Module Quiz 4

- Know the difference between "creativity" (novel + useful) and "innovation" (creativity implemented to create value).
- Be able to explain divergent vs. convergent thinking and why problem framing changes the solutions you generate.
- Memorize the four common “moats”: network effects, switching costs, distribution advantages, and learning/data advantages.
- Use the case lens: (1) early advantage, (2) what threatened it, (3) what moat existed—or was missing.
- Be ready to explain one success (eBay/Salesforce/Netflix) and one failure (Webvan/Friendster/Netscape) in 3–4 sentences.

Module 4 Study Guide

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Use this guide to review the key concepts from Module 4: creative thinking, opportunity recognition, and first-mover strategy—plus what the major cases teach about moats, scaling, and distribution power.

- Creativity = ideas that are both novel and useful; innovation = creativity put into action that creates value.
- Divergent thinking generates many possibilities; convergent thinking narrows and selects the best ideas using fit and evidence.
- Problem framing is how you define the problem; better framing leads to better solutions.
- Constraints (time, money, technology, regulations, capacity) can trigger more focused creativity.
- Opportunity recognition = noticing patterns, unmet needs, and environmental changes that can become the foundation for a venture.
- Feasibility asks whether the idea can work with real resources and conditions; assumption testing turns guesses into testable statements.
- A creative idea is not automatically an opportunity—an opportunity must be deliverable, adoptable, and defensible against competitors.
- First-mover advantage exists only when the first mover builds something hard to replace, hard to copy, or expensive to switch away from.
- First movers win when they build a moat that strengthens over time (network effects, switching costs, distribution advantages, learning/data advantages).
- First movers fail when they scale too soon, when unit economics don’t work yet, or when powerful incumbents control key distribution channels.
- Cases: eBay (network effects + liquidity + reputation switching costs), Salesforce (subscription cloud model + workflow switching costs), Netflix (distribution partnerships + learning loop).
- Failures: Webvan (capital intensity + premature scaling), Friendster (couldn’t scale reliability/UX), Netscape (incumbent distribution power and bundling).
- Explain how creativity supports opportunity recognition under uncertainty.
- Differentiate creativity from innovation (implementation + value creation).
- Describe why first movers sometimes win and sometimes lose.
- Use the case lens to explain: (1) early advantage, (2) what threatened it, and (3) what moat protected it—or should have protected it.
- Connect creative thinking to evaluation by explaining how feasibility, timing, risk, and competitive forces shape real opportunities.
- Creativity
- Innovation
- Divergent thinking
- Convergent thinking
- Problem framing
- Constraints
- Opportunity recognition
- Feasibility
- Assumption testing
- First mover
- Follower
- Market potential
- Risk
- Moat (network effects, switching costs, distribution advantage, learning/data advantage)
- Using the lens, explain why eBay’s advantage strengthened over time instead of weakening.
- Explain how Salesforce created switching costs and why switching costs matter in first-mover strategy.
- Explain why Webvan’s failure teaches a warning about premature scaling and unit economics.
- Explain how distribution channels changed outcomes for Netflix and Netscape in opposite directions.
- Choose one case and describe the strongest moat (or missing moat) and how you would strengthen it.
Focus Terms:

CreativityInnovationOpportunity RecognitionFeasibilityFirst MoverMoatNetwork EffectsSwitching CostsDistributionAssumption Testing