It’s been almost a year and a half since TCC started.
Needless to say, I had absolutely no idea on the majority of the terms I use in my conversations these days.
This added with the fact that snippets from Shark Tank and Dragon’s Den have filled my social media feeds, I take it as a sign to share about all the startup words I know of, and you should too.
Startup terms that existing and new entrepreneurs must know
Let’s face it. The startup lingo is up and growing like wildfire. I blink an eye, and there are 5 new terms waiting for me to explore them.
While some terms will come and go, there are a bunch that are meant to stay.
A
- Accelerator: An accelerator is a program wherein mentors and veterans come together to guide and support startups along with equity either in exchange for limited funding or resources.
These programs range anywhere from 3 to 6 months, and are often paid for.
Accelerators are instrumental in successful launch of startups worldwide.
Zeroth.AI, India Accelerator, Sprout X, Entrepreneur First, Y Combinator, etc are some examples of accelerators across the world.
- Accessibility: This is a term generally used by product startups, which refers to the act of removing all obstacles and barriers for efficient product use.
- Acquisition: An acquisition is when a bigger company or group buys another startup or company.
Brands acquire startups that often complement their products and service, to ensure a comprehensive offering pile for their target audience.
Google acquired Android for $50 million in 2005, with an aim to enter the mobile phone market.
And we all know how that acquisition turned out.
- Activation: Activation is a term used to describe the state of the user in SaaS startups after they finish their trial, when they’re most likely to activate their subscription.
This state thus activates onboarding and customer service aspects of a paying customer.
- Advertisements: Advertisements, abbreviated as ads are usually visuals of products, goods or services that can help you in your daily life. They are a part of a brand’s overall marketing strategy, executed to expand brand awareness and drive sign ups or purchases.
You and I come across a plethora of advertisements on a daily basis.
- Agile: It is a methodology teams use for product development in which the development is broken down into sub-tasks and chunks of smaller and iterative components.
This leads to efficient development and prompt testing.
- AI: It is ‘Artificial Intelligence’, a technology that combines human intelligence with information derived from perceiving, inferring and then formulating digital machines.
This technology makes everything more accessible as opposed to manual interventions at various touchpoints.
- Alpha Release: It indicates the phase of a product where it is not developed fully, but is sent out for testing internally, to gain feedback.
- Angel: An angel is an individual or an entity that invests in early-stage startups, and helps them gain a foothold in the market.
Startups having an MVP in place have the highest probability of securing funding from an angel.
- API: API stands for Application Programming Interface, which acts as a connection between two applications and its functions.
It is a list of protocols and how-tos needed to make two applications communicate with each other without disturbing each other’s functionalities.
- AR: Known as ‘Augmented Reality’, it is an interactive experience that happens by combining real-life elements and digital technologies.
- ARR: ARR is Annual Recurring Revenue, which is calculated as the total revenue you earn for recurring subscriptions of your products in a year.
This is a KPI used to measure customer retention and revenue projection.
Say, you have 10 customers paying USD 100 every month in 2022, then your ARR is USD 12000.
B
- B2B: Standing for Business-to-Business, it is a type of business that caters to other businesses through their offerings.
TCC is a B2B startup, where we offer our marketing, sales, and CX consulting services to other businesses.
- B2C: Standing for Business-to-Customer or Business-to-Consumer, it is a type of business that sells its products and services to customers.
eCommerce brands like Amazon and Walmart provide their services to customers. Meta is a social networking app, offering a platform for customers.
- B2G: A business serving the government with its offerings is called a Business-to-Government (B2G).
Contractors and businesses providing resources can be termed as B2G businesses.
- Back-end: A stack of technologies that come together to form the base/foundation of a product or an application is called back-end.
- Beta Release: Unlike Alpha Release which refers to an incomplete product being tested internally; a beta release refers to the release of a more developed version to a limited set of external users.
This happens only after a few bouts of alpha releases, and with an aim to get useful feedback from existing or potential users.
- Board of Directors: A body or authority of a company, chosen by the stakeholders; which forms growth strategies, drives execution and even supervises the operations.
- Bootstrapping: This refers to when a startup is not funded from any external units, rather from their own money and the revenue they generate.
In addition, bootstrapped startups solely run on the founders’ expertise, knowledge and skill, without taking help from any mentors and advisors for business development.
- Burn: I used to think that burn meant how much money a startup is losing over a period of time! I was wrong.
Simply put, it indicates the amount of money a startup will spend on its operations over a period.
This is one of the most common questions investors ask a startup, what is your burn rate? Or how much is your burn?
- Business Model: A business model is a predefined set of rules and processes that are responsible for your business growth and customer acquisition.
Your business model also decides how your business will generate revenue. Different pricing packages, incentive structures, discount strategies and other aspects make your business model.
- Buyer Persona: A penned representation of your ideal customer is called a buyer persona. If you have multiple buyers, you should have multiple buyer personas.
C
- CAC: Better known as the Customer Acquisition Cost, it indicates the amount you spend to acquire a new customer.
The expense consists of marketing costs, infrastructure, resource costs and other overheads that go into generating leads and converting them into customers.
- Cache: The cache is a digital location where data is stored on a temporary basis.
For example, a cache saves your website visitor’s information, which improves their entire experience.
- Cap Table: A cap table is like a spreadsheet, a literal table that represents the percentage of equity and ownership every stakeholder owns.
In the case of a funded startup, it includes the valuation of equity in every round, including those of the investors.
- Capital: A capital is the initial monetary investment made to run a business.
- Cashflow: As the name suggests, cashflow literally means the cash that flows in and out of your business. It can either be transactions in cash or online.
- Cliff: A cliff represents a time period until which an investor is required to stay with the startup without getting their money back.
In simple terms, it is like a minimal contract period for investors, during which the startup founders and team can work on achieving the set goals.
- COGS: COGS is the ‘Cost Of Goods Sold’, which is the total cost involved in developing or manufacturing a product that a business sells.
Money spent on labor, raw materials, infrastructure, resources, etc is taken into account here.
- Cold Outreach: A business development strategy which involves approaching an audience that has not expressed interest in your product, but can very well become your customers.
- Compilers: Compilers are programs that convert programming languages into a machine language that a processor can understand.
- Consumer Products: Products or services that are developed/manufactured specifically for the consumer’s direct use and consumption are called consumer products.
Food items and lifestyle products are consumer products.
- Copyright: It indicates the legal right of a person for a particular entity, such as an artwork, song, book.
- Crowdfunding: When you source funding for your startup from the crowd or a large group of people who connect with your vision, usually from the internet, it is called crowdfunding.
There are various sites that help startups and individuals raise money for versatile purposes, like Patreon, Crowd Supply, Sateeq, Kickstarter, etc
- Crowdsourcing: Just how crowdfunding is about securing investments from the crowd, crowdsourcing refers to the act of obtaining information from the public or a large group of people. This also includes possible inputs pertaining to the overall development of a brand.
- Customer Experience: Customer experience is defined as how your customers and non-customers are treated throughout their journey with your brand.
D
- D2C: Defined as ‘Direct-to-Consumer’, these businesses manufacture products to sell directly to consumers.
Homegrown brands and lifestyle brands are some examples of D2C businesses.
- Debt: Debt indicates the money given to any business on loan. Debt is either taken from friends and family, or from investors, with clear terms on by when it needs to be repaid.
- D/E Ratio: Defined as the ‘Debt-to-Equity’ ratio, it indicates how much debt a company has against its assets and shareholders.
If the debt is higher than equity, leading to a higher D/E; it means that the company has more liabilities than it can handle or cover.
It shows how much money the company owes to the creditors against each buck owned by the shareholders.
An ideal D/E is 1 to 1.5, depending on the industry and business model.
- Demographic: Demographic is defined as the social and economic information of a population or audience. Aspects like age, gender, marital status, nationality, spending capacity, earning range, etc are included in demographics.
It is important for a business to know what your audience demographics are.
- DevOps: A methodology used in software engineering which consists of protocols, a set of best practices, tools, in integration with IT operations to improve the efficiency of a software development lifecycle.
- Digital Marketing: A marketing strategy that helps businesses establish and expand their presence on online platforms. The Internet plays a significant role in digital marketing.
Read: How TCC provides digital marketing services?
- Dragon: Startups that raise more than one billion dollars in a single round of funding are called dragons.
Yes, Uber is a dragon.
- Due Diligence: Due diligence refers to the actions and the care you take to avoid partaking in any offense or harm towards anything.
In other words, it is what you do to make others feel safe about themselves and anything they own.
E
- Early Adopters: Also known as evangelists, early adopters are the initial users of your product. The ones who join in beta release and stick with you can also be called early adopters.
These users generally belong to your community, and are the most honest and critical in their feedbacks. Evangelists are also those who board your bandwagon early on and even convince others in their network to join in.
- Early Bird: Early bird refers to a product marketing strategy where you open access to your product for a limited number of people provided that they sign up for it. Users that do, then turn into early adopters.
- EBITDA: It stands for ‘Earnings Before Interest, Tax, Depreciation and Amortization’. It is a metric which helps measure a company’s net income, profitability and actual performance.
The higher the EBITDA, the better for you and your investors.
- Ecosystem: A startup ecosystem is defined as a comprehensive supply chain, and how information flows from one end to the other, ensuring harmony across the departments in the startup.
It is analogous to the food chain we are all a part of, whereas, a startup has to get connected to accelerators, incubators, associations, communities and investors to form a network of the ecosystem.
- Enterprise Products: On the contrary to consumer products, enterprise products are those that are built for businesses and organizations. These are commonly made for commercial use.
- Entrepreneur: An entrepreneur is a person who establishes and grows a business.
For example, I am an entrepreneur 😎
- Equity: Equity is the total amount of money being put into a business. That equity can come from the founder/s, investors, and other stakeholders.
In short, equity is the total value of a business after the debts and loans have been subtracted.
- ESOP: ESOP stands for ‘Employee Stock Ownership Plan’, an employee benefit plan which enables employees to have ownership of stocks of a company they work in.
It encourages employees to own a part of the organization before the public does, at fair prices.
- Exit: An exit is defined as the event of a founder or an investor leaving the company, either after releasing the IPO, or after a merger and acquisition.
F
- Features: Features are functionalities that a product delivers to the users.
- FMA: Known as the ‘First Mover Advantage’, it talks about the advantage a company has because they were the first ones to bring a particular product or solution into the market.
They have essentially introduced their audience to an offering they have, which leads to better brand recognition and stronger positioning.
Flipkart, Paytm, Zomato, and Ola are examples of brands experiencing first-mover advantage in India.
- Forecasts: The act of drawing an estimate of your future performance based on historical data and current market scenarios is called forecasting.
Forecasts are important to make decisions for business development and team expansion.
- Founder: A founder is the person who lays the foundation of either a project or a company. Founders are responsible for driving innovation and change to their industry.
- Framework: A framework is a set or a library of codes that are at your disposal to make the development process efficient.
- Freemium: It is a business model where brands give limited access to their products free-of-cost, with the facility to pay and upgrade anytime.
- Front-end: A stack of technologies that come together to form the interactive layer of an application is called front-end.
- Full Stack: Software engineers that are adept at front-end and back-end development of an application are called full-stack developers.
- Funding: The amount of money startups receive from investors is called funding.
G
- Gamification: The approach of adding elements of rewards and competition in a product or application with a facility to interact with like-minded individuals is called gamification.
- Go-to-market: The go-to-market or GTM is a strategy that businesses use to launch their products in the market.
A good GTM is imperative for finding an ideal product market fit and later, better market positioning.
- Gross Profit Margin: It is a metric calculated by subtracting any and all expenses from your revenue or net sales, and then dividing by revenue.
Basically, it calculates the net amount you earn over each product sale.
- Growth Hacking: The approach of running low-cost yet effective experiments, all across the board with an intent to grow the customer base and thereby revenue, is called growth hacking.
H
- Hockey Stick: Hockey stick is a graph that represents the growth curve of a startup. Investors expect and strive for the startups they invest in to have a hockey stick growth, so as to earn their ROIs quickly.
I
- ICP: Defined as ‘Ideal Customer Profile’, and also known as Lead Profiling or Prospecting, ICP is the process of building a hypothetical, fictional profile of your ideal customer, which helps you segment and fixate your marketing efforts better.
It is explained better among the sales terms we listed.
- ID: ID stands for ‘Interactive Design’, a field of design that focuses on establishing a dialog, a communication between the user and the app, using colors, media, graphics and such elements.
Brands that want to focus on customer experience should consider taking an ID-specific approach.
- Inbound: A term used for both marketing and sales, describes an interaction that initiated from the prospect’s end.
Inbound marketing includes leads that express interest in your product and inquire with you, which is then assigned to the sales team to convert.
- Income: Income is the amount you earn from your business, and take home at the end of the day, after deducting all possible expenses.
- Incubator: An incubator, unlike an accelerator, is an advisement/mentorship program that goes on for a long period of time. They also help with providing co-working spaces, networks and connections to build your business in the right direction.
Accelerators are in, more with a purpose of helping startups raise funds, whereas, incubators walk hand in hand with early-stage startups while they face and overcome various challenges.
- Intellectual Property: Intellectual Property or IP is something that is owned and protected from copying, stealing or falsely claimed by someone else. Use of copyrights, patents, trademarks, are used to frame IP.
- Investor: An investor is someone who funds a startup with money and experience, most often against an ownership of a part of the equity.
- Iterations: Iterations are essentially versions of the ideas you have to set your startup. These iterations can also belong to product development, features, the overall products and services on your list; as well as any campaigns or strategies you implement.
This term is based on the fact that not all your ideas would be right in the first go. And you might have to improvise more than you can imagine.
K
- KPIs: KPIs are ‘Key Performance Indicators’, which are metrics defined to measure performance periodically.
L
- Launch: Launch is defined as the event of introducing your product or service to the market, not necessarily with great pomp and show.
- Lean: It refers to the methodology companies use to plan, execute and evaluate their productivity with minimal resources possible, so as to enable quicker and better development and testing of a product.
M
- Market Penetration: Market penetration represents how familiar your target market is with your brand and the products you sell. Do they know that you exist, what solutions you provide, how often have they come across your brand – all of it and more consists of market penetration.
- Market Value: Market value is the cost at which a product can be sold, based on the buyer’s willingness to pay a certain price.
- Merger: When two or more companies with a similar vision come together to form a single entity to collaborate operations, revenue, growth and other aspects of the business.
The merger of Vistara with Air India is one of the biggest in Indian history.
- ML: It stands for ‘Machine Learning’, which uses data, algorithms and artificial intelligence to imitate human intelligence.
- MMP: MMP stands for ‘Minimum Marketable Product’, and is a product that is ready to be promoted and sold to your target market. This step comes after the MVP development, and decides if the product would be able to make money.
- Modules: Modules are a set of various features and functionalities of a product that are aimed at simplifying one category of tasks for the user.
For example, your data management module should contain all the functionalities your users should need to manage their data.
- Monetization: The act of earning money or revenue from a product, service or its features is called monetization.
- MRR: MRR stands for ‘Monthly Recurring Revenue’, and as compared to ARR, refers to the monthly revenue generated from your active and recurring subscriptions.
- MVP: Probably the most commonly used term in the startup ecosystem, MVP is ‘Minimum Viable Product’, which represents the development of a new feature or a product solely to test and validate it for external use.
N
- Net Profit Margin: It is a metric which calculates the income or profit earned against the total revenue.
- Non-tech Startup: As a counterpart to a tech or product-based startup, a non-tech startup is a business that does not deal with technology or product development at any stage.
TCC is a non-tech startup.
O
- Open Source: A set of code that is available for public use.
- OPM: OPM stands for Other People’s Money, where startup founders source funding from friends, family and fools – basically from their closest network.
- Outbound: Against inbound, outbound is when the audience has not displayed any interest in your product explicitly, rather, you and your sales reps are approaching your audience to make them aware of your product.
P
- PaaS: Stands for ‘Platform as a Service’, it is a business model to provide a cloud-based platform to users so that they can build, design, run and manage their modules or mini applications.
AWS is an example of PaaS.
- Pitch Deck: A pitch deck is what you present to investors and VCs with the purpose of securing funding.
The deck constitutes of information like problem statement, corresponding solution you offer, TAM, estimated revenue projections, current and estimated market penetration, performance so far, and others to help investors get a better idea of your business.
The deck is also supposed to explain what you’d do with the requested funding.
- Pivot: A pivot refers to turning or change in target focus of your business. Brands pivot if they don’t see relevant growth opportunities for the solutions they are currently providing, or if a secondary idea takes over the original one through better acceptance.
Read: Slack’s amazing pivot story
- Post-money Valuation: It is defined as a company’s worth after adding external capital financials and investments that have been made.
- PR: PR stands for ‘Public Relations’, which is the act of keeping the public and the media up-to-date with happenings at your company.
This ensures that the public remembers your brand, and improves market positioning.
- Pre-money Valuation: As opposed to post-money valuation, it is what the company’s worth is, before any external investments or fundings.
- Pre-revenue: Pre-revenue is a stage of a company (startup), where they are not particularly earning money or any revenue from their products.
This either means that the product isn’t entirely ready to be sold yet, or they are testing their MVPs and are about to launch their pilots.
- Proof of Concept: It refers to the examples of growth and progress your customers have made after using your product. Your proof of concept shows how users have benefited from your product, which further helps establish credibility and trust in your audience.
- Product-Market-Fit: When you test and validate your product enough to understand whether it fits your target market’s requirements and solves their challenges, it is called a product-market-fit.
A product-market-fit is a sign of market acceptance, and saves startups from failure later.
Read: What are some early signs of startup failure?
- Products: Products are the physical or digital representations of what you create, in order to simplify and automate your audience’s operations.
- Profit: Profit is what you earn from selling your products and services over and above your total development expenses.
Say, you are manufacturing a pen at US $2, and sell it at US $5, then your profit is US $3.
R
- Retention: Retention simply means customer stickiness. When your existing customers continue consuming your services over a period of time, it is called retention.
The better your customer experience, the higher your retention.
Read: The best customer retentions strategies for you
- Revenue: The money you generate from your products, services and overall operations is called revenue.
- ROI: It stands for ‘Return on Investment’, which is the ratio of money earned against money invested. A good ROI indicates better performance of the business.
- Royalty: Royalty is the amount a third-party pays to the business for using that brand’s services and products.
- Run Rate: Run rate in a startup is defined as the estimated financial performance based on current performance calculated monthly or quarterly.
The assumption that the scenario in future will be similar to how it is now, is critical in determining the run rate.
- Runway: It is represented as the time period until a company runs out of money without affecting their operations.
The runway is calculated so as to keep the startup founders aware of how they need to perform, what they need to do to improve their numbers, a plan B to keep their operations running.
S
- SaaS: SaaS is software-as-a-service, which is when a product or application is developed and sold and consumed as a service in the customer’s environment.
To explain simply, SaaS are cloud-based applications.
- Scalability: Scalability is defined as the startup’s ability to grow and expand as the market requirements change and progress owing to external factors.
- Seed: Seed is the first official funding stage of a startup. It is just starting out in the market, and is often yet to find a product-market-fit or even earn money from any sales.
Seed is the first money a venture receives from external investors.
- SEO: Defined as ‘Search Engine Optimization’, it is the process of analysing and improving your website’s performance on search engines.
Factors like relevant content, user experience, mobile-friendliness, etc affect SEO performance.
- Serial Entrepreneur: An entrepreneur who has multiple startups and businesses under his belt, with an aim to innovate and make a difference in the current practices, is called a serial entrepreneur.
Elon Musk is a serial entrepreneur.
- Series A, B, C: Seed round is followed by various other funding rounds of startups, which are series A, B, C and beyond.
These funding rounds happen at different growth stages of a startup, and separate amount ranges to be invested.
Read: How startup funding rounds work?
- Solo-preneur: An entrepreneur who is running a startup alone, without any partner or co-founder involved, is called a solo-preneur.
- Stack: A stack is defined as the bunch or set of tools and technologies that are used for software development.
- Startup Consulting: The act of guiding and mentoring a startup for growth and optimized operations is called startup consulting.
Startups often reach a stagnation point if they don’t innovate in their strategies. Startup consultants fulfil this role and help startups with business development strategies.
- Sunk Cost: Like a sunk ship which cannot be recovered from the depths of an ocean, sunk cost is money spent which cannot be recovered.
Now that money could or could not have generated any money in return, it would still be sunk cost.
- Supply Chain: In layman terms, supply chain is defined as the quintessential assembly line of a production process, where one manufactured component moves one step to another, leading to the completion of the product.
A similar supply chain now happens in digital or SaaS products as well.
- Sweat Equity: Human investments, like time, effort and expertise constitute sweat equity. Entrepreneurs invest this sweat equity to make money, or financial equity.
T
- TAM: It stands for ‘Target Addressable Market’, which is a subset of your entire target market that can be addressed and acquired for your product.
- Target Market: The audience your products are targeting and made for is called the target market.
- Term Sheet: A sheet or document which pens out all the terms and conditions of an investment made in a startup.
- Thought Leader: An individual or an entity who is an expert in a particular topic or field, and shares it with their community from time to time.
- Traction: Traction is defined as the response you receive from the audience for your products and services.
For website, traction is the number of visitors and reach you have on search engines.
- Turnover: Defined as the amount of money or sales you generate over a period of time. Also known as income or gross revenue.
U
- UI: It stands for ‘User Interface’, is a touch point between the user/visitor and your product. User interface is imperative for a memorable experience.
- Unicorn: Companies that have crossed US $1 billion in valuation without going public are called unicorns.
Byju’s, MakeMyTrip are some Unicorn examples.
- Unit Economics: The measurement of a company’s cost to revenue ratio for a single unit they sell.
This analysis is required to understand how the company is performing, how and where it makes money and what’s making them sweat or burn out.
- Usability: The ability of a product or service to be used to maximum efficiency.
- USP: Defined as the ‘Unique Selling Proposition’, it is what sets you apart from your competitors and usually a feature or service that only you provide in the industry.
- UX: It stands for ‘User Experience’, which is the experience or the dialog you establish with your visitor or user when they interact with your product.
V
- Valuation: The answer to ‘how much is your company worth?’ is called valuation. It is calculated as a total of revenue earned so far, projections, customer worth and other factors.
- Value Proposition: The value or benefit you provide to your customers is called value proposition.
- VC: It stands for ‘Venture Capital’, is a type of financing companies gain against private equity. It can happen at an early stage, or even in established brands who have promising growth opportunities.
- Visionary: A visionary is someone who carries a long-term thinking and a progressive vision for a better future.
W
- Wantopreneur: Someone who is wanting or preparing to be an entrepreneur.
- Wireframe: A wireframe is analogous to a blueprint, and even a prototype of the actual application or user interface.
Conclusion
Woah, didn’t realize I shared almost 150 startup terms. I have gone absolutely insane with this list!
Do you have any more on your list? If so, add them in the comments section.
I sincerely hope you learned something.