BUS 270 EXAM #2 QUESTIONS WITH VERIFIED ANSWERS
What is a startup? - Answers - A startup is a temporary organization in search of a
scalable, repeatable, business model
What are the types of startups? - Answers - Scalable startup- rapidly growing with a
repeatable and predictable business model
"Buyable" startup- startups purchased by larger companies in order to acquire the talent
as much as the business itself
What are the risks startups face? - Answers - Invention risk- it is unknown whether or
not the product will even work. "Can we do it?"
Customer/market risk- it is unknown if a market exists or if customers will adopt the
product. "Do they want it?"
What are the two kinds of innovation? - Answers - Sustaining innovation (evolutionary
products): Offering variants of core products. Ex: New iPhones after another.
Disruptive innovation (revolutionary products): Introducing new products to new markets
with new customers. Ex: First iPhone ever.
What are the stages of the Customer Development Process? - Answers - Customer
Discovery→Customer Validation→Customer Creation→Company Building
What are the 4 frameworks for validating a business idea? - Answers - 1. Strength of
Business Idea
2. Industry-Related Issues
3. Target Market and Customer-Related Issues
4. Founder-Related Issues
5. Financial Issues
What is the Perceived Value formula? - Answers - Perceived Value = Perceived
Benefits / Perceived Costs
How do customers perceive value? - Answers - In 4 ways:
1. Functional- Reliable, easy to use, mets expectations such as good quality
2. Social- Offers a certain image such a superiority
3. Emotional- Changes mood, satisfies them, provides connection
4. Epistemic- Novelty and satisfies curiosity
What are the categories of customer needs/passions? - Answers - 1. Latent problems:
they don't know they have them yet.
What is a startup? - Answers - A startup is a temporary organization in search of a
scalable, repeatable, business model
What are the types of startups? - Answers - Scalable startup- rapidly growing with a
repeatable and predictable business model
"Buyable" startup- startups purchased by larger companies in order to acquire the talent
as much as the business itself
What are the risks startups face? - Answers - Invention risk- it is unknown whether or
not the product will even work. "Can we do it?"
Customer/market risk- it is unknown if a market exists or if customers will adopt the
product. "Do they want it?"
What are the two kinds of innovation? - Answers - Sustaining innovation (evolutionary
products): Offering variants of core products. Ex: New iPhones after another.
Disruptive innovation (revolutionary products): Introducing new products to new markets
with new customers. Ex: First iPhone ever.
What are the stages of the Customer Development Process? - Answers - Customer
Discovery→Customer Validation→Customer Creation→Company Building
What are the 4 frameworks for validating a business idea? - Answers - 1. Strength of
Business Idea
2. Industry-Related Issues
3. Target Market and Customer-Related Issues
4. Founder-Related Issues
5. Financial Issues
What is the Perceived Value formula? - Answers - Perceived Value = Perceived
Benefits / Perceived Costs
How do customers perceive value? - Answers - In 4 ways:
1. Functional- Reliable, easy to use, mets expectations such as good quality
2. Social- Offers a certain image such a superiority
3. Emotional- Changes mood, satisfies them, provides connection
4. Epistemic- Novelty and satisfies curiosity
What are the categories of customer needs/passions? - Answers - 1. Latent problems:
they don't know they have them yet.
