Over the last few years, I have learned a lot about business.
I always told people my first startup Uberpong was my MBA.
You frequently find yourself in situations where business people (who have probably got an actual MBA) use acronyms or lingo to either try and confuse you or make you think that they know what they are talking about.
Due to these endless abbreviations and expressions, I decided I had to make a list of the ones that I see the most.
If there are any acronyms I missed, please add them in the comments so I can update the post. Enjoy!
A hub where startups are given mentorship, space to work on their ideas and sometimes seed capital.
The SEC (Securities and Exchange Commission ) defines an accredited investor as,
“A natural person with income exceeding $200,000 in each of the two most recent years or joint income with spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person.”
In layman’s terms, it is a rich individual potentially interested in investing in your company.
Advertorials are paid content that is meant to look and feel like a true story or blog post.
Companies are turning to these because display ad pricing has become less effective and viewers have become immune to them.
When one company or investment group buys another company.
One of the most common expressions in the startup world. A lot of people will quote “the Three Fs”: Friends, Family and Fools. These channels are often where you get your first cash to get things going. If you are using very little capital and proving your hypothesis, you are successfully bootstrapping.
The first to market is not always the first to capitalize on the industry. One reason for this is that it can cost a fortune to educate potential users or customers. That said, if you are a company like Disney, you lead and by innovating you stay ahead of the pack.
If you “gamify” something, you add a game layer to your product that encourages people to use it with rewards of various kinds. See Foursquare and how they used virtual badges and the “Mayor” badge to encourage people to use their app.
Growth Hacking was a term first used by Sean Ellis (Dropbox) to describe a marketing technique that focuses on quickly finding scalable growth through non-traditional and inexpensive tactics such as the use of social media. Other companies that have effectively used this technique are Airbnb and Foundr.
This covers patents, trademarks and copyrights. It is a good way to protect your “secret sauce”. Generally I remember them like this:
Patent — the DNA of your product. They are typically used to protect your design.
Trademark — they are used to protect your brand and depending on which one you register, you can add a “™ “ or “®” (Registered Trademark) next to your logo.
Copyright — they are used to protect your creative content (like film, music or art) and it allows you to use a “©” symbol on your content.
To start a company, website or app. It is the euphoric moment when you feel that the blood, sweat and tears was worth it. Companies can either have a “soft launch” (minimal press exposure and staying in beta) or celebrate with a “launch party” which can be at major startup events like CES or a Startup Week.
Using something to accelerate your growth or success. This is often found in the form of technology or partnerships. Think about a Formula One car getting in the slipstream of a car in front of it so it can be catapulted out at a faster speed and overtake it.
Using deliberately low pricing to gain market share. The key here is to tempt your users with the low price or free offer and once you have acquired them, focus on how you can get repeat business from them.
The things that can be identified to quickly bring cash in the door. Your first customers will keep you afloat and help you get to your cash cows (reliable and consistent revenue generators) and whales (your accounts that make you big bucks).
You will frequently hear the line “how much of the pie are you trying to get?” from investors. What they mean is how much market share will be yours and in what time period?
When two companies join forces and become a joint entity.
How you make money. Do you sell online, offer consulting services or sell face to face? Without a way to monetize, most businesses die. The only exceptions are well funded tech startups where a bet has been made that the site will get enough users so that a monetization strategy can eventually be executed. This is highly risky but the reward is high.
MVP (Minimum Viable Product)
The simplest form of your product. This can be used to attract Beta users/early adopters or to pitch for funding.
A change in direction as a company. This is a key moment in the life of a startup and can make or break it. A well known pivot is when Fab went from being a gay social network to being an e-commerce curator.
A site that has been built to function well across all devices. Your site might appear completely differently on the web compared to mobile but as long as your end users are always considered, you will be fine.
How long your cash will last and when you think it will run out. The key here is knowing when to start pitching for investment so you can time it to come in before you run out of cash.
SaaS (Software as a Service)
A subscription that is sold so that your user can use your software.
How big your business can grow, how much market demand you have and which markets you can grow into. A common question from investors is, “How scaleable is this opportunity?” If you cannot scale, you might fall under the “Cottage Industry” or “Lifestyle Business” category.
Someone who launches a number of businesses either simultaneously or one after another. And if they launch something you can eat for breakfast, they are a serial cereal entrepreneur!
Shares of your company given to early employees or contractors in place of cash. This is very common in the startup world before funding arrives. If you take a chance with a startup, your shares might become lucrative when the company sells.
You need to identify who will be buying your product, their demographic and their location. Once you have this data, you have your target market.
When an investor makes you an offer to invest in your company, the term sheet is a document that outlines what they will get for what they put in — including % ownership and voting rights.
Proof that your executive summary (hypothesis) is working. People are actually buying your product or using your service. This is one of the most exciting times in a startup!
Someone who is seen as being a leader in their field, is invited to speak at conferences and has probably published at least one book.
A company that gets a $1 billion valuation. As with most unicorns (like the one in the photo above), they are extremely rare.
How the user and computer system interact. If you hear someone say “they need a new UI guy”, it means the user has difficulty operating the product.
The process of enhancing user satisfaction with a product by improving the usability, accessibility, and pleasure provided in the interaction with the product. Think about any site or app you have opened. How did you feel? Was the site’s aesthetic appeal at the forefront of your mind when you used it? If so, their UX person has done a good job.
What your company is being valued at. “Pre-money valuation” is the value before you take investors’ cash. “Post-money valuation” is that amount plus the investment put in. I would definitely recommend speaking to other Founders and accountants about how to accurately get a valuation for your business. If you are selling your company, typically the Buyer is trying to get the lowest valuation so he can acquire your business for cheap. As the Seller, you have to establish a fair valuation (typically a fair multiple for your industry) with a slight margin. Example: if your net profit at the end of the year is $100k, it might be 2–3x ($200–300k) if the company has plateaued. If it is a tech business with rapid growth, the multiple might be 10x ($1 million).
What makes your business uniquely attractive. Also known as USPs (Unique Selling Points).
If you are an entrepreneur, you might think of VCs as corporate, evil money hungry vultures. Some of them are and will screw you! Do your diligence on them (as they would on you and your startup) and make sure you have investors who align with your beliefs. Do they want to change the world like you (get them on board) or just want a steady return (yawn).
An entrepreneur who sees the change in the world before it has happened. Many say that these people have an ability to peer into their crystal balls and then develop something that we will eventually need. Famous examples of visionaries include Richard Branson, Elon Musk and Walt Disney.
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