price.

Penetration Pricing

A strategy that utilizes heavily discounted, low introductory pricing to accelerate market adoption and encourage initial customer usage.

Premium Pricing

A strategy that establishes higher-end pricing specifically to signal superior brand quality and value to the consumer.

Competitive Pricing

A strategy where a venture sets its product price benchmarked directly relative to the alternatives and competitors in the market.

Sales Funnel

The conversion path that guides potential buyers through four progressive stages: Awareness, Interest, Consideration, and Purchase.

Conversion Rate

A key performance metric calculated as the percentage of identified leads who ultimately become paying customers.

Customer Capture, Expansion, and Retention

The three elements of customer lifecycle strategy: Capture (acquiring new buyers), Expansion (increasing revenue from existing buyers via upselling/cross-selling), and Retention (driving loyalty and repeat purchases).

The Chasm

The dangerous credibility and trust gap in the Technology Adoption Life Cycle between visionary Early Adopters ($13.5\%$) and pragmatic Early Majority ($34\%$) where disruptive innovations frequently fail.

Innovators

Technology enthusiasts representing $2.5\%$ of the adoption curve who love new inventions and are willing to experiment with unpolished products.

Early Adopters

Visionaries representing $13.5\%$ of the adoption curve who purchase breakthrough solutions early to gain a distinct competitive or strategic advantage.

Early Majority

Pragmatists making up $34\%$ of the adoption curve who delay adoption until the technology is proven, supported, and solves practical problems.

Late Majority and Laggards

Skeptical or conservative buyers comprising $50\%$ of the market who adopt an innovation only when it has become standard or unavoidable.

Revenue Forecast Formula

The financial calculation defining expected sales volume: $\text{Projected Revenue} = \text{Sales Price/unit Sold} \times \text{Number of Units}$.