Updated 21 June 22
As a startup founder, it’s important to know what you’re talking about and to have confidence in the terminology that you are using. But, if you’re new to the startup world then some of the jargon, acronyms, and terminology you come across can be a bit overwhelming and confusing. Fear not, we’re here to help. Think of this list as your guide to startup jargon, or the ABCs of the startup world. So, let’s get into it!
Accelerator - Startup accelerators are business programmes that provide education, connections, mentorship, and financing for early-stage, scalable tech companies.
Bootstrapping - Bootstrapping is a way of funding your startup without the aid of investors, by using your own personal savings and credit.
Co-founder - A co-founder is someone who starts the business with you and fills the business or knowledge gaps that are required to help your startup succeed.
Disruptive technology - This is anything that is innovative and offers something completely new to the market through technology. Perfect examples of this are companies like Uber disrupting the taxi industry and Airbnb disrupting the hotel industry.
Exit - This is when a founder or investor sells some or all of their shares in the startup, usually through acquisition (selling the company), a merger (when one company joins another), or an IPO (when the company goes public, selling shares within the stock market).
Founder - That’s you! The person who had the initial idea for and created the company.
Growth Hacking - A marketing technique that focuses on rapid scalable growth through creative and low-cost tactics to acquire and retain customers.
Hardware - This is any physical product or device, as opposed to software which is a digital product. Most ‘hardware’ startups will require both hardware and software development to bring the product to market. Think of products like FitBits, Nest Thermostats, or iPhones.
IP - This stands for Intellectual Property, which is anything that is legally yours such as patents, trademarks, and copyrights, or if you’re KFC your secret gravy recipe.
Jargon - Well, I hope you’d know the meaning of this one if you’ve read the opening paragraph. But just in case you’re unsure jargon means specific terminology that is used by a select group of people, which can be difficult for others to understand.
Knowledge capital - This is anything that adds value to a business or can give you an unfair advantage that is a direct result of personal experience, skills, knowledge, and learning.
Lean startup - The methodology of building a startup through a process of testing, revising, and discarding hypotheses about the business by running lean startup experiments. Continually gathering feedback and rapidly iterating on products. This strategy greatly reduces the chances that start-ups will spend a lot of time and money launching products that no one actually will pay for.
MVP - This ties in nicely to the last point! MVP stands for Minimum Viable Product. This is your product in its first and often simplest form, often not fully formed and used only to attract early adopters and validate assumptions about product features and functionality.
Negative equity - This is when the value of an asset falls below the amount of the loan or financial agreement taken out against it. Negative shareholder equity is when a company owes more to the shareholders than its assets can cover.
Overheads - This is an expense that is not directly attributable to your startup's product or service. This could include rent for an office, gas and electricity bills, a warehouse for stock, etc whereas direct costs would be things like the various parts and labour to assemble your product.
Pitch deck - This is a presentation that helps potential investors learn about your startup in a succinct way.
Qualified lead - This is someone who could become a potential customer who has shown interest in your startup and completed actions to qualify them as a good quality lead for your startup.
ROI - This stands for Return On Investment. ROI is typically used as a Key Performance Indicator (KPI) to evaluate the efficiency of an investment.
SaaS - Another acronym! SaaS stands for Software as a Service. Essentially, it’s a cloud-based method of providing software, typically via subscription and through a browser or app. SaaS businesses have immediate access to a global market and can scale without increasing product delivery costs. Examples include Slack and Dropbox.
Target Market - This is the group of people with shared characteristics that you are aiming your product at. When creating your target market you need to consider demographics, geographics, and psychographics to really understand what compels your consumers to invest in a brand.
Unicorn - Unlike the mythical creature, startup unicorns are incredibly rare but not fiction. Unicorns are startups that are valued at over $1 billion.
Value Proposition - This is a statement that summarises why your consumers should buy from you and what sets you apart from your competitors.
Wizard of Oz MVP - An MVP that creates the illusion that the user is interacting with a fully-developed tech product. Whilst behind the scenes the product or service is being delivered manually. This allows startups to test ideas without having to build them, often expensive, software needed until they’ve validated that it’s required.
X-factor - I’m not going to lie to you X was a hard letter to fill, so I present to you ‘X-factor’. This is something that sets you apart from competitors when you are pitching for investment, something that makes potential investors think “Wow, I want a slice of that pie.”
Yo-yo market - This is a slang term for a very volatile market e.g. “it’s risky to invest in crypto startups at the moment as it’s a complete yo-yo market”.
Zombie - Last but not least, a Zombie is a startup that generates small amounts of revenue, enough to break even but not enough to create a good return on investment. Their growth is stagnant and they are constantly ‘eating what they kill’ or in other words, using up their revenue.
I hope this helped you gain some insight into startup jargon. Just remember, you need to be a growth-hacking founder with disruptive technology and lots of qualified leads, avoiding a yo-yo market with the hopes of becoming a unicorn, not a zombie… or something like that!
Still confused or looking for a definition of something not covered here, fear not - this isn’t our first jargon-busting rodeo. Take a look through our Tech Startup Jargon buster that’s broken down by the stage your startup is at - handy!