Having a great pitch is important for a company seeking external capital. Yet more often than not, you will come across a couple of startup jargons. Some you might have heard but not taken the time to really find out what they mean. As a startup founder or part of a startup, it is very paramount that you keep some of these in your vocabulary because you never know when they’ll come in handy.
Below we have identified some of the most commonly used startup jargon that we think you should know. You should note that the list is exhaustive. This is because, just like the startups themselves, new jargons are being coined every day.
No, it has nothing to do with a vehicles and speed. It’s a program or place for startups to grow through availing opportunities like; work space, mentor-ship and sometimes funding. It is common for people to confuse incubators, hubs, and acceleration programs, especially in Africa. This is because there’s no infrastructure to support incubators, therefore those that set them up are forced to do all the work meant to be done by the other support structures.
2. Pitch Deck
This refers to a slide-share or power point presentation that covers all aspects of your business in a concise and compelling way with maximum impact. Pitch decks are normally short with a recommendation of not more than 10 slides. This is because the people you’ll pitch to most of the time don’t have time to “waste”
This simply means a startup using capital from friends, family or personal investment to run its operations. Due to the scarce funding opportunities on the continent, most startup founders in Africa are actually forced to use this route in order to get their startups off the ground though some don’t know that they’re bootstrapping
4. B-to-B & B-to-C
B2B stands for “Business to Business” literally meaning your company’s business model is to sell products/services to other companies. Take an example of companies that create accounting software. Their target market isn’t an individual user. They target businesses. While B2C means “Business to Consumers” referring to your company selling directly to the individual. The good example on the continent would be the e-commerce giants Konga and Jumia.
5. Burn rate and Churn rate
Burn rate refers to how fast your company is blowing its cash. Investopedia gives a more comprehensive understanding of burn rate. Check out it out here. While churn rate used commonly in subscription-based business model means customers lost subsequent to acquisition. Similarly, Investopedia gives a more comprehensive understanding of this. Check it out http://www.investopedia.com/terms/c/churnrate.asphere.
Also read about: THINGS TO KNOW BEFORE LOOKING FOR FUNDING
Again, NO. This has nothing to do with basketball or most valuable player. It stands for Most Viable Product meaning a working version/prototype of the company product. Of course, a Minimum Viable Product is subjective. But, the advice is that you start with something that’s as basic as possible. Reid Hoffman, Founder of LinkedIn and host of Masters of Scale podcast, has a theory that goes; If your first release doesn’t embarrass you, then you’re late. Literally meaning that your MVP shouldn’t be perfect.
Something that completely changes the way society does something and has impact on millions of lives. Though many confuse it with revolutionary. Let’s take an example of Mobile Money. It has disrupted the banking industry in the sub-Saharan region. It is also common practice for every Tom, Dick, and Peter working on something to call it disruptive.
This is simple using established technology or infrastructure for an entirely new purpose. It could mean refocusing strategic direction resulting from unprecedented market forces. There are a couple of startups that have pivoted their models. Some move from being a product to service based or from being customer focused (B2C) to business focused (B2B) and vice versa.
This stands for Return on Investment. It means what investors expect to get for what they put in. That’s the traditional meaning. Although you’ll find that your colleagues also are using it within your circles when it comes to negotiating partnership agreements and other things.
10. Value proposition
This is the most unique and attractive feature of your product. The stronger the value proposition, the more likely your startup is to succeed.
11. Lean Startup
Sometimes referred to as Growth Hacking. Its involves proving your business concept as you go, understanding what works best for your market. Until recently, the lean startup has been a subjective topic. But, there’s now a growing movement behind this concept to the extent that some already established companies have started to replicate the good practices. For a comprehensive understanding of this concept, Eric Ries’s The Lean Startup is a good read.
Remember, using jargon is okay within your group as it shows a common understanding. But using it deliberately to others who will not understand you is somewhat pointless.