,Chapter 1: The Entrepreneur in Context
MULTIPLE CHOICE
1. From the text, what term did Steve Blank use when describing firms that were small at
startup but were designed to become very large, very quickly?
a. scalable startups
b. explosive startups
c. mom and pop startups
d. balloon startup
ANS: A DIF: Easy
2. What is specific to scalable startups?
a. They are always profitable for both investors and entrepreneurs.
b. They always offer their investors an “exit strategy” to retrieve their funds.
c. They start out small and grow at a slow, sustainable rate.
d. They always receive funds from at least four unrelated investors.
ANS: B DIF: Moderate
3. How often do Main Street investors utilize outside investors?
a. always
b. most of the time
c. usually
d. rarely
ANS: D DIF: Moderate
4. An organic growth business is a
a. company that was able to startup with the help of investors and can scale at a steady pace.
b. business that does not utilize outside investors and is able to grow and scale rapidly and
can quickly move to be defined as a big business.
c. business that can stay relatively small through reinvestments that promote and fund their
growth.
d. business that spreads across multiple regions at a slow pace with the assistance of outside
investors and their funding.
ANS: C DIF: Moderate
5. What is NOT true of “Buyable Startups”?
,a. They are usually organically grown for years before being purchased.
b. They are often software startups.
c. They are often purchased before generating revenues.
d. They are very likely to succeed.
ANS: A DIF: Easy
6. Are startups always easy to categorize?
a. Yes, because their initial structure prevents changes.
b. Yes, because only “big businesses” are difficult to categorize.
c. No; most businesses fit multiple categories, and the lines between categories are very
unclear.
d. No; a few businesses cross categories, and the lines between categories are somewhat
permeable.
ANS: D DIF: Easy
7. What is the most important factor of success for a franchise?
a. the nature of the product or service
b. the way the franchisor and its model fit the market
c. the franchise purchase price and fees
d. the total count of other franchise locations
ANS: B DIF Easy
8. Which of the following would NOT be a positive sign when evaluating a franchise
opportunity?
a. the business model promoted by the franchisor
b. clearly defined and stable products, branding, and marketing
c. the ability of the franchisor to adapt to changes in consumer tastes
d. significant autonomy in product choices, branding, and market by various franchisees
ANS: D DIF: Moderate
9. What was at the core of Blockbuster’s collapse?
a. the quality of service
b. the proximity of stores to consumers
c. the affordability of services
d. the change in consumers’ tastes
ANS: D DIF: Easy
, 10. This business is defined by the way it reinvests its profits into itself:
a. the buyable startup
b. the organic-growth small business
c. the rapid growth startup
d. corporate entrepreneurship
ANS: B DIF: Easy
11. Which startup category is primarily designed to demonstrate the viability of a technology,
product, or service?
a. the buyable startup
b. the organic-growth small business
c. the rapid growth startup
d. corporate entrepreneurship
ANS: A DIF: Easy
12. A firm that changes from one category of startup to another is referred to as a:
a. shifter
b. fusion firm
c. changeling
d. parallel business
ANS: A DIF: Easy
13. A downside to launching a virtual business is:
a. high startup costs
b. complex logistics
c. high barriers to entry
d. too many competitors
ANS: D DIF: Easy
14. The text recommends that an entrepreneur should:
a. never take their eye off profits
b. eat well and get exercise
c. try several different businesses before settling down
d. skip sleep and work more
MULTIPLE CHOICE
1. From the text, what term did Steve Blank use when describing firms that were small at
startup but were designed to become very large, very quickly?
a. scalable startups
b. explosive startups
c. mom and pop startups
d. balloon startup
ANS: A DIF: Easy
2. What is specific to scalable startups?
a. They are always profitable for both investors and entrepreneurs.
b. They always offer their investors an “exit strategy” to retrieve their funds.
c. They start out small and grow at a slow, sustainable rate.
d. They always receive funds from at least four unrelated investors.
ANS: B DIF: Moderate
3. How often do Main Street investors utilize outside investors?
a. always
b. most of the time
c. usually
d. rarely
ANS: D DIF: Moderate
4. An organic growth business is a
a. company that was able to startup with the help of investors and can scale at a steady pace.
b. business that does not utilize outside investors and is able to grow and scale rapidly and
can quickly move to be defined as a big business.
c. business that can stay relatively small through reinvestments that promote and fund their
growth.
d. business that spreads across multiple regions at a slow pace with the assistance of outside
investors and their funding.
ANS: C DIF: Moderate
5. What is NOT true of “Buyable Startups”?
,a. They are usually organically grown for years before being purchased.
b. They are often software startups.
c. They are often purchased before generating revenues.
d. They are very likely to succeed.
ANS: A DIF: Easy
6. Are startups always easy to categorize?
a. Yes, because their initial structure prevents changes.
b. Yes, because only “big businesses” are difficult to categorize.
c. No; most businesses fit multiple categories, and the lines between categories are very
unclear.
d. No; a few businesses cross categories, and the lines between categories are somewhat
permeable.
ANS: D DIF: Easy
7. What is the most important factor of success for a franchise?
a. the nature of the product or service
b. the way the franchisor and its model fit the market
c. the franchise purchase price and fees
d. the total count of other franchise locations
ANS: B DIF Easy
8. Which of the following would NOT be a positive sign when evaluating a franchise
opportunity?
a. the business model promoted by the franchisor
b. clearly defined and stable products, branding, and marketing
c. the ability of the franchisor to adapt to changes in consumer tastes
d. significant autonomy in product choices, branding, and market by various franchisees
ANS: D DIF: Moderate
9. What was at the core of Blockbuster’s collapse?
a. the quality of service
b. the proximity of stores to consumers
c. the affordability of services
d. the change in consumers’ tastes
ANS: D DIF: Easy
, 10. This business is defined by the way it reinvests its profits into itself:
a. the buyable startup
b. the organic-growth small business
c. the rapid growth startup
d. corporate entrepreneurship
ANS: B DIF: Easy
11. Which startup category is primarily designed to demonstrate the viability of a technology,
product, or service?
a. the buyable startup
b. the organic-growth small business
c. the rapid growth startup
d. corporate entrepreneurship
ANS: A DIF: Easy
12. A firm that changes from one category of startup to another is referred to as a:
a. shifter
b. fusion firm
c. changeling
d. parallel business
ANS: A DIF: Easy
13. A downside to launching a virtual business is:
a. high startup costs
b. complex logistics
c. high barriers to entry
d. too many competitors
ANS: D DIF: Easy
14. The text recommends that an entrepreneur should:
a. never take their eye off profits
b. eat well and get exercise
c. try several different businesses before settling down
d. skip sleep and work more
