Founder's Glossary
Essential terms every founder should know. From MVP to SaaS, understand the language of entrepreneurship.
Browse by Letter
A
AI-Native
Built with AI as a core foundation
AI-Native refers to applications or businesses that are designed from the ground up with artificial intelligence as a fundamental component of their architecture and value proposition, rather than having AI features bolted on as an afterthought.
API
Application Programming Interface
Application Programming Interface (API) is a set of protocols and tools that allows different software applications to communicate with each other. In the context of AI, APIs often provide access to machine learning models and services.
B
B2B
Business-to-Business sales model
Business-to-Business (B2B) refers to a sales model where businesses sell products or services to other businesses rather than individual consumers. This model often involves longer sales cycles, higher price points, and focuses on solving business problems rather than personal needs.
B2C
Business-to-Consumer sales model
Business-to-Consumer (B2C) is a sales model where businesses sell products or services directly to individual consumers. This model typically involves shorter sales cycles, lower price points, and focuses on personal needs and experiences.
C
CAC
Customer Acquisition Cost
Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including all marketing and sales expenses divided by the number of customers acquired. It's a key metric for understanding the efficiency of your customer acquisition efforts.
Circle of Trust
Marketing framework for building relationships
Circle of Trust is a marketing methodology that moves potential customers through progressive stages of engagement, from initial attention through private conversation, exclusive offers, flagship services, networking, and potential partnerships, building deeper relationships at each level.
Conversion Rate
Percentage of visitors who take desired action
Conversion Rate is the percentage of website visitors or prospects who complete a desired action, such as making a purchase, signing up for a newsletter, or downloading content. It's a key metric for measuring marketing effectiveness.
CRM
Customer Relationship Management
Customer Relationship Management (CRM) is a system or strategy for managing all interactions with current and potential customers. CRM software helps businesses organize customer data, track sales opportunities, and manage customer communications.
E
ERP
Enterprise Resource Planning
Enterprise Resource Planning (ERP) is integrated software that manages main business processes in real-time. ERP systems typically include modules for accounting, procurement, project management, and supply chain operations.
G
Go-to-Market
Strategy for launching products to customers
Go-to-Market (GTM) strategy is a comprehensive plan that outlines how a company will reach target customers and achieve competitive advantage when launching a product or service. It includes pricing, sales channels, marketing tactics, and customer acquisition strategies.
Gross Margin
Revenue minus cost of goods sold
Gross Margin is the difference between revenue and the cost of goods sold (COGS), typically expressed as a percentage. It represents the portion of revenue that exceeds the direct costs of producing goods or services.
H
Hallucination
AI generating false or made-up information
AI Hallucination occurs when artificial intelligence systems generate information that appears plausible but is factually incorrect or completely fabricated. This is a common limitation in current language models and can lead to misinformation if not properly managed.
K
KPI
Key Performance Indicator
Key Performance Indicators (KPIs) are measurable values that demonstrate how effectively a company is achieving key business objectives. They help founders track progress and make data-driven decisions.
L
LLM
Large Language Model
Large Language Model (LLM) is a type of artificial intelligence model trained on vast amounts of text data to understand and generate human-like language. Examples include GPT, Claude, and other conversational AI systems.
LTV
Customer Lifetime Value
Customer Lifetime Value (LTV) is the total revenue a business can expect from a single customer throughout their relationship with the company. It's calculated by multiplying the average purchase value by the number of repeat transactions and the average retention time.
M
MOAT
Competitive advantage that protects business
A MOAT is a sustainable competitive advantage that protects a business from competitors, similar to how a moat protects a castle. This can include network effects, brand strength, regulatory advantages, or proprietary technology.
MRR
Monthly Recurring Revenue
Monthly Recurring Revenue (MRR) is the predictable revenue that a subscription-based business expects to receive every month. It's a key metric for SaaS companies to track growth and financial health.
MVP
Minimum Viable Product
Minimum Viable Product (MVP) is the most basic version of a product that can be released to test a product hypothesis with minimal resources. It includes only the core features necessary to satisfy early adopters and gather feedback for future development.
O
OPEX
Operating Expenses
Operating Expenses (OPEX) are the ongoing costs for running a business, including rent, salaries, utilities, and software subscriptions. Unlike capital expenses, OPEX are fully deductible in the year they're incurred.
Outcome-Based Pricing
Pricing based on results achieved
Outcome-Based Pricing is a pricing model where customers pay based on the results or outcomes achieved, rather than for access to software or time spent. Examples include paying per successful resolution or per conversion generated.
P
Personal Brand
Individual's professional reputation and identity
Personal Brand is the unique combination of skills, experience, and personality that an individual wants to be known for. For founders, it's a powerful tool for building trust, attracting customers, and establishing thought leadership in their industry.
Product-Market Fit
When product satisfies strong market demand
Product-Market Fit occurs when a product satisfies a strong market demand. It's the point where customers actively seek out your product, retention rates are high, and growth becomes more predictable and sustainable.
R
ROI
Return on Investment
Return on Investment (ROI) is a financial metric used to evaluate the efficiency of an investment. It's calculated by dividing the net profit from an investment by the initial cost, typically expressed as a percentage.
S
SaaS
Software as a Service
Software as a Service (SaaS) is a software delivery model where applications are hosted by a third-party provider and made available to customers over the internet. Customers pay a subscription fee to access the software rather than purchasing it outright.
Scope Creep
Uncontrolled expansion of project requirements
Scope Creep is the uncontrolled expansion or addition of features, requirements, or work to a project beyond its original scope. This often leads to delays, budget overruns, and reduced focus on core objectives.
SEO
Search Engine Optimization
Search Engine Optimization (SEO) is the practice of optimizing websites and content to rank higher in search engine results pages. It involves both technical improvements and content strategies to increase organic visibility.
Startup
Early-stage company
A startup is a newly established company designed to develop a unique product or service and bring it to market. Startups are characterized by high uncertainty, rapid growth potential, and the need for significant innovation and risk-taking.
T
TAM
Total Addressable Market
Total Addressable Market (TAM) represents the total market demand for a product or service. It's the maximum revenue opportunity available if a company achieved 100% market share in its target market.
Technical Debt
Cost of choosing easy solutions over better ones
Technical Debt is the implied cost of additional rework caused by choosing an easy or quick solution now instead of using a better approach that would take longer. Like financial debt, it accumulates interest over time.
Token
Unit of text processed by AI models
In AI contexts, a Token is a basic unit of text that language models process. It can be a word, part of a word, or even punctuation. AI services often charge based on token usage, making it important for cost management.
V
Vertical SaaS
Industry-specific software solutions
Vertical SaaS refers to software-as-a-service solutions designed specifically for a particular industry or niche market, such as healthcare, legal, or construction, rather than serving broad horizontal markets.
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