26. When creating an innovative business model, we use a minimum viable product (MVP) to

a. Obtain feedback from our first customers to refine the business model and the go-to-market strategy

b. Develop a standard product that can be replicated many times to achieve economies of scale

c. Recognize the employee making the greatest contribution to the team effort

d. Implement operational controls so that we can guarantee strict conformity with quality standards

27. A companys value proposition is:

a. Central to the design of the business

b. None of thes choices

c. A statement of the link between an important customer problem and the companys product or service

d. A statement of the value that a company intends to provide to its customers

e. All of these choices

28. The economist Joseph Schumpeter first described the process of creative destruction. Which of the following best explains what creative destruction is and why it should matter?

a. Creative destruction is the process by which intellectual property rights are protected. Established companies use creative destruction to protect their patents and trademarks and to defend themselves from competition from startups.

b. Creative destruction is the process by which entrepreneurs introduce innovative products, services and business models into the market. These innovations often lead to the failure of existing businesses, but the process allows the market to discover new and better ways of doing business.

c. Creative destruction is the process by which government agencies plan the economy and allocate resources most efficiently.

d. All of these choices

29. Which of the following startups is likely to be in the best position to seek and benefit from venture capital (instead of debt financing, crowdfunding or bootstrapping) to scale their business operations?

a. OtterBots is an autonomous vehicle startup that expects to spend $10,000,000 in R&D over four years before launching its first product. It has no revenue currently but its total addressable market is valued at $10 billion.

b. OtterStuff is a digital business that uses the Shopify platform to process customer orders without taking inventory of any goods. It has not developed its own products, technology or intellectual property, but its lean cost structure has allowed it to generate a modest profit of $10,000 and positive cash flow in its first year.

c. OtterWash is a car wash and auto detailing business. It has consistently generated $50,000 annually in positive cash flow for five years and similar levels of net income. The business owns the real estate, facility and equipment used to provide services. It is considering opening a second location.

d. OtterTees is a startup that designs t-shirts and outsources the manufacturing to keep its costs low. The startup has successfully sold one design through Amazon and wants to expand its product offerings.

30. When providing a startup company with a loan, banks want

a. Financial projections showing that the company will generate sufficient cash flow

b. All of these choices

c. A personal guarantee of the loan by the founders

d. Cash flow sufficient to repay the loan from sources other than the company

e. Collateral in case the company cannot pay back the loan