Q&A Hero

Q: ________ is the process of generating a novel or useful idea. A) Innovation B) Imagining C) Creativity D) Visualization E) Envisioning

Q: According to research in this area, it is more likely that an entrepreneur will get a new business idea through a ________ relationship than the alternatives. A) weak-tie B) moderate-tie C) vertical-tie D) lateral-tie E) strong-tie

Q: Alex has a number of casual acquaintances that he interacts with infrequently. The relationships that Alex has with these people are referred to as ________ relationships. A) strong-tie B) moderate-tie C) lateral-tie D) weak-tie E) multiple-tie

Q: Most of Sarah's ideas come from interacting with coworkers, friends, her spouse, her parents, and other people that share the same beliefs that she does. Sarah is getting most of her ideas through ________ relationships. A) weak-tie B) horizontal-tie C) strong-tie D) multiple-tie E) vertical-tie

Q: ________ relationships are characterized by frequent interactions that form between coworkers, friends, and spouses. A) Balanced B) Weak-tie C) Lateral-tie D) Moderate-tie E) Strong-tie

Q: A solo entrepreneur is an individual who identified his or her business idea ________. A network entrepreneur is an individual who identified his or her business idea ________. A) through social contacts; on their own B) through a business incubator program; through social contacts C) on their own; through social contacts D) through the assistance of a paid consultant; through social contacts E) with one or more partners; on their own

Q: A network entrepreneur is an individual who identifies his or her business idea ________. A) on their own B) through the assistance of a paid consultant C) through social contacts D) with one or more partners E) through a business incubator program

Q: An individual who identifies a business idea on his or her own is referred to as a(n) ________ entrepreneur. A) separate B) functional C) lone D) individual E) solo

Q: According to the textbook, research results over time consistently suggest that somewhere between ________ percent of those who start businesses got their ideas through social contacts. A) 10 and 20 B) 20 and 30 C) 30 and 40 D) 40 and 50 E) 50 and 60

Q: Which of the following statements is incorrect in regard to entrepreneurial alertness? A) The research findings on entrepreneurial alertness are conclusive. B) Alertness is largely a learned skill. C) People who have more knowledge of an area tend to be more alert to opportunities in that area than others. D) The term "entrepreneurial alertness" is often associated with a "sixth sense" that seems to allow some people to see opportunities that others miss. E) Entrepreneurial alertness is defined as the ability to notice things without engaging in deliberate search.

Q: Kelly Pryor, who has launched several successful entrepreneurial firms, seems to have a "sixth sense" that allows him to see opportunities that others miss. Kelly's ability is referred to as _________. A) individual awareness B) cognitive alertness C) entrepreneurial alertness D) individual readiness E) cognitive readiness

Q: The ability to notice things without engaging in deliberate search is referred to as ________. A) cognitive alertness B) cognitive awareness C) managerial alertness D) entrepreneurial alertness E) individual awareness

Q: Which of the following statements is incorrect regarding the personal characteristics of entrepreneurs? A) Some people think that entrepreneurs have a "sixth sense" that allows them to see opportunities that others miss. B) The extent and depth of an individual's social network affects opportunity recognition. C) Several studies show that prior experience in an industry actually blinds an entrepreneur to the recognition of new opportunities in the same industry. D) Creativity is the process of generating novel or useful ideas. E) The corridor principle states that once an entrepreneur starts a firm, he or she begins a journey down a path where "corridors" leading to new venture opportunities become apparent.

Q: The What Wrong feature in Chapter 2 focuses on Everpix, a company that enabled users to organize and store photos online in an innovative manner. Regrettably, Everpix failed. According to the feature, Everpix's failure resulted from that fact that it's founders ________. A) spent too much time and energy perfecting their service at the expense of building a business B) spent too much time and energy raising money at the expense of perfecting their service C) spent too much time networking at the expense of building a business D) spent too much time marketing their product at the expense of perfecting their service E) spent too much time analyzing their market at the expense of networking

Q: Describe the three separate ways that entrepreneurs identify new business, product, and service opportunities?

Q: Aging of the population, the increasing diversity of the workplace, and the continual migration of people from small towns and rural areas to cities are important economic trends.

Q: Many new businesses are successful by taking advantage of fads.

Q: Economic factors, social factors, technological advances, and political action and regulatory changes are the most important trends to follow in trying to identify opportunities.

Q: The three ways to identify an opportunity include observing trends, solving a problem, and finding gaps in the marketplace.

Q: A common way that gaps in the marketplace are recognized is ________. A) by observing changing environmental trends B) by recognizing problems that need to be solved C) via studying industry reports D) when people become frustrated because they can't find a product or service that they need and recognize that other people feel the same way E) via combined focus groups and brainstorming sessions

Q: In 2000, Tish Cirovolo realized that there were no guitars on the market made specifically for women. As a result, she started Daisy Rock Guitars, a company that makes guitars just for women. Daisy Rock Guitars are stylish and come in feminine colors, and incorporate design features that accommodate a woman's smaller hand and build. The best way to describe how Cirovolo's business idea was recognized is ________. A) brainstorming B) talking to consumers C) reading industry reports D) observing trends E) finding a gap in the marketplace

Q: Clothing boutiques and specialty shops often start because there is a need for a particular product, but large retailers like Wal-Mart and Costco can't sell enough of the item to stock it on their shelves. If a clothing boutique started to sell designer clothes or clothing for hard-to-fit people because the clothing wasn't being offered by a larger retailer, the best way to describe how that idea was recognized is ________. A) finding a gap in the marketplace B) brainstorming C) observing trends D) solving a problem E) talking to consumers

Q: Casey Griggs is a very capable computer engineer. Recently, he noticed a problem that computer engineers have, and thought of a solution to the problem that might represent an opportunity for a new software product. Casey's idea for a new software product is an example of a(n) ________ discovery. A) chance B) serendipitous C) traditional D) conventional E) opportune

Q: The Savvy Entrepreneurial Firm feature in Chapter 2 focuses on a technique through which entrepreneurs can learn about emerging trends. The technique focused on in the chapter is ________. A) online databases B) newspapers and magazines C) targeted Internet searches D) social media E) radio and television

Q: SafetyWeb is a Web-based service that helps parents protect their children's online reputation, privacy, and safety. Which of the following approaches to identifying an opportunity was most likely the impetus for SafetyWeb? A) Observing trends B) Studying government reports C) Finding gaps in the marketplace D) Talking to consumers E) Solving a problem

Q: If a new firm was launched to help businesses comply with The Affordable Care Act, that opportunity was created by ________. A) changes in economic forces B) demographic changes C) changes in social forces D) changes in technological forces E) political actions and regulatory changes

Q: Hulu.com allows people to watch television shows and movies on the Internet. Hulu.com's business opportunity was made possible by ________ that enhanced the ability of television shows and movies to be uploaded to the Internet and played by anyone with a suitable computer and an Internet connection. A) social forces B) technological advances C) legal changes D) regulatory changes E) economic forces

Q: The increasing number of social networks on the Internet is attributed to a jump in the number of people who are wanting to connect with one another online. The increasing number of social networks is an important ________ trend. A) political B) economic C) legal D) social E) demographic

Q: An increased focus on health and wellness has resulted in a number of new business ideas including healthier foods and beverages, yoga instruction and training centers, and nutrition consulting. An increased focus on health and wellness is an important ________ that is creating opportunities in many areas for entrepreneurial firms. A) economic force B) regulatory force C) legal force D) technological advances E) social force

Q: Which of the following is not an example of a social force? A) Changes in interest rates B) Increasing participation in social networks C) Increasing diversity of the workplace D) Aging of the population E) Continual migration of people from small towns and rural areas to cities

Q: Economic forces impact the opportunities available to entrepreneurs. Which of the following alternatives reflects a set of economic forces that would be of interest to entrepreneurs? A) Level of disposable income, new uses of old technologies, and new laws and regulations B) New technologies, consumer spending patterns, and new laws C) Interest rates, consumer spending patterns, and level of disposable income D) Social and cultural trends, level of interest rates, and what people think is "in" E) New changes in political areas, new laws, and level of disposable income

Q: GasBuddy and GasPriceWatch.com are companies started to help consumers save money on gas. Which environmental trend is most likely to have provided the impetus for the creation of these companies? A) Regulatory changes B) Political changes C) Economic forces D) Technological advances E) Social forces

Q: The three ways to identify an opportunity include ________. A) observing trends, solving a problem, and finding gaps in the marketplace B) studying industry trade journals, talking to consumers, and solving a problem C) observing trends, conducting brainstorming sessions, and studying industry trade journals D) observing trends, talking to consumers, and finding gaps in the marketplace E) reading books, solving a problem, and findings gaps in the marketplace

Q: Describe the difference between an idea and an opportunity. Why is the distinction important?

Q: An idea is a thought, impression, or notion. It may or may not meet the criteria of an opportunity.

Q: The term "window of opportunity" is a metaphor describing the time period in which a firm can realistically raise money.

Q: An opportunity has four essential qualities. It is (1) rare, (2) attractive, (3) timely, and (4) anchored in a product, service, or business that creates or adds value for its buyer or end user.

Q: An idea is a favorable set of circumstances that creates a need for a new product, service, or business.

Q: Jessica Smith is thinking about starting a chain of fitness centers for young adults ages 18-30. Which of the following is not an appropriate criterion for Jessica to test her idea against? A) Determine whether the "window of opportunity" is open. B) Determine whether a fitness center for young adults ages 18-30 meets the threshold of being a good idea. C) Determine the extent to which the notion takes advantage of an environmental trend, solves a problem, or fills a gap in the marketplace. D) Determine whether opening a fitness center for young adults ages 18-30 is timely. E) Determine whether opening a fitness center for young adults ages 18-30 is a concept that creates value for its buyer or end user.

Q: A(n) ________ is a favorable set of circumstances that creates the need for a new product, service, or business. A(n) ________ is a thought, an impression or a notion. A) scheme, notion B) opportunity, idea C) idea, design D) idea, opportunity E) notion, scheme

Q: Which of the following is correct regarding opportunities and ideas? A) An opportunity and an idea are essentially the same thing. B) An idea almost always meets the criteria of an opportunity. C) An opportunity is a thought, an impression, or a notion. D) An idea is a favorable set of circumstances that creates a need for a new product, service, or business. E) It's important to discern whether a particular idea meets the criteria for an opportunity.

Q: The term "window of opportunity," as discussed in Chapter 2, is a metaphor that describes the time period in which a firm can ________. A) obtain funding or financing B) hire new employees C) complete a financial analysis D) realistically enter a new market E) write a business plan

Q: Brad Johnson is starting an upscale men's clothing store in a mall near Seattle. He wants to open his store during the time period in which a business like his can realistically enter the new market. Brad is trying to open his business while the ________ is open. A) safe harbor B) window of opportunity C) portal of entry D) doorway of opportunity E) safety zone

Q: An opportunity has the following four essential qualities ________. A) attractive; timely; durable; and anchored in a product, service, or business that creates or adds value for its buyer or end user B) practical; opportune; appropriate; and anchored in a product, service, or business that is efficient and effective C) realistic; striking; timely; and anchored in a product, service, or business that is timely D) attention-getting; attractive; timely; and anchored in a product, service, or business that creates or adds value for its buyer or end user E) attractive, durable, resilient, and opportune

Q: According to the textbook, opportunities are ________. A) easy to spot B) easy to spot in fast growing industries, but tough to spot in slow growing industries C) easy to spot in the manufacturing sector, but tough to spot in the service sector D) tough to spot E) neither easy nor tough to spot

Q: A(n) ________ is a favorable set of circumstances that creates a need for a new product, service, or business. A) idea B) scheme C) design D) proposal E) opportunity

Q: iCracked, the company profiled in the opening feature of Chapter 2, was started by AJ Forsythe and Anthony Martin, two California college students. Through personal experiences, the two discovered that an opportunity existed to start a company that would ________. A) repair computer printers inexpensively and conveniently B) repair used automobiles inexpensively and conveniently C) repair broken items (e.g., furniture and appliances) in college dorm rooms and apartments inexpensively and conveniently D) repair laptop computers inexpensively and conveniently E) repair iPhones inexpensively and conveniently

Q: The entrepreneurial process consists of four steps: deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, and divesting or selling the entrepreneurial firm.

Q: A firm's ________ is a plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the value it creates. A) business plan B) business model C) tactical model D) strategic plan E) operations model

Q: A(n) ________ is a written document that describes all the aspects of a business venture in a concise manner. A) business plan B) business model C) operations plan D) corporate plan E) contingency plan

Q: Jan Berry recently received a $500,000 inheritance from her maternal grandmother. Jan decided to use the money to start a business. According to the textbook, the inheritance that Jan received was the ________ that prompted her to start a business. A) prompting event B) entrepreneurial prompt C) initiating event D) triggering event E) kick-off event

Q: An event that prompts an individual to become an entrepreneur, such as losing a job, inheriting money, or accommodating a certain lifestyle, is referred to as a(n) ________. A) prompting event B) entrepreneurial prompt C) initiating event D) triggering event E) kick-off event

Q: Which of the following is not one of the four steps of the entrepreneurial process? A) Deciding to become an entrepreneur B) Determining how to seize the spotlight C) Developing successful business ideas D) Moving from an idea to an entrepreneurial firm E) Managing and growing the entrepreneurial firm

Q: Which of the following is the correct sequence for the four steps in the entrepreneurial process? A) Deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, managing the growing entrepreneurial firm B) Developing successful business ideas, deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, managing and growing the entrepreneurial firm C) Developing successful business ideas, moving from an idea to an entrepreneurial firm, deciding to become an entrepreneur, managing and growing the entrepreneurial firm D) Deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, developing successful business ideas, managing and growing the entrepreneurial firm E) Managing and growing the entrepreneurial firm, developing successful business ideas, deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm

Q: Identify and discuss the three primary reasons that entrepreneurial behavior has a strong impact on the United States economy.

Q: Small businesses outperform their larger counterparts in terms of patent activity (issuance).

Q: Innovation is the process of creating something new, which is central to the entrepreneurial process.

Q: Joseph Schumpeter argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete, and this process, which he called creative destruction, is good because it stimulates economic activity.

Q: In regard to patent activity (issuance), which of the following statements is correct? A) Small businesses outperform their larger counterparts. B) Small businesses underperform their larger counterparts. C) Small businesses and large businesses are relatively equal. D) Small businesses are not active in patent activity. E) Large businesses are not active in patent activity.

Q: ________ is the process of creating something new, which is central to the entrepreneurial process. A) Creative destruction B) Modernism C) Execution D) Creativity E) Innovation

Q: According to the textbook, entrepreneurship has historically had ________. A) a major impact on the economy and minor impact on society B) a minor impact on both the economy and society C) a major impact on society and minor impact on the economy D) a major impact on both the economy and society E) no impact on either the economy or society

Q: In the book The Theory of Economic Development, ________ argued that entrepreneurs develop new products and technologies that, over time, make current products and technologies obsolete. This process is called creative destruction. A) Malcolm Gladwell B) Seth Godin C) Joseph Schumpeter D) Thomas Friedman E) Jim Collins

Q: As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy. A) creative destruction B) repetitive destruction C) iterative replacement D) inventive replacement E) iterative destruction

Q: Unfortunately, statistics show that there is very little interest in entrepreneurship among young people in the United States.

Q: Although interest in entrepreneurship remains high nationwide, the number of women-owned businesses is decreasing.

Q: Over the past 10 years, the demographic makeup of entrepreneurial firms has remained fairly stable in the United States and around the world.

Q: According to a recent Gallop survey, about ________ percent of kids in grades 5-12 say they plan to start their own business. A) 10 B) 20 C) 30 D) 40 E) 50

Q: Which of the following was not given in the textbook as a reason for the increase in the number of senior entrepreneurs? A) Seniors tend to be more passionate about new business ideas than middle-aged or younger prospective entrepreneurs. B) Many seniors have extensive business experience and other qualities that equip them for an entrepreneurial career. C) Growing worries among seniors that they need to earn additional income to pay for future health care services and other expenses D) An increasing desire among older workers for more personal fulfillment in their lives E) Corporate downsizing

Q: There has been ________ in the number of minority entrepreneurs in the United States over the past several years. A) a moderate increase B) a substantial decrease C) no meaningful change D) a substantial increase E) a moderate decrease

Q: Which of the following statements is not true about women-owned businesses in the United States? A) The number of women-owned businesses is decreasing. B) A total of 33 percent of women-owned businesses are owned by minorities. C) In some industries, women own a significant share of the business. D) The number of groups that support and advocate for women-owned businesses continues to increase. E) Between 1997 and 2013, the number of women-owned businesses increased at a rate of one-and-a-half times the national average.

Q: Identify the three types of startup firms, and discuss how they differ. Provide examples of each type of firm.

Q: In terms of the "types" of startup firms, entrepreneurial firms bring new products and services to market.

Q: The Partnering for Success feature in Chapter 1 focuses on start-up incubators and accelerators. According to the feature, participating in a start-up incubator or accelerator is an excellent way to ________. A) learn how to write a business plan B) prepare to become a franchisor C) gain access to mentors, partners and investors D) learn how to conduct an industry analysis E) prepare for a job in a major corporation

Q: According to the textbook, Dropbox, Facebook, and LinkedIn are examples of ________ firms. A) lifestyle B) salary-substitute C) industry-standard D) entrepreneurial E) standard-of-living

Q: Entrepreneurial firms ________. A) are small firms that yield a level of income for their owner(s) that is similar to what they would earn when working for an employer B) bring to market new products and services that are not particularly innovative C) offer to customers common products that are not particularly innovative, and provide their owner(s) the opportunity to pursue a particular lifestyle and earn a living while doing so D) provide their owner(s) the opportunity to pursue a particular lifestyle and earn a living while doing so E) bring new products and services to market by creating and seizing opportunities

Q: Montana Sky Trails leads multiday outdoor adventure trips for private groups and corporate clients to various locations across Montana. The company was started by Justin Smith, an individual that gave up a prestigious job in banking because Montana Sky Trails better accommodates his personal lifestyle. Montana Sky Trails is an example of a(n) ________ firm. A) entrepreneurial B) salary-substitute C) standard-of-living D) statutory E) lifestyle

Q: Colorado Sandwich, Soup and Salad is a casual dining restaurant that has been owned by Stephanie Peterson for the past 14 years. The restaurant offers a menu that is typical for casual dining restaurants and affords Stephanie a level of income that is similar to what she would earn in a conventional job. According to the textbook, Colorado Sandwich, Soup and Salad is an example of a(n) ________ firm. A) salary-substitute B) entrepreneurial C) quality-of-life D) lifestyle E) industry-standard

Q: According to the textbook, there are three types of startup firms: ________. A) lifestyle firms, general firms, and entrepreneurial firms B) standard-of-living firms, statutory firms, and general firms C) entrepreneurial firms, standard-of-living firms, and statutory firms D) lifestyle firms, salary-substitute firms, and entrepreneurial firms E) innovative firms, entrepreneurial firms, and standard firms

Q: Entrepreneurs are motivated primarily by money.

Q: Entrepreneurs are usually moderate, rather than high, risk-takers.