Here’s a quiz to determine your “entrepreneurial quotient.” My intent is to test a person’s knowledge of entrepreneurship. However, scoring high doesn’t mean you’re the next Steve Jobs, and scoring low doesn’t mean you’re not. Some answers are debatable, so there will be many comments. #10, in particular, is tricky so read it very carefully.
If you’d like to take an online version, go here on the Tickle site:
1. Your company is creating a new software product. The lead programmer has just shown you a working prototype and has promised that it will be done in six months. You should assume that it will really be completed in:
a. 3 months
b. 6 months
c. 12 months
d. 18 months
e. Shortly after money runs out
2. When you’re starting a new company, you shouldn’t be afraid of polarizing people with a new product or service that flies in the face of convention.
3. Patents are the main way to make your company defensible and able to withstand the challenges of competitors.
4. The foundation of a successful brand is:
a. Effective marketing
b. Evangelistic customers
c. Extensive advertising
d. Attractive packaging
e. An excellent product or service
5. Ultimately, who positions a product or service—establishing how customers will come to view it?
a. The company that makes it.
b. The company’s advertising agency
c. The company’s PR firm
d. The customers themselves
e. The press, and industry analysts
6. If you want your company to be successful, it’s most important to strive for which objective?
a. To be the lowest cost producer
b. To be the best known brand
c. To be the most profitable company
d. To be the sole provider of something people really want
e. To have the largest customer base
7. When pitching potential investors, you should keep your presentation to how many slides?
8. As long as the founders own more than half of the company, they control the company.
9. Pick the statement that means a venture capitalist isn’t interested in your business.
a. “You’re too early right now.”
b. “We don’t have expertise in that area.”
c. “If you find other investors, come back to us.”
d. “Come back to us after you’re shipped.”
e. All of the above.
10. Which part of a business plan is the most important?
a. The financial projections
b. The management biographies
c. The competitive analysis
d. The executive summary
e. The product description
11. More than anything, you don’t want your business model to be:
12. Which of the following key assumptions do you have to test when starting a company?
a. Number of sales calls a salesperson can make
b. Conversion rate of prospects to customers
c. Length of sales cycle
d. Amount of technical support needed per unit sold
e. All of the above
13. A company that is bootstrapping should avoid which management practice?
a. Managing for cash flow, not profitability
b. Trying to recruit a “dream” management team of proven executives
c. Positioning against the industry leader
d. Building a bottom-up forecast
e. Collecting fast and paying slow
14. Many behemoth companies like Microsoft, General Electric, and 3M have broad and disparate product lines, but ironically started out with singular focus on one specific product.
15. You’ve just met with a key potential account. It could be a large sale and also bolster your company’s credibility in the industry. However, the account is afraid to do business with a “startup.” The best way to win them over is to:
a. Ask your world-famous venture capitalist investor to call the customer.
b. Arrange for the CEO of your company to meet with the buyer.
c. Offer to do a pilot implementation at a deep discount.
d. Tell the customer that you will contact them once your company is “proven” in the marketplace.
e. Have your mom provide a character reference for you.
16. In the first sixty seconds of a presentation, you should:
a. Furnish your biographical background
b. Establish the size of the market you are addressing
c. Provide a summary of your financial projections
d. Summarize the technical foundation of your product or service
e. Explain what your company does
17. What’s the most important factor to consider when selecting the first employees at a startup?
a. The candidate’s academic background
b. The candidate’s work experience
c. The candidate’s love of your product or service
d. The candidate’s willingness to work for stock options in lieu of salary
e. The candidate’s prior personal relationship with you
18. Why should you never offer stock to an employee in lieu of salary?
a. Doing so sets an implicit price for your stock.
b. It could take a long time to raise venture capital, so the employee might amass a large amount of stock.
c. This practice is prohibited by law.
d. A and B
e. A, B, and C
19. The purpose of providing an offer letter to a job candidate is to:
a. Establish a starting point for negotiation
b. Demonstrate that the company is serious about an offer
c. Confirm what both parties have already verbally agreed to
d. Create an audit trail for the human resource department
e. All of the above
20. The best reason to form a partnership is to:
a. Increase revenues or decrease costs
b. Get the attention of analysts
c. Garnering press coverage
d. Scare your competitors
e. Impress potential investors
21. The reason to put an “out clause” in a partnership agreement is
a. To enable you to get out of a bad deal
b. To make your lawyers happy
c. To enable both parties to work comfortably with each other
d. Because all agreements have “out clauses”
e. None of the above.
22. The CEO of your company just told you that he and the CEO of another company have agreed to a partnership. Your first task, as vp of strategic alliances, is to
a. Contact the PR firms of both organizations to coordinate the announcement
b. Contact the vp of marketing of both organizations to coordinate the announcement
c. Meet with the middle managers and individual contributors in your company who are going to have to make this partnership work
d. Thoroughly research the other company to determine how best to work with it
e. Begin drafting a rollout plan for the partnership
1. c; 2. a; 3. b; 4. e; 5. d; 6. d; 7. b; 8. b; 9. e; 10. d; 11. c; 12. e; 13. b; 14. a; 15. c; 16. e; 17. c; 18. d; 19. c; 20. a; 21. c; 22. c