Knowt
Note
Studied by 8 peopleNoteStudied by 14 peopleNoteStudied by 23 peopleNoteStudied by 32 peopleNoteStudied by 11 peopleNoteStudied by 24 people
2nd Half of Semester - Econ 125 Fall 2024 Final Collaborative Study Guide
Format? The final will be a closed note, timed exam and will be approximately 50 multiple-choice questions.
When/Where? The test will be administered in Genome 100 from 4-7 pm on December 12th.
What’s covered? Review content in Virtual Sessions, slides from classes, and notes you have taken in class, speakers - majority will be from the second half of the semester, but there will be some questions on content covered the first half
The professors/TAs will not be monitoring or adding to this document. This is your opportunity to collaborate with your colleagues and peers to prepare for the midterm.
This is an old quizlet but might be helpful! https://quizlet.com/781219333/unc-econ-125-final-flash-cards/?i=5b5h3y&x=1jqt
DO WE NEED TO WATCH THE VIDEOS IN THE MODULES? WILL THAT BE TESTED?
POST MIDTERM MATERIALS
What was the initial idea for Twitter (formerly known as Odeo)?
Why is product-market fit critical for startups? 80% of start-ups fail bc they don’t have this
Q About using AI to build our models–
b
What is unique about the lean canvas model?
Unique Value Proposition
Customer Segments
Costs
Revenue Streams
FINANCIAL MODEL– TOP DOWN VS. BOTTOM UP
Top-Down:
Starts broad, then narrows down (e.g.,
estimate the total market size and determine the share
you’ll capture). It’s often based on assumptions about the
overall market.
Bottom-Up:
Starts with specific details and builds up to
an overall figure (e.g., start with initial customers and
their spending to estimate growth). It relies more on
detailed, specific data and realistic projections
ART OF THE PITCH
ETHICS WITH KUNDRO- What does this mean what is it from?
Can someone please add notes for this
Added all VS + lecture below VS for midterm
UNIQUE VALUE PROPOSITION
PRODUCT MARKET FIT
PIVOTING FOCUS
FORMS OF INVESTMENT // INITIAL CAPITAL “Financing Your Venture”
Bootstrapping
Bootstrapping is a situation where an entrepreneur starts a company with little capital, relying on money other than outside investment
Helps the entrepreneur stay scrappy and realize talents they didn’t know they had
Maintain control of a company until you find the right partner
1ST MIDTERM REVIEW MATERIALS
Quizlet with Concept Flashcard and Questions:
https://quizlet.com/955075965/econ125-midterm-flash-cards/?i=islyb&x=1jqt
WHAT IS A CONVERSATION PARTNER?
Someone who advocates for you but is not financially tied to the project - help identify pain points and ask difficult questions about the project, the timings and effectiveness of results.
Virtual Session Notes (There’s no VS 9 or 14):
“We are all Entrepreneurs…” Forbes Articles:
entrepreneurial: thinking and doing something that has not been done before in order to achieve a desirable goal or outcome
Acts of entrepreneurship don’t have to be related to starting a company
thinking/acting innovatively → embodies spirit of entrepreneurship
Entrepreneurial knowledge: The courage to act on opportunities under varying conditions of unknownness.
MVP - learning and validating with the least amount of effort and resources
Ex. Dropbox (email) and Zappos (taking pictures → shipping)
MVPs work to validate learning
Quizlet with Highlighted Terms: ECON 125 FINAL Flashcards | Quizlet
- “Everyone pivots” article
o It’s impossible to know your own blind spots, that is why they are called blind spots
o Conversation partners: advocates for you but not financially tied to the project
§ Ask you the hard questions about what you’re doing, the timing, and the effectiveness of your work and the results
o Pivoting your startup is not quitting
o The gift of letting go of this idea that you have to preserver no matter what
§ It gives you permission to make a different choice
- “Design thinking vs. Lean startup” article
o Aggressive marketing tactics would hook consumers who, faced with few other choices, would respond accordingly
o Traditionally, a business would build a product and hip to find a customer who wants to buy it.
o The lean startup approach is to begin with a minimum viable product, and make small, fast incremental changes to evolve the design after receiving feedback from the users
o Lean startup is about minimizing waste, so you’ll have to say two or three founders working to develop a product. They will work to prove an idea. Hopefully this leads to investment, which will allow them to prove other ideas.
§ Team will grow over time as the product and business develops
o The choice on which approach:
§ Do they want to build the product, test and pivot?
§ Do they want to let the problem take the lead before the product exists
VS #16:
Slides
Product Market Fit (PMF)
Product market fit means being in a good market with a product that can satisfy that market.
Simple to understand yet hard to achieve!
Make it or break it
JIBO example
How do you measure PMF?
Customer Satisfaction and Feedback
Net Promoter Score (NPS): "How likely are you to recommend this product to a friend or colleague?" NPS = % promoters - % detractors.
Surveys and Customer Interviews: "How would you feel if you could no longer use this product?" ≥ 40% responding with "very disappointed
Retention and Usage Metrics
Retention Rate: # users who continue to use product over time
Churn Rate: # customers lost in a year / # customers at beginning of year
Engagement: Time spent on the product and frequency of use
Growth Metrics
Customer Growth: Rapid customer acquisition
Revenue Growth: Consistent and growing revenue streams, especially from repeat customers
Market Demand
Waitlists or High Demand Indicators: Long waitlists, backorders, or high pre-order numbers
Market Penetration: % target market that is using your product
Why might you not find PMF?
Nice to have but not compelling
Didn’t meet need of user
Before its time
Market too small or no market
Product doesn’t work
Something out of your control
Element of marketing was off
JIBO case
➔ Design didn’t meet expectations.
➔ Price was too high.
➔ Timing was off.
How do you find product market fit
Understand your target customer
Find customer pain points
Offer a differentiated solution
Describe your value proposition
Outline your MVP
Build your MVP
Test your MVP
Upgrade and improve
Test your MVP again
Worst example of product market fit
Snap glasses
New coke
Barnes and noble nook
Why is product market fit important
Avoid startup failure
Grow your customers fast
Decrease cost per acquisition
Boost your profits
Confirmation bias: the tendency to interpret new evidence as confirmation of one’s existing beliefs or theories
Endowment effect: Individuals places a higher value on an object that they already own than the value they would put on that same object if they did not own it
Sunk cost fallacy: the phenomenon whereby a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial
VS #17
Why develop a strategy: the only other option is to continually out-execute the competition
Will make you very tired
Better alternative is to pause and pull back in order to garner your energy, focus your resources, and effectively push forward
Strategy: carving your position in the environment you find yourself in by identifying and implementing activities that allow you to have a sustainable competitive advantage ; the pause before taking action
Ultimately, it is about choosing who your customers will be, who they wont be, and making sure you’ve implemented the strategic activities necessary to attract and keep these customers.
Requires you to focus your resources and make hard choices
Most entrepreneurs don’t take this pause
Suggests that before you get started, you need to pause and think about what you’re going to do
Need to create a strategic identity, a position that is defensible and that will protect you without having to consistently run faster
Porter’s five forces
Threat of new entry
Examine how easy it would be for your competitors to enter your market
Determine how you can erect barriers to make it harder for them to do so
If others can easily enter the market and effectively copy you,you’ll find maintaining competitive advantage extremely difficult
Barriers to entry:
Economies of scale
Achieving rapid growth using size to make it hard for others to compete with you
ex) amazon
Product differentiation
Product provides value to customers that is hard to copy
Product functionality
Knowledge required to produce or patent it
Complex process that is difficult to reconstruct
ex) Ikea
Other barriers to entry
How do you make your product “sticky” so that its hard to switch to a competitor
Can you develop an exclusive distribution channel that’s not available to others
Can you develop some favorable cost advantages that are hard to copy
Bargaining power of buyers
If your principal customers have the upper hand, it may be difficult to forge a sustainable competitive advantage
Beware of:
A large customer who can dictate the terms
A customer whose cost structure is highly dependent on your product or service
A customer who views your product or service as a commodity. These customers will often find a substitute or even replicate your product or service themselves
Bargaining power of suppliers
If your suppliers have the bargaining power to raise the price of your materials you will have very little power over your cost
Cant lower prices very far which will lower your strategic option
Threat of substitute products or services
Substitute products arent the same as your product or service but can perform the same function as yours, it will make it easy for someone to switch
Rivalry among existing competitors
4 other competitive forces often converge to fuel rivalry
Rivalry itself centers around price
Avoid industries where price competitiveness is high because it will limit your ability to develop a distinctive strategy
Avoid competitive landscape with numerous competitors all about the same size where the product or service sold is not unique, it is more of a commodity
Or if there is not much growth in the industry
Swot
Strengths, weaknesses, opportunities, and threats
To perform, you want to first consider the information you need
Also want to involve the entire team in the process from the beginning to maximise the diversity of views that funnel into your work
To begin the process, you'll want to convene your team to independently analyze each of the four elements and create a strategic vision or mission that is consistent with all four
Strengths
Focus on internal assets that put you in a position of strengths
How will your idea solve a problem for your defined customer segment?
Internal and helpful
ex) apple
Weaknesses
The more honest you can be with your weaknesses, the more prepared youll be for the inevitable challenges ahead
How
One technique is too have everyone write down weaknesses anonymously then post them on a board for everyone to see
Product or service weakness
Does it contain the features and functionality that is expected by your target customers
Does it have the ability to exceed the expectation of these customers
Does it solve a critical problem or otherwise provide a delightful experience
Main weakness is the lack to be honest
Internal and harmful
Opportunities
Everyone on the team will have a host of ideas to make the venture better
The hardest part about strategy is not to decide what to do but to decide what not to do
To give in will cause you to abandon your strategy and be back to running against other competitors which will eventually cause you to lose to a more agile competitor
External and helpful
Threats
Involves competitors
When thinking about competition go back to the customer problem you are trying to solve
Competition is any way they are currently solving that problem
Direct: from a similar product
Indirect: competitor solves the problem in an entirely different way
ex) ride sharing
Competitive positioning matrix
List the credible features and capabilities required to solve customers problem
All the competitors on the other access
Check the boxes where your enterprise and competitors address the capability or ignore it
Developing a strategic position
Because there are always trade offs in how you allocate your resources, you have to create a defensible position with a clear focus and consistent vision
Use your competitive strengths
You want to make sure your position utilizes the competitive strengths your venture already has
Address strategic weaknesses
You want to make sure your strategy avoids areas in which you have strategic weaknesses, or make sure to incorporate activities to shore up your weaknesses
Identify strategic initiatives
You should have a set of strategic initiative
No more than four that provide laser focus for your enterprise and create a road map for the specific activities you will undertake
Monitor initiatives over time
You should discuss a means of monitoring each initiative to determine how you are performing over time
Ikea example
Ikea also designs and manufactures their own furniture and they understand it is a recreational experience and not just a buying opportunity
Knows their customers and caters to them by keeping cost low and only having a few employees on the floor
To cater to sense of fashion, they create their own furniture
They have coffee shops and nurseries that make it an experience
Higher end furniture stores would have to take employees away from the floor in order to reduce prices which would take away from sales
Ikea is well known and has strong brand recognition
Protects from competitors
Forbes reading
Operational effectiveness: necessary for performance but not sufficient for sustainable profitability
Involves practices like benchmarking, outsourcing, and continuous improvements, but does not constitute strategy
strategy : differentiation from competitors through unique positioning
About choosing a different set of activities to deliver a unique mix of value
Dangers of confusing the two
Many companies fail to translate operational effectiveness into sustainable profit
Overemphasis on operation effectiveness can lead companies away from true competitive advantage
Companies might end up in a “race to the bottom” if they focus to much on matching competitors rather than distinguishing themselves
The role of positioning:
Critical in strategy, its not static but needs to be dynamic and adaptable to changing markets and technologies
Effective positioning involves selecting different activities serving few segments, or offering unique services/products
“This is how companies can compete in the 2020s” article
Defying the average is more important than ever
Maintaining outperformance requires continuous reinvention
Compete on the rate of learning
Build a hybrid learning organization
apply the science of change
Harness human diversity
Pursue social and economic value
VS #18
Lean canvas intro video
Lean canvas: how you can verify your product idea before investing a lot of time and effort
Needed to create a project that will be in demand in the fast-changing market
Allows start up founders to mitigate the risk and uncertainty associated with a product inception
Problem-solution oriented approach and focus on the customers
9 boxes (problem, solution, unique value proposition, key metrics, channels, customer segments, cost structure, revenue streams, unfair advantage)
Customer segments
Narrow down the customer segment as accurately as possible
Separate users and customers
Specify the actual people who will be the first to use the raw product and provide feedback
Problem
Specify customer problems that your product is meant to solve
List your closest competitors that are already solving the specified problems
Revenue streams
List the ways your product will generate revenue from each customer segment
Solution
Explain what experience the customers are meant to have
Unique value proposition
Describe the uniqueness of your product and show its key difference from the existing alternative
High level concept: Shape a short and easy-to-understand statement about your product
Channels
Specify communication channels to reach out to your target audience
Key metrics
Define key tracking metrics to measure the progress of your business
Cost structure
Fixed and variable costs
Can answer questions like “where is the breakeven point”
Unfair advantage
A special thing about your idea that your competitors are not able to copy or obtain in any possible way
“Lean canvas - a tool your startup needs instead of a business plan” article
Business plan: normally packed with a bunch of information irrelevant to grasp the intricacies of the business
Rather ineffective as a tool for analyzing customers’ interests
Business model: generally denotes what is needed to monetize an idea; a course of actions aimed at achieving profitability
Why use the business model canvas?
Value orientation
You are able to analyze versatile aspects of your commercial activity
Focus
The aim is to clear away irrelevant data and focus on essential points that promote the business’s prosperity
fast , clear, and flexible
Failure-preventative
gives you an opportunity to prevent failures based on risk identification
Common language
The tool has an intuitive nature and creates a common language for all participants and third parties
Why use the lean canvas
Stay lean
It is a time-effective tools, which does not require a great deal of time to fill in
The final document is not final because you can and should update it in the case of new input data
Fast time-to-market
It foresees a quicker idea-to-product transition compared to a regular method
Understand your customer
Canvas allows you to consider various customer segments to cover a wider range of potential product users
Focus on viable metrics
Key startup metrics rest on minimum success criteria like conversion rate, number of subscribers, referrals, etc.
Lecture
Problem
What specific problem are you seeking to address for your target customer?
Solution
How are you solving the problem for the customer
competitors/substitues
What alternative will target customer use or do to solve their pain point
UVP
Describe this as though a customer is reading it
What is unique about your solution?
What sets your product or service apart from competitors?
How do your offerings address a customers’ pain point and fulfill their needs better than alternatives?
Channels
How do you reach and interact with customers
What are the distribution and communication methods used to make products or services accessible to the target market?
They can be physical or digital channels
Key metrics
What metrics will indicate that customers are “buying” or “using” your product/ service
How will you know your venture is successful
Cost structure
The main costs and expenses involved in operating your venture
Production costs, marketing and sales expenses, personnel, rent/overhead, research and development, other relevant financials
Variable costs: vary with the amount produced
Fixed costs: stay essentially the same regardless of how much production
Revenue stream:
How will your venture generate cash flow?
What revenue sources will attract enough customers to keep the lights on
Product sales, subscription models, advertising, licensing, or any other viable revenue generation approaches
VS #20
“Could your startup idea make money?” article
Entrepreneurs often get caught up in tactical questions like funding, digital marketing, and company structure before assessing the fundamental viability of their business idea
The primary question should always be whether the business could be financially viable through understanding unit economics
Back of the envelope business modeling
A simple, preliminary method to quickly evaluate the financial viability of a startup idea
Focuses on estimating potential revenue and costs using simplified assumptions
Unit economics involves calculating direct revenues and costs associated with a single unit of product or service
Key to determining if a business idea can be profitable on a per-unit basis
Lecture
Profit = revenue - costs
Assumptions
Who are your customers?
Top down: how big is the market and what share of the market can you capture during this time frame covered by the model
Starts broad, then narrows down
Often based on assumptions about the overall market
Bottom up: how many customers will you have in the beginning and how will they grow over time?
How many customers will you lose over time – what's your retention rate?
Starts with specific details and builds up to an overall figure
Relies more on detailed, specific data and realistic projections
Where is your revenue coming from?
How much do your customers or users pay?
Is payment one-time or recurring
Do you have more than one revenue stream?
Are you selling to multiple channels?
Revenue (ideas requiring grants/contributions)
Who are your donors/contributors
How many donors/contributors do you expect over time?
What frequency do you expect doantion/contributions
How much do you expect from these donors/contributors
Cost assumptions
variable /direct costs
What are the direct costs of producing the good/service (raw materials, packaging)
What are the transportation costs of delivering the food/service (shipping, fuel)
What are the costs of servicing your customer (customer service, tech support)
fixed/overhead costs
What do we need to build the business (website, R&D)
What do we have to do to operate th ebusiness (physical capital, software)
Where will employees work (office or manufacturing space?)
How many employees do you need (full time, part time, outsourced)
What are the costs of driving customers to buy your product/service (marketing campaigns, promotional events)
Big question to constantly ask about assumptions
Does it make sense?
It is realistic?
What are we missing?
Does it pass the “sniff” test
Burn rate: you will be spending before you prove your idea is viable
Runway: you want to know how m uch time you have to prove your idea
VS #21
Will these speakers be on the exam?? yes
Tim mclaughlin: confounders capital
Entrepreneur turned venture capitalist investor working primarily with B2B software startups in North Carolina and across the greater Southeast
Serves as board of directors of many of cofounder capital portfolio companies
Actively involved in NC IDEA application review process and does many other things to give back to the local triangle ecosystem
Catie king: stradia partners
Catie is currently the co-founder of stradia partners which helps to elevate the AI capacity of businesses to drive revenue and enhance productivity
Ben redding: nc idea chief financial officer
Has worked with great teams as a CFO, in private equity , and for software startups
Now the chief financial officer at NC IDEA where he oversees the day-to-day management of the foundations financial activities
Manages the NC IDEA ECOSYSTEM grant program
Nc ideas mission:
Strengthening the economy of NC through a strategic combination of grant programs, deployed directly and through a network of partners
Liam king: chief of staff at 2ndf
Is also a seed grant reviewer with NC IDEA
At 2ndf, liam and the team are very focused on the commercialization of ideas coming out of the local university systems and amplifying the outcomes for minorities in technology nationwide
“Startups need relationships before they ask for money” article
Importance of relationships in fundraising
Successful fundraising is often more about building relationships than immediate financial transactions
Founders should focus on developing connections with potential investors well before they raise capitals
Asking for advice, not just money
Entrepreneurs can engage potential investors by seeking advice rather than directly soliciting funds
This approach garners useful insights and subtly involves the investors in the startup, potentially leading to investment without direct ask
Building trust
A crucial element in securing investment
Investors need to know they can rely on the entrepreneur both personally and professionally
Involves being transparent, acknowledging what you dont know, and demonstrating how you plan to address knowledge gaps
Practical steps for relationship building
Start building relationships with potential investors up to a year in advance of fundraising
Utilize mutual connections to establish credibility and trust
Engage potential investors through informal discussions about your business, seeking advice on specific challenges
Tactics for engaging potential investors
Host or attend events and engage with investors on social platforms or through thoughtful correspondence
Show genuine interest in feedback and be prepared to discuss your business candidly and knowledgeably
“Why every startup should bootstrap” article
Advantages of bootstrapping
Encourages resourcefulness:
Forces entrepreneurs to get creative and resourceful, utilizing minimal resources to solve problems
Attracts the right talent
Draws in individuals who are willing to invest in the vision of the startup and accept lower initial compensation for potentially higher future rewards
Maintain control
Allows founders to retain control over their company’s direction without the pressure to appease investors
Challenges to bootstrapping
Financial constraints
Limited funds require strict budget management and often mean forgoing traditional marketing or development strategies
Slower growth
Might result in slower initial growth as the company must rely on internally generated funds
Strategy benefits
Cultivates problem solving culture
Bootstrapping creates a culture that can operate efficiently under constraints, which can be a competitive advantage
Enables better future funding
By proving the business model and achieving sustainability, bootstrapped companies can secure more favorable investment terms later
“Startup funding is slowing down…” article
Digital transformation
The pandemic accelerated digital transformation, boosting tech startups initially due to increased investment
High valuations and unrealistic expectations have now led to a market correction
Strategies for adapting
Leveraging AI and no-code tools
These technologies enable rapid prototyping and market validation, helping startups to demonstrate proof of concept and begin building traction early
Minimal viable products (MVPs)
Startups are encourages to focus on MVPs to test market realities with minimal investment, allowing for agile and responsive product development
Advice for startup adaptation
Focus on solving real problems using AI and no -code tools to directly meet target market needs
Integrate customer feedback continuously to align products closely with customer demands
Ensure strategic integration of new technologies into the broader business model to enhance efficiency and reduce time to market
Lecture
Typical sources of funding your startup venture
Bootstrapping & family and friends support
Pitch competitions & grants
accelerators/incubators
Crowdfunding platforms
Angel groups and other funds
Additional sources of support
CDFI loans for hard asset startups
Government grants & loans for R&D focused startups
Local accelerators
Local advisory groups
VS #22
“13 tips on how to deliver a pitch investors simply can’t turn down” article
Practice your pitch:
Repeated practice is crucial
You should be able to deliver your pitch effortlessly and confidently under any circumstance
Simplify your message
Keep the pitch simple and straightforward to ensure that your audience understands your business quickly and clearly
Focus on the problem and solution
Clearly define the problem your business intends to solve and how your solution is unique or better than existing ones
Highlight your team
Emphasize the strengths and capabilities of your team
Investors often bet on the team as much as the idea
Know your audience
Tailor your pitch to fit the interests and backgrounds of the investors
Might involve focusing on different aspects of your business depending on their preferences
Slow traction
Provide evidence of progress, such as customer growth, revenue, or successful case studies, that demonstrate market validation
Be prepared to discuss numbers
Have a solid understanding of your financials, including revenue, profits, projections, and funding needs
Explain market potential
Investors want to know about the market opportunity
Provide clear data on market size, growth potential, and your strategy to capture market share
Discuss competitive advantage
Clearly articulate what sets your product or service apart from competitors
Communicate your vision
Share your long-term vision for the company
Investors are looking for businesses that have the potential to scale and achieve significant returns
Demonstrate passion and commitment
Investors are more likely to back a founder who is committed and passionate about their venture
Handle objections gracefully
Be prepared for skepticism and tough questions
Respond with patience and factual answers
Follow-up
After the pitch, follow up with a thank you note and reiterate the key points of your presentation
“Pitch hook ideas that will get your audience’s attention” article
Understanding your audience
Start by considering the audience’s perspective and background to create a hook that feels personalized and engaging
Understanding what would impress the audience helps in crafting an effective opener
Creating unique hooks
Avoid generic approaches and strive for a hook that is unique to your business
Managing attention spans
Be aware of the typical attention spans during presentations
Use the opening part of your pitch effectively, as it garners the most attention
Importance of storytelling
Incorporate storytelling to maintain audience engagement
Using metaphors and crafting a narrative can significantly enhance the presentation
Interactive questions
Use rhetorical questions as hooks to provoke though and engage the audience from the start
Utilizing humor
Appropriately used humor can serve as an effective hook, making the presentation relatable and easing the atmosphere
Imaginative “what if” scenarios
Employ ‘what if” scenarios to stimulate the audience’s imagination
Helps them visualize the possibilities and benefits offered by your business
Leveraging hard facts
Starting with a compelling fact or historical reference can anchor your presentation and bolter credibility
Using quotes
Can be powerful openers that set the tone for the presentation and resonate with the audience
Considering the entire deck
Success of the pitch depends on every part of the presentation
Lecture
Ways to do a hook
Make an outrageous or provocative claim
Tell a joke
Show a video
Ask a couple questions
Ask a rhetorical questions
Show them an object
Use a quote
Ask “what if..” or “imagine”
Tell a story
Class 24 - financial model + pitch practice
Focus on crafting the ‘story” of your assumptions
Start with: who is your target customer and how many can you realistically get in year 1
A business with NO revenue but $100,000 in the bank
spending/burning $10,000 per month
Runway: 10 months
Dilutive funding (give up some ownership or equity)
Venture capital
Angel investment
Non-dilutive funding (retain full ownership or equity)
Grants
Crowdfunding
Prize money
Bootstrapping
Class 25 - ethics
Timothy kundro: assistant professor of organizational behavior at Kenan-flager
Teaches courses in ethics and organizational behavior
Class 27:
I dont think stuff from this is going to be on exam….
What stuff?^
List of Quiz Questions
(Everyone received different quiz questions, so pasting your questions here with the answer in bold (or pasting a screenshot) is a great way to help others study - separate them by Quiz # and make sure not to post any questions that are already listed) - they said that exact quiz questions will not be on exam but could help to understand concepts
According to the "Design Kit", why is being visual important during brainstorming?
A. Because it helps participants show off their artistic skills
B. Because it can enhance communication and understanding
C. Because it ensures everyone can "speak" at the same time
D. Because having a pre-set visual aid will set important limits on the scope of the creative thinking
According to "Creativity is a Process, Not a Post-It" by Michelle Sucher, why is creativity an ongoing process and not a one-time event?
A. Because it involves waiting for external validation
B Because it only occurs in structured brainstorming sessions that happen often
C. Because it relies on perfection in every attempt
D. Because managing day-to-day tasks limits space for creativity
According to Dr. Land's research, most of us are born with the capacity for genius-level creativity. - True
According to Dr. Land, our proficiency in expressing our creativity gradually drops off as we learn to accept others’ opinions, evaluations, and beliefs.”
None (coaching day)
Quiz 15:
What is NOT cited as a benefit of a conversation partner?
A. They are objective and can see your blind spots
B. View them a key source of future funding
C. They can give you a completely different viewpoint
D. They want the best for you, but have no financial stake
Gabby Brink states than an iterative process allows one to:
A. move through concepts more quickly
B. learn if what they have created is being used by people in their lives
C. gain validation along the way
D. all of the above
In the article "Everyone Pivots: The Truth About A Start-up Pivot", what does MVP stand for?
A. Minimal Viable Product
B. Minimal Valuable Product
C. Most Viable Product
D. Most Valuable Product
Based on the article "Everyone Pivots: The Truth About A Startup Pivot," what is the main takeaway regarding startup pivoting?
Pivoting is a sign of failure and it happens but try to avoid it
Pivoting is a natural and often necessary part of the startup journey
Pivoting indicates poor initial planning and strategy execution
Pivoting should only be considered as a last resort when all other options have been exhausted
What question should you ask yourself before creating your MVP?
A. How much revenue do I need to generate to make a profit?
B. What will my next pivot be?
C. Where is the best location for my product?
D. What is the value I am offering?
Which of the following is one of the criteria for the Solution Lifecycle Framework?
A. Desirability
B. Feasibility
C. Reliability
D. All of the above
Practice exam:
made into quizlet: https://quizlet.com/955248766/econ-125-practice-exam-flash-cards/?i=4mwko4&x=1jqt
1. **Which of the following best represents the difference between entrepreneurial thinking and traditional business practices?**
- A) Entrepreneurial thinking requires starting a business, while traditional practices do not.
- B) Traditional practices focus on innovation, while entrepreneurial thinking avoids risk.
- C) Entrepreneurial thinking involves innovative solutions to novel problems, whereas traditional practices follow established methods.
- D) Traditional business practices are more focused on short-term financial gain than entrepreneurial thinking.
**Correct Answer:** C) Entrepreneurial thinking involves innovative solutions to novel problems, whereas traditional practices follow established methods.
2. **In Drucker's model, why are 'the unexpected' and 'new knowledge' considered the most impactful yet risky areas for opportunity?**
- A) Both often come from external sources beyond the entrepreneur's control.
- B) They require substantial capital investment.
- C) They can both lead to industry-wide disruption but are difficult to forecast or manage.
- D) Entrepreneurs in these areas rarely achieve long-term success.
**Correct Answer:** C) They can both lead to industry-wide disruption but are difficult to forecast or manage.
3. **How does 'incongruity' in Drucker's innovation model help identify opportunities for improvement in an industry?**
- A) It highlights gaps in technological advancement.
- B) It identifies misalignments between what is happening and what is expected, offering opportunities to resolve inefficiencies.
- C) It focuses on changes in consumer behavior.
- D) It promotes completely new product development.
**Correct Answer:** B) It identifies misalignments between what is happening and what is expected, offering opportunities to resolve inefficiencies.
4. **What is a critical challenge entrepreneurs face during the 'informed pessimism' stage, and how can they best overcome it?**
- A) Overconfidence—by slowing down to gather more data.
- B) Lack of resources—by scaling back initial goals.
- C) Realizing unforeseen obstacles—by adjusting strategies and gaining support.
- D) Losing leadership focus—by delegating tasks early.
**Correct Answer:** C) Realizing unforeseen obstacles—by adjusting strategies and gaining support.
5. **Why is psychological safety considered more important than communication in building high-performing teams, according to Google's Project Aristotle?**
- A) It directly influences team trust and openness to new ideas, which enhances communication organically.
- B) Psychological safety improves individual accountability more than communication.
- C) Communication is less important if a team is highly skilled.
- D) Psychological safety reduces the need for team coordination.
**Correct Answer:** A) It directly influences team trust and openness to new ideas, which enhances communication organically.
6. **During the 'storming' phase of team development, what are the best strategies to resolve conflicts and prevent long-term dysfunction?**
- A) Avoiding conflict and focusing on individual tasks.
- B) Establishing clear group norms and encouraging active listening.
- C) Assigning a team leader to take full control of decisions.
- D) Pushing through conflict without addressing it.
**Correct Answer:** B) Establishing clear group norms and encouraging active listening.
7. **Why is it important to engage users from both the average and extreme ends during empathy interviews in design thinking?**
- A) Extreme users can help validate general assumptions.
- B) Engaging a wider range of users leads to product solutions that only serve the majority.
- C) Average users offer less useful insights than extreme users.
- D) Engaging both extremes and the average helps identify diverse needs and challenges, leading to innovative solutions.
**Correct Answer:** D) Engaging both extremes and the average helps identify diverse needs and challenges, leading to innovative solutions.
8. **What is the primary risk of emphasizing 'showing, not telling' in the design thinking process?**
- A) It can slow down the ideation process.
- B) It may lead to incomplete user understanding if the visual representation is not clear.
- C) It discourages verbal communication within teams.
- D) Prototyping too early can lock a team into a single solution path.
**Correct Answer:** B) It may lead to incomplete user understanding if the visual representation is not clear.
9. **In the design thinking process, what is the most common pitfall of the 'define' stage, and how can it be avoided?**
- A) Focusing too much on technology—by involving the end-user early.
- B) Jumping to solutions—by reframing the problem with a clear problem statement.
- C) Not generating enough ideas—by extending the ideation phase.
- D) Misinterpreting user needs—by conducting more user research.
**Correct Answer:** B) Jumping to solutions—by reframing the problem with a clear problem statement.
10. **Why is it recommended to prototype early, even if the solution is not fully defined?**
- A) It allows designers to test aesthetic elements immediately.
- B) Early prototypes help refine ideas through user feedback, preventing costly development mistakes later.
- C) Early prototyping minimizes the risk of team conflicts.
- D) It ensures that the solution is implemented faster.
**Correct Answer:** B) Early prototypes help refine ideas through user feedback, preventing costly development mistakes later.
11. **Which aspect of Doug Dietz's MRI project best illustrates the role of empathy in design thinking?**
- A) Understanding hospital needs for faster imaging results.
- B) Realizing that children were anxious and addressing this through adventure-themed environments.
- C) Creating a prototype that improved scanning efficiency.
- D) Reducing the overall cost of the MRI machine.
**Correct Answer:** B) Realizing that children were anxious and addressing this through adventure-themed environments.
12. **In the context of innovation, why is divergent thinking critical during the ideation phase of design thinking?**
- A) It allows teams to refine ideas early on.
- B) Divergent thinking generates multiple, creative solutions, enabling teams to explore all possibilities before narrowing down.
- C) It encourages judgment and decision-making in early stages.
- D) It limits wild ideas that might not be feasible.
**Correct Answer:** B) Divergent thinking generates multiple, creative solutions, enabling teams to explore all possibilities before narrowing down.
13. **Why is it important to "defer judgment" during brainstorming sessions?**
- A) It keeps the team focused on a single solution.
- B) Premature evaluation can stifle creativity, limiting the number and diversity of ideas generated.
- C) It eliminates impractical ideas early on.
- D) Deferring judgment forces everyone to agree.
**Correct Answer:** B) Premature evaluation can stifle creativity, limiting the number and diversity of ideas generated.
14. **How does the design thinking approach of rapid prototyping reduce overall development costs in a project?**
A) It avoids expensive development technologies by using simpler tools.
B) Rapid prototyping identifies and corrects flaws early, preventing expensive revisions at later stages.
C) It reduces the need for continuous user feedback.
D) It allows for a final polished product earlier than traditional methods.
**Correct Answer:** B) Rapid prototyping identifies and corrects flaws early, preventing expensive revisions at later stages.
15. **What is the main disadvantage of diving into the first good idea when prototyping?**
- - B) It may prevent exploration of better, more innovative ideas that could emerge later.
- C) It creates emotional attachment to the prototype.
- D) It leads to higher development costs.
**Correct Answer:** B) It may prevent exploration of better, more innovative ideas that could emerge later.
16. **In the design thinking process, what does it mean to build with the user in mind, particularly during the prototyping phase?**
- A) Developing a functional product for immediate use.
- B) Creating a prototype based on user feedback and testing, ensuring that it addresses their needs and preferences.
- C) Building based on team assumptions about user needs.
- D) Designing a solution without real-time feedback.
**Correct Answer:** B) Creating a prototype based on user feedback and testing, ensuring that it addresses their needs and preferences.
17. **Why is it important to avoid getting emotionally attached to a prototype in early stages?**
- A) Attachment leads to less team collaboration.
- B) Emotional attachment may prevent designers from pivoting or iterating on the idea, even when user feedback indicates necessary changes.
- C) It slows down the development process.
- D) Emotional attachment leads to budget constraints.
**Correct Answer:** B) Emotional attachment may prevent designers from pivoting or iterating on the idea, even when user feedback indicates necessary changes.
18. **How can the feedback capture grid method improve the prototype testing process?**
- A) It allows teams to quickly implement user suggestions.
- B) It categorizes user feedback into likes, criticisms, questions, and ideas, providing clear areas for improvement and refinement.
- C) It reduces the number of iterations needed.
- D) It limits testing to a single version of the prototype.
**Correct Answer:** B) It categorizes user feedback into likes, criticisms, questions, and ideas, providing clear areas for improvement and refinement.
19. **In the context of design thinking, why is testing with extreme users valuable?**
- A) Extreme users often provide more vocal, actionable feedback that helps uncover design issues that might not be revealed by average users.
- B) It ensures that mainstream users will accept the product.
- C) Extreme users help minimize the need for further iterations.
- D) Extreme users are easier to test with.
**Correct Answer:** A) Extreme users often provide more vocal, actionable feedback that helps uncover design issues that might not be revealed by average users.
20. **What is a significant challenge of testing multiple versions of a prototype with users?**
- A) Users may become overwhelmed with too many options, leading to diluted feedback.
- B) It is difficult to gather consistent feedback across multiple versions.
- C) It increases the overall development cost.
- D) It slows down the design process significantly.
**Correct Answer:** A) Users may become overwhelmed with too many options, leading to diluted feedback.
21. **Why is creating a minimum viable product (MVP) considered a later-stage prototype?**
- A) It provides the final solution.
- B) An MVP focuses on delivering the core features of a solution after earlier prototypes have refined the concept.
- C) It emphasizes aesthetics over functionality.
- D) It minimizes testing phases.
**Correct Answer:** B) An MVP focuses on delivering the core features of a solution after earlier prototypes have refined the concept.
22. **What role does an empathy map play in the design thinking process?**
- A) It clarifies technical requirements.
- B) It helps teams identify unspoken needs and motivations of users, aligning their understanding of the user’s experience.
- C) It provides a detailed timeline for prototyping.
- D) It prioritizes budget allocation for the design process.
**Correct Answer:** B) It helps teams identify unspoken needs and motivations of users, aligning their understanding of the user’s experience.
23. **What common mistake can occur during the 'see' phase of an empathy map?**
- A) Misinterpreting what users say as more important than what they do.
- B) Focusing too much on the user’s environment and missing underlying emotions.
- C) Over-emphasizing user goals at the expense of product features.
- D) Asking users about their future behaviors rather than their current experiences.
**Correct Answer:** B) Focusing too much on the user’s environment and missing underlying emotions.
24. **How does using the 'How Might We' (HMW) framework guide the brainstorming process without limiting creativity?**
- A) It provides clear solutions immediately.
- B) It frames the problem broadly enough to allow for innovative ideas while still keeping the team focused on the core challenge.
- C) It eliminates any need for ideation after the initial framing.
- D) It limits discussions to existing solutions.
**Correct Answer:** B) It frames the problem broadly enough to allow for innovative ideas while still keeping the team focused on the core challenge.
25. **What is the primary benefit of divergent thinking followed by convergent thinking in the ideation phase?**
- A) It generates a high quantity of ideas and quickly filters out impractical ones, balancing creativity with practicality.
- B) It avoids unnecessary prototyping.
- C) Divergent thinking ensures the solution is technically feasible.
- D) Convergent thinking encourages experimentation.
**Correct Answer:** A) It generates a high quantity of ideas and quickly filters out impractical ones, balancing creativity with practicality.
26. **Why is feedback essential in the prototyping phase, and how should it be approached?**
- A) To validate that the prototype is perfect.
- B) Feedback helps identify flaws and areas of improvement, and it should be approached with an open mindset, aiming to refine rather than defend the prototype.
- C) Feedback ensures that the team is aligned with business goals.
- D) Feedback limits the need for further iterations.
**Correct Answer:** B) Feedback helps identify flaws and areas of improvement, and it should be approached with an open mindset, aiming to refine rather than defend the prototype.
27. **How does the investment bias affect prototype development, and what is the best way to counteract it?**
- A) It leads to financial overspending; the best way to counteract it is by budgeting.
- B) Emotional attachment to a prototype can prevent teams from seeing its flaws—counter this by creating cheap and fast iterations early.
- C) It causes teams to spend too little on prototype development.
- D) It encourages teams to create only one version of a prototype.
**Correct Answer:** B) Emotional attachment to a prototype can prevent teams from seeing its flaws—counter this by creating cheap and fast iterations early.
28. **Why is psychological safety key to a successful design thinking process?**
- A) It ensures the team meets deadlines faster.
- B) It fosters a collaborative environment where team members feel safe to share ideas and take risks without fear of judgment.
- C) It minimizes the need for leadership.
- D) It increases technical expertise.
**Correct Answer:** B) It fosters a collaborative environment where team members feel safe to share ideas and take risks without fear of judgment.
29. **How can team charters prevent teams from stalling during the storming phase of development?**
- A) By avoiding all conflicts.
- B) By creating alignment on goals and guidelines for how the team will work together, team charters reduce ambiguity and provide a framework for resolving disputes.
- C) By assigning individual tasks early.
- D) By limiting feedback during early stages.
**Correct Answer:** B) By creating alignment on goals and guidelines for how the team will work together, team charters reduce ambiguity and provide a framework for resolving disputes.
30. **What role does 'group norms' play in ensuring team performance during the 'performing' stage of development?**
- A) Group norms dictate the speed of work.
- B) They help ensure that each team member understands their role, which fosters cohesion and productivity, allowing the team to work without unnecessary conflicts.
- C) Group norms encourage competition.
- D) They reduce the need for leadership intervention.
**Correct Answer:** B) They help ensure that each team member understands their role, which fosters cohesion and productivity, allowing the team to work without unnecessary conflicts.
31. **What distinguishes 'design thinking' as both a mindset and a process?**
- A) It focuses exclusively on prototyping.
- B) Design thinking emphasizes empathy, creativity, and collaboration, and while it involves structured stages, it requires a flexible mindset to adapt to new insights.
- C) It is primarily concerned with meeting financial goals.
- D) It avoids traditional business practices.
**Correct Answer:** B) Design thinking emphasizes empathy, creativity, and collaboration, and while it involves structured stages, it requires a flexible mindset to adapt to new insights.
32. **Why is it essential for teams to engage in 'role play' or 'storyboarding' during the prototyping phase?**
- A) It replaces physical prototypes.
- B) These methods allow teams to visualize the user experience and identify potential pain points or areas for improvement that might not be evident in a
C) It helps prototyping costs.
- D) It speeds up product development.
**Correct Answer:** B) These methods allow teams to visualize the user experience and identify potential pain points or areas for improvement that might not be evident in static models.
33. **What is the greatest advantage of conducting empathy interviews before prototyping?**
- A) It provides a complete solution to the design challenge.
- B) It offers deep insights into users’ needs, allowing teams to create more user-centered prototypes that address actual pain points.
- C) It limits the need for further testing.
- D) It ensures faster development timelines.
**Correct Answer:** B) It offers deep insights into users’ needs, allowing teams to create more user-centered prototypes that address actual pain points.
34. **Why are teams encouraged to continue iterating on prototypes even after successful tests?**
- A) To further reduce production costs.
- B) User feedback can reveal new opportunities for improvement, and continuous iteration helps refine the solution to best fit user needs.
- C) To reach final perfection.
- D) To avoid spending too much time on product launch.
**Correct Answer:** B) User feedback can reveal new opportunities for improvement, and continuous iteration helps refine the solution to best fit user needs.
35. **Why might rapid prototyping fail to produce the desired outcome, and how can this be avoided?**
- A) Focusing too much on speed can lead to skipping critical steps in user feedback—balancing speed with thorough testing ensures valuable insights are not missed.
- B) It encourages emotional attachment to ideas.
- C) It limits the number of iterations.
- D) It produces higher development costs.
**Correct Answer:** A) Focusing too much on speed can lead to skipping critical steps in user feedback—balancing speed with thorough testing ensures valuable insights are not missed.
36. **In design thinking, what distinguishes the 'define' stage from the 'ideate' stage?**
- A) The define stage focuses on identifying the core problem based on user research, while the ideate stage involves brainstorming solutions to the defined problem.
- B) The ideate stage deals only with technical aspects.
- C) The define stage involves prototyping.
- D) The define stage focuses on aesthetic features of the solution.
**Correct Answer:** A) The define stage
focuses on identifying the core problem based on user research, while the ideate stage involves brainstorming solutions to the defined problem.
37. **What role do 'HMW' (How Might We) questions play in the innovation process?**
- A) They narrow the scope of the problem, guiding brainstorming without leading to preconceived solutions.
- B) They solve all problems before prototyping.
- C) They replace the need for brainstorming sessions.
- D) They focus solely on reducing production costs.
**Correct Answer:** A) They narrow the scope of the problem, guiding brainstorming without leading to preconceived solutions.
38. **Why is divergent thinking paired with convergent thinking in brainstorming?**
- A) It eliminates the need for feedback.
- B) Divergent thinking encourages the generation of many ideas, while convergent thinking helps filter and refine them into feasible solutions.
- C) It speeds up product development.
- D) It eliminates unnecessary ideas early.
**Correct Answer:** B) Divergent thinking encourages the generation of many ideas, while convergent thinking helps filter and refine them into feasible solutions.
39. **Why is it beneficial to involve cross-functional teams during the prototyping phase?**
- A) It speeds up testing.
- B) Different expertise leads to more well-rounded solutions, addressing various aspects of user needs and technical feasibility.
- C) Cross-functional teams reduce testing time.
- D) It eliminates the need for user feedback.
**Correct Answer:** B) Different expertise leads to more well-rounded solutions, addressing various aspects of user needs and technical feasibility.
40. **What is the key distinction between prototyping and MVP development?**
- A) Prototyping is part of the ideation phase, while MVP development focuses on delivering a viable product with core features.
- B) MVP development eliminates the need for prototypes.
- C) Prototyping is only about aesthetics.
- D) MVP development is done before prototyping.
**Correct Answer:** A) Prototyping is part of the ideation phase, while MVP development focuses on delivering a viable product with core features.
41. **How does empathy influence the early stages of design thinking?**
- A) It ensures faster prototyping.
- B) Empathy allows designers to understand users’ needs, frustrations, and desires, leading to more relevant and human-centered solutions.
- C) It eliminates technical challenges.
- D) Empathy speeds up user feedback.
**Correct Answer:** B) Empathy allows designers to understand users’ needs, frustrations, and desires, leading to more relevant and human-centered solutions.
42. **What is a significant challenge of rapid iteration during prototyping?**
- A) It leads to cost overruns.
- B) It can cause teams to overlook deeper, underlying issues that require more time to surface and address.
- C) It eliminates user testing.
- D) Rapid iteration slows down product development.
**Correct Answer:** B) It can cause teams to overlook deeper, underlying issues that require more time to surface and address.
43. **How does prototyping help validate assumptions made during the 'ideate' phase?**
- A) Prototypes provide tangible representations of ideas, allowing teams to gather user feedback and validate or invalidate their assumptions.
- B) Prototypes speed up product launch.
- C) Prototyping reduces the need for ideation.
- D) It eliminates technical errors.
**Correct Answer:** A) Prototypes provide tangible representations of ideas, allowing teams to gather user feedback and validate or invalidate their assumptions.
44. **Why is it important to avoid relying solely on assumptions during the design thinking process?**
- A) Assumptions increase the need for more iterations.
- B) Assumptions can lead to products that do not fully address user needs, which is why continuous user feedback and testing are necessary.
- C) Assumptions speed up the design process.
- D) Assumptions lead to higher development costs.
**Correct Answer:** B) Assumptions can lead to products that do not fully address user needs, which is why continuous user feedback and testing are necessary.
45. **What is a common pitfall in the testing phase of design thinking, and how can it be addressed?**
- A) Testing too many versions—by focusing on a single prototype.
- B) Ignoring negative feedback—by remaining neutral and open to all feedback, both positive and negative, during testing.
- C) Testing with extreme users—by only involving mainstream users.
- D) Limiting feedback to aesthetic issues.
**Correct Answer:** B) Ignoring negative feedback—by remaining neutral and open to all feedback, both positive and negative, during testing.
46. **Why is it recommended to test in pairs during the prototyping phase?**
- A) It speeds up testing.
- B) Testing in pairs allows for better observation and interpretation of user behavior, ensuring no key insights are missed.
- C) It limits user interaction.
- D) Testing in pairs reduces costs.
**Correct Answer:** B) Testing in pairs allows for better observation and interpretation of user behavior, ensuring no key insights are missed.
47. **Why is the 'I Like, I Wish, What If' method particularly useful during prototype testing?**
- A) It provides structured feedback that encourages users to express both positive and critical thoughts, leading to actionable insights.
- B) It eliminates negative feedback.
- C) It limits user interaction.
- D) It focuses solely on technical features.
**Correct Answer:** A) It provides structured feedback that encourages users to express both positive and critical thoughts, leading to actionable insights.
48. **How does prototyping with a bias toward action influence the design process?**
- A) It speeds up product launch.
- B) Prototyping with a bias toward action encourages teams to create tangible solutions quickly, learning through doing rather than waiting for perfect solutions.
- C) It limits testing.
- D) It eliminates the need for ideation.
**Correct Answer:** B) Prototyping with a bias toward action encourages teams to create tangible solutions quickly, learning through doing rather than waiting for perfect solutions.
49. **What is a critical reason for conducting empathy interviews throughout the design process, rather than just at the beginning?**
- A) To validate the product before launch.
- B) User needs and experiences can evolve, and conducting empathy interviews at various stages helps ensure the solution remains relevant and user-centered.
- C) It speeds up testing.
- D) It reduces prototyping costs.
**Correct Answer:** B) User needs and experiences can evolve, and conducting empathy interviews at various stages helps ensure the solution remains relevant and user-centered.
50. **How do group norms established during the 'norming' phase contribute to team performance in later stages?**
- A) They eliminate the need for leadership.
- B) Group norms clarify roles and expectations, leading to smoother collaboration and higher performance in later stages, such as 'performing.'
- C) They speed up product development.x
- D) Group norms focus solely on reducing conflicts.
**Correct Answer:** B) Group norms clarify roles and expectations, leading to smoother collaboration and higher performance in later stages, such as 'performing.'
NoteStudied by 8 peopleNoteStudied by 14 peopleNoteStudied by 23 peopleNoteStudied by 32 peopleNoteStudied by 11 peopleNoteStudied by 24 people