The startup scene really loves buzzword bingo. You are at the start of your startup journey but you can’t make sense of terms like Bootstrapping, Exit, and MVP? Here’s a 34 startup glossary with the most basic technical terms. #nobullshit.
A/B Testing
A/B Testing refers to the process of testing a product or a feature directly at the target group by showing them two different, competing versions of an idea. This is an efficient way to makse sure that only success-bound measures are implemented.Accelerator
An accelerator program speeds up the development of a startup in its early stages. The program is meant to prepare the founder team for market entry and greatly increase the startup’s survival chances. During the accelerator, the teams are usually coached on a daily basis and get the training and infrastructure for working on their startup.Bootstrapping
When bootstrapping, startup founders completely abstain from using external financing and use either their own money or borrowed money from friends or family for launching the startup. This method aims to avoid spending large sums during the startup launch and maximize revenue at the same time.Build-Measure-Learn
The foundation of the lean startup method is the so-called build-measure-learn cycle. The product (or feature) is desigend according to previously formulated hypotheses and tested at the market. Using the data from the measuring phase, a decision is made whether the hypotheses have been confirmed or disproven. Das Grundgerüst der Lean Startup Methode ist der sogenannte Build-Measure-Learn Zyklus. Ein Produkt bzw. ein Feature wird dabei anhand aufgestellter Hypothesen gebaut und am Markt getestet. Auf Grundlage der gewonnenen Daten der Messphase werden dann Entscheidungen darüber getroffen, ob die gestellten Hypothesen bestätigt oder widerlegt werden.
Business Angel
Experienced entrepreneurs who support aspiring founders not only with their capital but also their knowledge and access to the their professional network are called business angels. On average, a business angel invests around 25.000 to 100.000 Euro over a fixed period of, usually, 4 to 7 years into an aspiring startup.Businessplan
A business plan is meant to visualize the concept behind a startup idea. At the beginning of their entrepreneurial journey, founders use the deck to aggregate the concept of their business idea into a structured document. It is your startup’s most crucial document and a decisive factor when communicating with potential investors.Business Model Canvas
The Business Model Canvas is the standard tool for visualizing a startup’s business model in the lean startup toolset. It can be used both for companies which so far only exist on paper and for companies which are already on the market and want to reality check their existing model.
Cap Table
A cap table (short for “capitalization table”) breaks down all the shareholders of a company in a spreadsheet. Websites such as captable.io can be useful to generate your own cap table.CEO – C-Level
C-level positions are generally management roles within a company. The term Chief Officer (CO) refers to a company’s director or managing team member. However, the designation rarely appears in a job description in that form. Usually, it’s complemented by a third word which provides a closer description of the specific role, e.g., CEO (Chief Executive Officer).Copy Cats
Copycats in the startup scene are companies which copy an existing successful business model and, at best, introduce a minor variation to the original idea.Content Marketing
Content marketing refers to the strategic planning, creation, and distribution of content aimed at a particular audience. That way, your brand can be positioned on the market, attract potential customers, and call them to action (usually to buy your product) and ensure their customer loyalty to your company.Elevator Pitch
In general, the elevator pitch is the most efficient method to explain what your startup does. The term originates in the following scenario: You enter an elevator, where you meet a potential investor. You only have the short duration of the ride to convince that person to invest into your startup.Exit
An exit strategy describes the plan to leave a startup or exit the market with your startup by selling it to another company or another investor. Mostly, it is the foduner who wants to resign or leave the company – this step is especially important for serial founders. The main focus is to recoup the invested money, sell shares, or to have the profit paid out on a pro rata basis.Financing Stages
Every startup sooner or later reaches the point where it needs external funding to realize their business idea. Traditionally, the financing stages are divided into three phases, in accordance with the startup journey: early stage, growth stage, and later stage are paralleled by the divisions pre-seed, seed, Series A and Series B.
Hackathon
A hackathon is an event where talented persons from different fields and industries meet to find innovative, occasionally even unusual, solutions to real and relevant problems from the industrial or economic sector. The term is a compound of the words “hacking“ and “marathon”.Hockey Stick Effekt
The hockey stick effect descibes a type of startup development curve that resembles a hocky stick. The curve’s data points develop flatly for a long period of time, even exhibit a short negative dip before rising sharply.
Lean Startup
Lean startup is THE ultimate method for founders to launch a lean and, most importantly, a customer-centered startup. The method can be traced back to Eric Ries who managed to revolutionize the development of new products and services in almost all industries using the lean startup approach.Letter of Intent
The letter of intent (LoI) – also called term sheet or memorandum of understanding – is foremost a type of preliminary contract. As a written statement of intent between two parties, it serves to document a basic interest in carrying out a transaction, a negotation, or the general finalization of a contract.MVP
A “minimum viable product” (MVP) is a protoype that enables realistic testing of a product/service with customers under realistic conditions. Only functions that are strictly necessary for the product’s purpose are implemented. This can just as well be a single function.Non-Disclosure Agreement (NDA)
In a NDA (non-disclosure agreement), two parties agree on which information remains classified and cannot be shared with third parties during negotations or upon contract finalization. For the most part, this concerns internal processes and agreements.Pitch Deck
Founders use a pitch deck to focus the most important aspects of their business plan in a concise presentation. Using the pitch deck, founders can convincingly present their startup to potential investors, pitching their idea essentially.
Pivot
A pivot describes a process that is used to re-align various departments of a young company. The business model is changed substantially to adapt to new developments or a new situation, all in order to achieve more success. However, the model shouldn’t be completely reinvented but rather adjusted to the real demands of a concrete target group.Product Roadmap
A product roadmap is a popular tool for startup project management. Using the roadmap, founders and their teams decide what to prioritize in product development and how to implement the product vision. The product roadmap contains all important information on the product or project and its progress – usually, the overview is divided into weekly steps.Problem-Solution Fit (PSF)
The problem-solution fit (PSF) is a core concept within the lean startup method. The PSF serves as proof of concept that a customer’s problem really exists and the startup’s service/product is accepted as a solution for its problem by the target group. In its simplest application, the PSF raises three questions: Does the problem really exist? Does the proffered solution actually solve this particular problem? Would future customers prefer this solution to other alternatives?Product Market Fit (PMF)
The validation of the product-market fit (PMF) is a startup’s most important milestone. It’s tangible proof that a product has reached sufficient developmental maturity for the market. Prior to the PMF, founders exclusively focus on customer research and product development. After reaching the PMF, they can reach for larger investments, expand marketing activity, and accelerate company growth.
SEO
Search engine optimization, SEO in short, refers to all optimization measures that help position a website higher up in the list of (unpaid) search engine results for relevant keywords. To make the best use of SEO measures, websites must be built in a way that lets search engines (such as Google or Bing) read and analyze their content optimally.SEA
Search engine advertising – SEA – refers to all paid search engines results that are displayed above or under organic results. If you want to get the much coveted first slot in Google’s search enginge results, you have to buy an ad with Google Ads. Your result will be marked as advertisting accordingly, however.Startup
“Startup” usually refers to recently launched companies that are in the early stages of their company development and have huge potential for growth. There are many different responses to the question what a startup actually is. The most common definitions often mention the following four factors: the company is not older than 5 years (sometimes extended to 10 years), the founders have only limited financial and personnel resources at their disposal, the company has an innovative approach, and the business idea is scalable.Total Available Market (TAM)
TAM is short for “total available market” or “total adressable market”. The term is used to determine the potential revenue opportunities for a product or a service.Unicorn
Unicorns are startups which receive a valuation of at least 1 billion US dollar, and that even before being publicly traded or achieving an exit. Worlwide, the valuation is based on US dollars. If investors are willing to pay at least 10 million dollars for a 1% share of your startup, your startup has reached the unicorn-status, at least purely arithmetically.
Unit Economics
Unit economics is a powerful tool that can help to understand, and even predict, a company’s success and future viability. Unit economics describe the earnings and spendings of a company – not in total, however, but with reference to individually identifiable units.Value Proposition
A value proposition is a promise that summarizes all usage and value benefits that your product poses for potential customers. In the New Economy with its digital transformation boost and excessive job offers, company purpose becomes ever more relevant. Which is why it’s tantamount to precisely define what your startup stands for and why customers should buy your solution.Venture Capital
Venture capital refers to part of the private equity sector where private equity firms invest into a not-publicly traded company and share in their profits. In this context, venture capital is a time-limited equity capital investment into a young, innovative, and often technologically-oriented company that is still growing (and not yet publicly traded) – startups, basically.Vesting
Once investors have decided to support a startup financially, they have a “vested” interest to keep specific team members and especially the founders in the company. One method to ensure this outcome is called “vesting”. Agreements that specifiy that a person receives company stock options contingent upon them staying with the company are called vesting clauses. Accordingly, the period during which the vesting clause remains in force is called the vesting period.More Than Buzzword Bingo
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