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Understanding Cryptic Startup Terms

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The startup world throws around a lot of jargon.

Some of it is fluff, some of it is important.

Rather than pretend like you know what people are talking about, I’ve found it’s good to make sure I actually understand the terminology.

So, here’s a few essential startup terms you should know.

KPI

Stands for Key Performance Indicator. This is a measurable value that indicates how effectively your company or product is achieving its business goals.

Example: I would guess a main KPI of AirBnB is guests per night (how many people are staying on an AirBnB property on any given night).

The idea is that you can focus on improving key indicators, which should then directly influence your company’s goals.

Churn Rate

Your churn rate is the percentage of customers who stop subscribing to your service in a given time period. You can calculate the churn of anything (like revenue or employees), but it’s most often referring to customers.

This is considered the main enemy of any subscription company.

Example: As of this writing, Buffer’s monthly user churn is 5.9%.

Your acceptable churn rate depends entirely on your specific industry and company.

OKR

Stands for Objectives & Key Results. This is a framework for setting, communicating, and monitoring goals.

Objectives are goals, which tell you where to go. Each objective has key results, which indicate how you’ll get there.

Example:

Objective: Increase our recurring revenue.

Key Results:

  • Share of monthly subscriptions increased to 85%.
  • Average subscription size of at least $295 per month.
  • Reduce churn to less than 1% per month.

More examples.

MRR

Stands for Monthly Recurring Revenue. This is income that a company an reliably anticipate every 30 days. MRR is intended for products or services that have a defined price and recurring term.

Example: As of this writing, Treehouse’s MRR is $2M+.

To put two terms together, your MRR churn is the erosion of your monthly recurring revenue.

There is also ARR: Annual Recurring Revenue, not to be confused with Annual Run Rate (below) which even uses MRR in its calculation.

USP

Stands for Unique Selling Proposition. This refers to the unique factor of your company or product that sets you apart from all your competition. It’s the answer to the question, “Why should I do business with you instead of anyone else?”

Example: M&M’s “Melts in your mouth, not in your hand.” M&Ms use a patented hard sugar coating that keep chocolate from melting in your hands.

ARR

Stands for Annual Run Rate. This is a method used to project future revenue based on your current revenue. To get it, simply multiply your MRR by 12.

While that might seem inaccurate, ARR is a helpful tool to get an idea of long term growth and visualize the size of your business.

Example: If a company’s MRR for last month was $100k, its current ARR $1.2M.

Burn rate

Your burn rate is the rate at which your company spends money in excess of income. It’s a measure of negative cash flow. It is usually quoted in terms of cash spent (lost) per month.

Burn rate a good measuring stick for a company’s runway — the amount of time it has before it runs out of money.

Example: If a company has $1 million in the bank, makes $100k per month, and spends $200k per month, it has a burn rate of $100,000/month. It also has a runway of 10 months.

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About the Author

This article was written by Jordan Bowman. 

Callum Connects

Clairine Runtung, Investment Manager of Convergence Ventures

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Early-stage venture capitalist, Clairine Runtung, shares her story and passion for helping build Indonesia’s technology ecosystem. In her role, she helps local entrepreneurs looking to grow their business, while also finding time to coach and mentor young women in venture capital through an organisation she co-founded in early 2017.

What’s your story?
Having lived in 4 different cities within 3 different countries throughout my career working in finance, I had always been drawn to not only numbers but also diversity, people and their stories. When an opportunity came about for me to join a tech VC firm in Jakarta, I jumped at the chance, after working for a number of years in a boutique investment consulting firm, a global asset management firm and a non-profit foundation.

I currently lead the investment team at Convergence Ventures, an Indonesia-based early-stage venture capital fund. My work includes sourcing deals, conducting due diligence, reviewing legal documents and most importantly, working with my colleagues in Investment, HR and Business Development teams to support our founders. My job requires relentless intellectual curiosity, analytical and communication skills, and ultimately passion to help the shaping and building of Indonesia’s tech ecosystem.

Early in 2017, I co-founded a Young Women in VC (renamed SheVC Indonesia in September 2017, as part of the global Pan-Asian SheVC network), focused on networking, mentoring and building a community for junior to mid-level female VCs. Our local membership grew to over 20 people within 6 months, and I personally mentored 3 young women just joining the industry. Aside from tech VC, I am also involved in being a Council for Yayasan Cinta Anak Bangsa, a non-profit organization focusing on youth and education, as well as being a mentor and a judge to a number of local tech startup events and competition. Beginning September, I will be attending Yale School of Management to pursue a 2-year MBA program.

What excites you most about your industry?
The never-ending learning, rapid progress, and people attempting to solve real problems through technology. I cannot wait to see what will unfold within tech-VC space in Indonesia in the next 5-10 years. My team and I think we are following China’s growth trajectory though to get there we need major support from the Government and foreign investors.

What’s your connection to Asia?
I was born and raised in Jakarta, Indonesia. I worked for 2.5 years in Singapore. I was educated in the United States and lived there but I am still very much deeply-rooted in Asia. After grad school, I plan on moving back to Asia for sure.

Favourite city in Asia for business and why?
Jakarta and Singapore for two extremely different reasons.
Jakarta, because the city’s urban challenge actually shapes you to become a resilient hustler. Not to mention the fact that the city has a dynamic tech VC landscape that’s rapidly evolving year by year.
Singapore, because I take pleasure in how efficient, effective and structured the city state is!

What’s the best piece of advice you ever received?
“The only way out is through”
“Leave your mark, build a legacy, no matter how tiny you think it is.”

Who inspires you?
My dad and everyone around me who was not born with silver spoons in their mouth.

What have you just learnt recently that blew you away?
It’s amazing how your body can truly adjust to the power of your mind. I have recently increased the frequency of my Intermittent Fasting routine, from only once a week to twice a week. Essentially, twice in a week I’d fast between 22-24 hours. Though skeptical and challenging at first, after a month, I rarely feel hungry/starving on those two scheduled fasting days. Interestingly, I also feel the most productive at work on days that I am fasting.

If you had your time again, what would you do differently?
Nothing. If there is anything I’d like to tell myself over and over again, is to never regret and to look only forward.

How do you unwind?
Take a hot shower, drink a cup of tea and read a book (I alternate between fiction and non-fiction) or watch videos (I also alternate between entertaining and educating videos). On some days, you can find me winding down over a nice dinner with friends or family.

Favourite Asian destination for relaxation? Why?
Bali, Jogjakarta and Manado. All cities are in Indonesia.
Bali for its beaches, sunshine and the feeling of being surrounded by carefree people. Jogjakarta for its Javanese cultural and heritage. Manado because it’s where my dad was born and where my grandparents live. In my opinion, each city has something different to offer that contributes to my way of relaxing.

Everyone in business should read this book:
The Golden Passport – Duff McDonald

Shameless plug for your business:
Instagram Story and straight up telling friends, acquaintances and even strangers about how awesome the work that I do is.

How can people connect with you?
LinkedIn: https://www.linkedin.com/in/clairineruntung/
Personal email: [email protected]

Twitter handle?
@clairineruntung though I have been inactive for years. I am much more active on LinkedIn these days. Find me on IG @clairineruntung as well.

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started,
built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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Callum Connects

Rishabh Singhvi & Varun Saraf, Co-Founders of Why Q

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Surprised by the lack of delivery services available for local Singaporean hawker stall foods, Rishabh and Varun started their own delivery service.

What’s your story?
Varun and I moved to Singapore in 2008 and soon turned into foodies. After completing our studies at SMU, we worked in corporate offices in the Singapore CBD for 4 years. Here, we faced the problem of long queues and found it hard to find feasible delivery options on a day to day basis. We made it our goal to help others like us, so they don’t face the same problem of finding affordable yet tasty options to eat their daily meal. The name asks all those queuing up at food courts and hawker centres a simple question – Why Queue … when we can bring Singapore’s favorite hawker food to you?

What excites you most about your industry?
The Hawker culture is the most exciting and intriguing part of the food industry in Singapore. It is deep-rooted in the local Singapore culture. There is rich variety of cuisines available under one roof, food is delicious and very affordable. We were very surprised how this part of the food industry was completely ignored by other food deliveries.

What’s your connection to Asia?
I was born and brought up in India and have been staying in Singapore for the past 10 years.

Favourite city in Asia for business and why?
The ease of running a start-up and the professionalism makes Singapore my favourite city for business. It has the most business-friendly regulations, low start-up costs and takes only a week to register and get your business going.

What’s the best piece of advice you ever received?
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” – Jeff Bezos

Who inspires you?
Hawker Uncle and Aunties are our Hawker Heroes. Most of the stalls are family-run businesses. The dedication and hard-work that they put in is commendable. They come to the hawker centre at 3am to start preparing food for the day and leave only in the evening after cleaning and washing everything.

What have you just learnt recently that blew you away?
We are leaning so much about our hawker partners through our #HawkersOfSG series, inspired by #HumansOfNewYork. For example, one of our hawker partners was into advertising (until the 2008 recession started, after which he started one of the most popular hawker stalls in the country) while the other used to sell and ride Harley Davidson bikes (and now sells black pepper rice bowls). Their stories and how they turned into our Hawker Heroes continues to inspire us and blow us away.

If you had your time again, what would you do differently?
I think I haven’t reached that stage in life yet where I look back and want to do things differently.

How do you unwind?
Watching and playing football 🙂

Favourite Asian destination for relaxation? Why?
Bali, definitely. One of the most beautiful and chill places.

Everyone in business should read this book:
Zero to One by Peter Thiel

Shameless plug for your business:
Cheapest and largest Hawker Food delivery in Singapore.

How can people connect with you?
On whatsapp at 90268776 or email at [email protected]

Twitter handle?
We’re on Instagram – https://www.instagram.com/whyqsg/ and Facebook – https://www.facebook.com/whyqsg/

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started,
built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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