KEY TERMS AND THEIR DEFINITIONS

Wantrepreneur: In short, a wantrepreneur is an idea person. No matter whether they have a

technical or non-technical background, they’re always planning to launch a startup, they have
many ideas but they haven’t started yet. Many wantrepreneurs stay wantrepreneurs. Don’t be a
wantrepreneur!

Validation: There are many metrics that signal idea validation but at the end of the day, it’s about
proving there is a need and demand for the product. One of the strongest validation signals is when
people pay for the product, use it and recommend it to others with similar needs.
Scalability: The goal of every startup is to build a scalable business model. Thanks to technology
and automation, a startup product can serve hundreds of thousands of users without needing the
same number of service providers. A startup is called scalable when it creates and validates a
repeatable business model that addresses user needs around the clock.
Incubator: Startup incubators begin with companies (or even single entrepreneurs) that may be
earlier in the process and incubators usually help them overcome early stage challenges. Incubators
tend to offer longer term advisement programs that help you with mentorship, connections and
resources like a co-working space. For example, Plan-9 run by Punjab Information Technology
Board (PITB) and P@SHA’s The Nest i/o which is sponsored and funded by Google, Samsung
and the U.S. State Department.
Accelerator: If you’re launching a startup, accelerators can help you move your idea quickly by
providing you with mentorship and fundraising opportunities during a few months program.
Accelerators are focused on speed and fundraising and usually houses start-ups that need advice
related to scalability and growth. For example, Invest2innovate (i2i) by Kalsoon Lakhani, Plan-X
of PITB and The Founders Institute.
Unicorn: There are only a few startups that reach and exceed a billion dollar valuation. Those
startups are called unicorns. For example, Airbnb, Space X, DJI etc
Dragon: There’s an even smaller number of startups that raise over one billion dollars in one
single round of funding. Those are called Dragons. Uber is one of those companies.
Iteration: At the end of the day, an idea is just an educated guess. What are the odds that
entrepreneurs will guess right all the time? When you realize you need to make a minor change to
the product, the target or any important aspect of the business model, you are iterating.

Pivot: Sometimes we’re confident the plan is right but quickly realize it isn’t. When there’s a
major change to the business model like the way you make money, ideal customer profile or the
solution (product), you are pivoting. Entrepreneurs must be open to iterations and pivots even if
they had spent a lot of resources getting the latest version right. For this reason, spending too much
time and money testing ideas or versions of a product is not a wise execution strategy. Instead,
build, test and adjust quickly.
Disruption: If you ask what investors look for in a startup, its mainly the disruptive capabilities
of a business. Founders aim to create products and business models that introduce an innovation
that make a significant difference in the market and the world. Take the example of Uber that
completely changed how people commute.

Lean: The core idea is to maximize customer value while minimizing waste. Simply, lean means
creating more value for customers with fewer resources. A core component of Lean Startup
methodology is the build-measure-learn feedback loop.

Agile: While lean describes the business side of the build-measure-learn loop, agile development
focuses on the development part of the loop and entails building incrementally and iteratively
while testing quickly.

Exit: Entrepreneurs build startups for many reasons. Many want to make a major impact in the
world while others, in addition to the impact, they aim to exit their ventures either through an IPO
or mergers and acquisitions.

Acqui-hire: One of the most valuable assets in a startup, especially in the early stages, is the team
behind it. Building a passionate team that includes members with complementary skills isn’t easy.
Many established companies decide to aquire smaller firms or startups just for the human capital
(team) they built. Such acquisitions are called acqui-hire.

Alpha release: Since continuous testing is important to the success of software, teams run alpha
tests internally early on before releasing the beta version of the product for public testing.

Beta release: Having conducted internal alpha tests, beta tests involve customers or potential users
who provide feedback and help the team make changes before launch.

Product/Market Fit: This term is used when a company is in a market where customers are
buying its products/services at the right speed and the right price.

Growth Hacking: A successful marketing campaign achieves its target at a cost below the return
generated. Growth hackers use unconventional strategies to fuel exponential growth at costs
significantly lower than the “average” amounts needed to accomplish the same results.

Evangelists: In the product adoption lifecycle, you find different categories of buyers adopting
the product in different time periods. The evangelists are those who come early on, they are the
first to believe in the product and convince others to adopt it.

Startup Ecosystem: A startup ecosystem is formed by people, startups in their various stages and
various types of organizations in a location (physical and/or virtual), interacting as a system to
create new startup companies.

Traction: Simply put, traction refers to the initial progress of a startup and the momentum it
builds as it grows. When you have “traction”, you have a clear indicator that your product or
service is viable, that you’ve found some level of product/market fit, you’re getting attention
from your target audience, and you’re growing your brand.
Customer Acquisition Cost-CAC: One of the most important metrics in business is the customer
acquisition cost. In other words, how much does it cost you to acquire a customer? Without
knowing this number, it is hard to budget marketing campaigns or make any projections.

Churn Rate: One of the most asked investor questions is, what is your churn rate? That is, what
percentage of your paying users cancel the service. Your goal is to make churn as low as possible.

Burn Rate: One of the most asked investor questions is, what is your burn rate or how much do
you project you will burn over the next 18 months? It simply means the amount the startup will
spend over a predetermined period.

Share or Equity Dilution: When a company issues additional shares of stock, it can reduce the
value of existing investors' shares and their proportional ownership of that company. This common
problem is called dilution. It is a risk that investors must be aware of as shareholders. It's important
for investors to take a closer look at how dilution happens and how it can affect the value of their
shares.

Co-working spaces: Co-working is an arrangement in which several workers from different

companies share an office space, allowing cost savings and convenience through the use of
common infrastructure, such as equipment, utilities, and receptionist and custodial services, and
in some cases refreshments and parcel acceptance services.

Minimum Viable Products (MVP): To test ideas quickly without spending a lot of resources in
building a product that may or may not work, entrepreneurs are encouraged to create a minimum
viable product. It’s the first versions of the product that only include the core features that aim to
test the riskiest assumptions before building the next versions with more advanced features.

Crowdsourcing engages a larger crowd for a common goal allowing the business to access a wide
variety of skills and experience. Sometimes it is used to engage the customers in idea generation
or new product development e.g., McDonalds, Starbucks, Lays etc.

Conversion Rate: The number of customers that, after visiting a company's site or receiving its
newsletter, turned into paying customers.

An intrapreneur (also referred to as inside entrepreneur) is an employee within an organization

who has certain entrepreneurial skills and who is given the responsibility and authority to use those
entrepreneurial skills to develop a new product without incurring the risks associated with it.