The Startup Dictionary – Learning the Lingo #3
This is the next update to our Startup Glossary.
A few months ago we launched our very own startup glossary to help others learn the lingo. This is the latest installment of the commonly used startup buzz words being used in the community. We plan to update the main startup glossary later in the week. Please contact us if you have any submissions or suggestions.
The following are some of the startup phrases or startup buzzwords we are aiming to include in future updates:
Low Hanging Fruit
Series A Financing
+ A +
A/B testing, split testing or bucket testing is a method of marketing testing by which a baseline control sample is compared to a variety of single-variable test samples in order to improve response or conversion rates. (Source: Wikipedia)
At its core, A/B testing is exactly what it sounds like: you have two versions of an element (A and B) and a metric that defines success. (Source: Smashing Magazine)
+ C +
The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet. (Source: Oxford Dictionaries)
Kickstarter is probably the most well known and largest funding platform for creative projects.
+ E +
An early adopter, lighthouse customer or trendsetter is a person who embraces a given company, product, or technology before most other people do. Early adopters form an early element of the technology adoption life cycle, a model that portrays the spread of new ideas and technology. (Source: Wikipedia)
The other categories include:
+ F +
Freemium is a business model by which a product or service (typically a digital offering) is provided free of charge, but a premium is charged for advanced features, functionality, or virtual goods. The word “freemium” is a portmanteau combining the two aspects of the business model: “free” and “premium”. (Source: Freebase)
Funding or financing is when a business needs an external source of finance (or borrowings) where the capital needs of the business exceed its own available resources and those of any shareholders. (Source:Business Dictionary)
Well known venture capitalist (and co-founder of Ycombinator) Paul Graham outlines startup funding sources into the following categories:
Friends and Family
Seed Funding Firms
Venture Capital Funds
Other – Includes grants
(Source: Paul Graham)
The amount of money you achieve from sources can vary, but may follow the below guidelines:
Angel Funding (usually equity) – £25,000 to £500,000
Commercial Lending – various
Venture Funding (usually loan, convertible loans or equity) – £500,000 to £5,000,000
Crowd Funding (usually direct investment) – £5,000 to £1,000,000
(Source: London Funding Conference)
+ G +
“Gamification involves applying game design thinking to non-game applications to make them more fun and engaging. Gamification can potentially be applied to any industry and almost anything to create fun and engaging experiences, converting users into players.” Some startups utilise gamification to incentivise user engagement.
+ H +
Horizontal is a term often used to describe ones business model or business strategy. In this context it focuses on the breadth of one’s product and market.
Horizontal strategies aim to sell a product across multiple markets (moving left to right across markets). Horizontal strategies may suit products that appeal to different sorts of customers, not just a single market segment or industry.
In contrast, vertical strategies aim to sell a product in just one market (moving up and down across a product).
(Source: Entrepreneurs Journey)
“The set of skills which an employee acquires on the job, through training and experience, and which increase that employee’s value in the marketplace.” It may be considered an economic view of a human being – in terms of knowledge and creativity contributions towards an organisation.
(Source: Investor Words)
Relates to a “well defined community with its primary focus directed toward the concerns of its residents”.
Current trends apply the terms when referring to applications that make use of mobile and GPS technologies. Such applications connect users to nearby products or services.
+ M +
Minimum Viable Product (MVP)
A Minimum Viable Product has just those features that allow the product to be deployed, and no more. The product is typically deployed to a subset of possible customers, such as early adopters that are thought to be more forgiving, more likely to give feedback, and able to grasp a product vision from an early prototype or marketing information.
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