9 Commonly Used Terms In The Startup World

Startups have fairly significant meanings to many people. Some may imagine it to be a group of entrepreneurs collaborating on a project to launch a new product. Others may perceive it as simply two men discussing the first stages of developing a mobile app. Some definitions may not be exactly how one should describe a startup. Regardless of how you define a startup business or company, there are certain terminologies that you might want to familiarize yourself with to better understand the startup world.

This list features 9 commonly used terms and their definitions. Brief explanations are also included to outline how each term is an integral factor to the success or failure of startups.

1. ACTIONABLE METRICS: measurements that tie specific and repeatable actions to observed results. The opposite of actionable metrics are vanity metrics which only serve to document the current state of the product but offer no actionable insight.

2. COST TO ACQUIRE CUSTOMERS: cost spent to convince people to use your product. This includes SEO, SEM, PR, Social Marketing, direct sales, channel sales, etc.

3. CUSTOMER DEVELOPMENT: the umbrella strategy strategy of how to organize sales, marketing and business development for a new product or company.

4. GO-TO-MARKET STRATEGY: a plan to bring products or services to customers and how the plan changes over time

5. INCUBATOR: an organization which provides resources to nurture young companies, helping them to survive and grow during the startup period when they are most vulnerable. Resources provided may include business strategy, investor introduction, sales and marketing, legal and accounting, office space, etc.

6. LEAN STARTUP: an organization designed to create new products and services under conditions of extreme uncertainty.

[from Eric Ries, author of The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.

7. MARKET VALIDATION: finding out if there are enough people out there willing to pay for your product.

[http://www.venturestab.com/2011/06/will-people-buy-your-product-a-look-into-market-validation-and-market-fit/]

8. MINIMUM VIABLE PRODUCT (MVP): the most pared down version of a product that can still be released. An MVP has three key characteristics:

a. It has enough value that people are willing to use it or buy it initially

b. It demonstrates enough future benefit to retain early adopters

c. It provides a feedback loop to guide future development

[http://www.techopedia.com/definition/27809/minimum-viable-product-mvp]

9. PIVOT: is a special kind of change designed to test a new fundamental hypothesis about the product, business model, and engine of growth.

[from Eric Ries, author of The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.]