May 24, 2016 at 8:31 pm

13 Startup Acronyms Every Wantrepreneur Must Know

13 Startup Acronyms Every Wantrepreneur Must Know

You’re a wantrepreneur. You dream of being an entrepreneur and starting your own business, but you’re still in the “want” stage and not the “doing” stage. You have the idea, or in my case many ideas, but you don’t know where to start.

The first thing you find when you begin research life as an entrepreneur is that everyone is talking in acronyms! Keeping track of all these new terms is frustrating, but it’s a must if you hope to enter that world.

I’ve created this list of 13 startup acronyms and their definitions to help you along your journey. It will help you understand the world of a startup founder and the acronyms and definitions they use. This list can be used for all types of businesses, but as always, I am focusing on tech startups.

Product Market Fit (PMF)

PMF is the term that represents what every startup wants to achieve. PMF means that you have solved a problem and people are willing to pay for your solution. If you are getting a repeatable number of customers that pay for your solution and your revenue is more than your expenses, then you’ve achieved PMF. The bonus — you have profit to expand or scale up your business.

Minimal Viable Product (MVP)

MVP is one of the most important key terms to tech startups. MVP is the basic functionality of your solution. It means the product you are developing is ready with the minimum amount of functionality you are willing to accept and put into consumers hands. This is where you learn the most from your product and how it relates to your potential market. Do the consumers like your idea? Is it meeting some basic needs the consumer has and are they willing to pay for this new product or service?

Monthly Recurring Revenue (MRR)

I love this term! MRR means your your startup has achieved the holy grail of PMF and now you are receiving recurring revenues or sales each month. Basically you have repeatable money coming into your startup each month.  

Annual Run Rate (ARR)

This is another term I love. ARR is when you total your MRR at the end of the year. If you have achieved MRR and it’s consistent each month, you can forecast your expected ARR. But be cautious when you do this because as much fun as it is to project both your ARR and MRR, actuals may vary due to buying trends and competition. But it’s still fun to do.

Software as a Service (SaaS)

Saas is when an application is hosted on a company’s server environment, either owned or leased, and the application is available via the Internet. Startups use this model because renting space on a hosted infrastructure means there are no hardware maintenance costs.

Pay Per Click (PPC)

PPC is an advertising technique. Ads are placed on browsers and websites and the business only pays when a user clicks on the ad. Pay per click is also known as cost per click. Startups can use these ads to generate income by offering advertising space on their website, which can generate income if their visitors click on the ad. The more visitors on your website, the higher potential of generating supplemental income from your website.

Cost Per Conversion (CPC)

CPC is the cost of generating traffic divided by the number of sales or conversions. Simply put, if you spent $1,000 on advertising to get 1,000 leads but only converted three leads to sales, your CPC was $333. The lower the CPC, the better your results.

Business to Business (B2B)

B2B is one business selling services or products to another business. In my opinion, SaaS startups have a much better chance of success with the B2B model than a B2C model.

Business to Consumer (B2C)

B2C is when a business sells its products or services directly to the consumer. There are many large tech companies that do both B2B and B2C, such as Google, Microsoft and Amazon.

Return on Investment (ROI)

This is one of the most overused terms I have come across. ROI is a profitability ratio. There are a number of ways to calculate ROI, but the easiest way is to divide net profit by total assets. Obviously, you want your ROI to be high. A high ROI is what investors look for when deciding to invest in a company.

Venture Capitalists (VC)

VC are investors that can provide your startup with needed funds or capital to expand a service or product offering, enter a new market or a infuse the company with cash.

User Interface (UI)

UI is everything your customer can see and use on your application or product. The overall goal of an application startup is to have an easy to use UI that is also very pleasing to the eye. If your UI is too complex and hard to follow then your customer may not use or purchase your product.

User Experience (UX)

UX is the overall experience your customer has with your product. Does your product solve the customer’s problem? If yes, then you have yourself a great UX and UI! A good UX will lead to conversions and help you generate revenue. The better the UI and UX the happier your customers will be.


These are only a few of the many acronyms and definitions you will come across in your journey to entrepreneurship. Understanding these terms will help you while developing an application to sell to businesses or consumers. Knowing the lingo will help you make sense of other successful startup entrepreneurs and also help you understand the business side of a startup. 

Remember, having a great tech solution is only the first step. It’s what you do with your MVP that will bring you the MRR.

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