MHR 322 Detailed Final Exam Module 1 2025

What are some reasons why good innovations don't always succeed? - - -resource scarcity (Not all innovations can be supported; entrepreneurs must compete for scarce resources, including limited time) -initial conditions (The outcome (winners) depend in part on initial conditions) -path dependence (The outcome (winners) may be determined by the order in which interactions take place) -non-equifinality (Even given the same initial conditions and paths, it's possible for outcomes to be affected by completely unrelated factors) -legitimacy effects (Sometimes ideas are selected because they are associated with people perceived to be successful or legitimate) -opportunity recognition (Innovation and opportunities are influenced by prior experience) -entrepreneurial agency (Innovation quality may be important, but survival may be determined by the characteristics of the innovator) -network effects (The survival of ideas may be driven by whether the innovator can assemble and leverage a team, and how well the team networks in the target industry) -innovation affinity (Inventors may become emotionally attached to their own innovation very quickly, which may then inhibit rational or objective evaluation) When is better not good enough? - - -when a change in customer behavior is required -when there are existing standards in place -when customers have to be educated to appreciate new value. -when the sales process must address complex customers (economic buyer, end-user, champion, influencer) -when customers have a sufficient level of happiness with their current options resulting in disproportionately high search costs. What are some reasons to become an entrepreneur? - - -get rich -change the world -work less -be your own boss -wanted to try it -you have an insight What pros/cons do entrepreneurs report? - - -Work more hours -Take less vacation -Earn less money over their career MHR 322 MHR 322 -Experience more stress and failure -Report higher job and life satisfaction -Make their own choices about work habits -Take more pride in their accomplishments What are traits of people more likely to become entrepreneurs? - --Greater self-esteem -Need for achievement & independence -Good on learning aptitude tests (GPA not so much) -Comfortable with calculated risk-taking (prepared for it, not risk-tolerant) -Innovativeness / Creativity -Optimistic -THERE IS NOT ONE TYPE OF ENTREPRENEUR -these characteristics do not mean you will be successful automatically What are socioeconomic factors of entrepreneurship? - - -undeveloped countries are where the highest levels of entrepreneurship are found—because there are not a lot of jobs, known as necessity-driven entrepreneurship vs opportunity-driven entrepreneurship -high income=less likely -no job=more likely -personal wealth effect: have money but don't have to work=more likely -parents' wealth effect: wealthy parents=more likely What are educational drivers of entrepreneurship? - --majority have NOT finished college -educational attainment is NOT a driver, the more education you have the more likely you are to get a job and not be an entrepreneur What are immigrant drivers of entrepreneurship? - - -"Immigrants are almost twice as likely to start businesses in the United States as native-born Americans" "25% of US technology & engineering companies created between 2006-10 were founded by foreign-born entrepreneurs" -28.5 percent of new entrepreneurs in 2014 were immigrants -24 of the top 50 venture-backed companies in America in 2011 had at least one foreign-born founder. What are nature vs. nurture drivers of entrepreneurship? - --Some people are more entrepreneurial from a young age -If your parents are entrepreneurial, you are much more likely to be one too -no gene What effect does prior experience have on entrepreneurship? - --Entrepreneurial experience, work experience and management experience all make you more likely to be an entrepreneur MHR 322 MHR 322 What effect does age have on entrepreneurship? - --age does matter! -Up to a point (60), the older you are the more likely you are to be successful -Being young is not an indicator of success, older entrepreneurs are more likely to succeed up until late 50s What are pros and cons of a student start-up? - --Pros: stamina, poverty (nothing to lose), flexibility, colleagues surrounding you, ignorance (no idea what you're getting in to) -Cons: less market knowledge, limited capital (poor), less dedication since still a student (you can quit if it doesn't go well and be fine) What do parents say about students dropping out of school to found start-ups? - - Default answer should just be no -Financial downsides are large -If you can test quickly and know if it'll work very quickly, it could work -Do you really love the idea or do you just not like school? -You need to confirm if your idea actually makes sense (talk to investors, paying customers) -Set deadline with milestones and be willing to return to school if it doesn't work out after a certain point What is a trait of the best entrepreneurs? - --they are both determined/confident AND willing to be wrong What is the student's guide to startups article about? - --if you're not certain, you should wait -advantage is mobility/rootlessness, surrounded by students willing to try, ignorance helps -you should try working at a startup first -flaw is that you build things that look like class projects (lack iterative definition of a real problem and intensity, customers are much harsher) -older people don't flake on things -older people realize that getting rich means you can stop working so hard and "treading water" Where is the best place to learn how to become a successful entrepreneur, according to the reading? - --a CPG firm -learn to develop and pitch ideas -rewarded for smart risk-taking -forces you to think about multiple business problems at once -network of talented leaders for you What is design your way to a happier life about? - --designers know that there is no one solution for ill-defined problems. We take a hands-on approach, first understanding a situation deeply through close observation, then trying out quick prototypes of multiple MHR 322 MHR 322 ideas to learn what can actually work. The key is to try lots of ideas, take action and learn by doing. Designers don't think their way forward; they build their way forward. -you don't need to know your passion early in life, just keep trying prototype by prototype What is "what can entrepreneurs teach us about life" about? - --it's important to remind ourselves from time to time that we have much to gain by taking on that challenge. -That is exactly why an entrepreneurial outlook on life is essential. We can always ask "Why?" of any aspect of our lives. We can imagine alternatives, experiment and commit to finding the best new way. -The same is true in the game of life. It's important to cultivate our ability to think about the basic rules and assumptions: Which can be changed? Which could or should be broken? As a personal experiment, invent a variation on basketball or another sport. If you play card games on the weekend, change a rule and see what happens. -take risks and change things up Carol Bartz video: It's about loving what you do - --It's about loving what you do, she started programming because she genuinely loved it -Make sure what you're doing is something you actually like and combine it with your willingness to take risks and change and be flexible David Friedberg Video: most entrepreneurs are not rock stars - -· most entrepreneurs are not rock stars/amazingly successful · opportunity cost of doing a startup is very high, the reason for being an entrepreneur should NOT be for making money, because you're actually better off going to a regular job then · at a big company there can be a misalignment problem with your perspective and their perspective, your personal ambitions and ideas will not always be in alignment with the big company · also the large scale of a big company can actually restrict the ability for it to make decisions Dr. Bock Video - --management mindset: o you have a set of resources available to you based on the current state o you have clear goals to achieve incrementally o the challenge is to find the most effective/efficient path linking the resources to the goal -entrepreneurial mindset: o opportunities arise from uncertainty o resources can be acquired/assembled o the challenge is to utilize a flexible, adaptive process to simultaneously explore possible goals and paths to those goals o we suspect people want something, so we have to find out if this is true AND how we would actually make that happen MHR 322 MHR 322 -necessity-driven entrepreneurship: when you can't get a job for some reason, you are required to take up entrepreneurship, think immigrants -opportunity-driven entrepreneurship: doing it because you found an opportunity and you wanted to pursue it, this is the situation we are mostly in -entrepreneurship is the practice itself; it is a skill that can be partly taught