Connect with us


Understanding Cryptic Startup Terms



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.


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.


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.


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.


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.


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.


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.


About the Author

This article was written by Jordan Bowman. 


Women on Top in Tech – Vidya Vellala, Founder and CEO of Faasthelp



(Women on Top in Tech is a series about Women Founders, CEOs, and Leaders in technology. It aims to amplify and bring to the fore diversity in leadership in technology.)

Vidya Vellala is the Founder and CEO of Faasthelp, a 24/7 (round the clock) customer support on any business application through Artificial intelligence powered products. It analyzes what the customer is asking using natural language processing, machine learning and processes that to give the accurate responses to the customers instantly. Vidya is an Entrepreneur with a passion for innovation and latest technologies, having 17 years of Technology Experience. She won the India’s Best Startup CTO by Dell EMC.

What makes you do what you do?
I believe technology can solve any problem. Innovations in technology can improve the quality of life and the quality of work people does.
I am grown with a mindset which says self-sympathy is the enemy of self and hard work consistently without expecting a result will open bigger pathways. What I am doing is the combination of all.
Being an entrepreneur is an eternal learning which I love and I enjoy playing with technology and challenges that is the reason why I am doing what I am doing today.

How did you rise in the industry you are in?
Updating myself with the latest technologies is a must. Having said that, that alone is not sufficient. Always thinking positively, fighting against the fears, perseverance, and working hard helps.
I am lucky to have a big support from my family. My sisters who are also into technology field, make my life more beautiful and meaningful, to share not only the personal but also technical matters with them.

Why did you take on this role/start this startup especially since this is perhaps a stretch or challenge for you (or viewed as one since you are not the usual leadership demographics)?
With the bigger goal of supporting the future generations, this is the beginning. It had to start somewhere. In the very long journey this is the first step that I took.
My current startup is Faasthelp. We build artificial intelligence products.

Do you have a mentor that you look up to in your industries or did you look for one or how did that work?How did you make a match if you did, and how did you end up being mentored by him?
There have been many mentors at all stages of my startup. A startup eco system has brought me too many friends and mentors who have been very helpful at every stage of my startup and I am thankful to all of them.
My primary mentors in my life are my parents. The spirit of entrepreneurship was ignited when I was a kid and my mother was managing her small industry. The strong value system, sense of service, and responsibility towards the society is instilled in me by my dad. The strong urge to do something by myself was driven by my parents. They are the role models and driving factors.

Now as a leader how do you spot, develop, keep, grow and support your talent?
I take personal interest in grooming and nurturing talent. I have established processes that identify the potential talent and to groom. I play to the best of their strengths and encourage them to take risks. My business needs also drive me to develop new skills and grow them. I value emotional intelligence and so is the strength of my team.

Do you consciously or subconsciously support diversity and why?
I consciously and subconsciously support diversity, this again I can say got from my parents, my dad always wanted all women to be empowered and my mother had more women in her work force.
I have mentored women entrepreneurs, especially in their technical initiatives as I come with a vast technical expertise. I have extended my entrepreneurial connections to other women entrepreneurs. Our organization has more women representation.

What is your take on what it takes to be a great leader in your industry and as a general rule of thumb?
To be a great leader, you have to be a good leader, for that you must be a good human being, driven by high values, honesty, and ethics with great empathy for the people around.
Motivating the team, being a good listener with persistent hard work is a general thumb rule. Now there might be several ways to implement these and depending on the industry the implementation might differ but the ground principles remain same.
Entrepreneurship is continuous learning and I encourage others to do the same. Aim high and work towards the set goals is a way to go. I believe mindset to do service is also a way to become a good leader.

Advice for others?
Always be positive and create a positive impact on everyone. Have your values defined and do not compromise on them at any cost. Each small step taken towards the big thing is important, value them and go ahead, you will succeed surely. Success is something which we define our self and it can be achieved from any field and anywhere, on the way keep helping others.
The present focus is to develop the startup which I have taken up and my next idea is to continue to innovate and create technology products which will improvise human life.

If you’d like to get in touch with Vidya Vellala, please feel free to reach out to her on LinkedIn:

To learn more about Faasthelp, please click here.

Continue Reading


Lessons Learnt from The Lean Startup



The Lean Startup book authored by Eric Ries has been sitting on my shelf for quite sometime now, so since I am currently contributing to the making of a startup I figured I’ll take a look into it.

The book is divided into 3 parts, after reading the first two I had my mind blown with the pragmatic and scientific approach to building startups that is described in the book.

In this post, I would like to share some important insights that I gained regarding building highly innovative businesses.

Validating Value Proposition And Growth Strategy Is The Priority

Usually, a highly innovative startup company is working in its most early stage at building a product or a service that will create a new market.

Consumers or businesses have not been yet exposed to something similar to what is going to be built by the startup. Therefore the absolute priority for startups in early stage is to validated their value proposition i.e. to get real data about eventual customers interest regarding their product/service.

The other priority is to validate that the growth strategy that is going to be executed is, in fact, effective.

The growth strategy of a startup is its plan to acquire more and more customers in the long term and in a sustainable fashion.

Three kinds of growth strategies are described in the book:

  • paid growth in which you rely on the fact that the customers are going to be charged for the product or service, the cash earned from early users is reinvested in acquiring new users via advertising for example
  • viral growth in which you rely on the fact that customers are going to bring customers as a side effect of using the product/service
  • sticky growth in which you rely on the fact that the customers are going to use the service in some regular fashion, paying for the service each time (via subscription for example).

These growth strategies are sustainable in the sense that they do not require continuous large capital investments or publicity stunts.

It is important to know as soon as possible which strategy or combination of strategies is the most effective at driving growth.

Applying The Scientific Method

The scientific method is a set of techniques that helps us figure out correct stuff. After making some observations regarding a phenomenon, you formulate a hypothesis about that phenomenon.

The hypothesis is an assumption that needs to be proven correct or incorrect. You then design experimentations that are going to challenge the assumption.

The results of the experimentations makes the correctness or incorrectness of the hypothesisclear allowing us to make judgments about its validity.

In the lean startup methodology, your job as an entrepreneur is to formulate two hypothesis:

  • hypothesis of value (assumptions about your value proposition)
  • hypothesis of growth (assumptions about the effectiveness of the growth strategy)

These hypothesis are then validated/invalidated through experimentation. Following the precepts of lean manufacturing, the lean startup methodology prescribes to make experimentations while minimizing/eliminating waste.

In other words, you have to burn minimum cash, effort and time when running experiments.

An experimentation in the lean startup sense is usually an actual product/service and helps startups in early stage learn invaluable things about their eventual future market.

Sometimes startups learn that nobody wants their product/service, imagine spending 8 months worth of engineering, design and promotion work (not to mention cash) in a product/service only to discover that it does not provide value to anyone.

Minimum Viable Products And Feedback

As we pointed out earlier, an experimentation can be an actual product or service and is called the minimum viable product(MVP).

The MVP is built to contain just enough features to validate the value and growth hypotheses, effectively requiring minimum time, effort and cash.

By getting the MVP launched and in front of real users, entrepreneurs can get concrete feedback from them either directly by asking them (in focus groups for example) or via usage analytics.

Analytics scales better then directly talking to customers but the latter is nonetheless used to cross validate results from the former.

It is crucial to focus on metrics that creates fine grained visibility about the performance of the business when building(or using) a usage analytics system. These metrics are called actionable metrics because they can link causes and effects clearly allowing entrepreneurs to understand the consequences of ideally each action executed. Cohort analysis is an example of a analytics strategy that focuses on actionable metrics.

The bad kind of metrics are called vanity metrics, these tend to hide how the business is performing, gross numbers like total users count are an example of vanity metrics.

The author cites several examples of different startups that managed to validate or debunk their early assumption by building stripped down and non scalable MVPs and even sometimes by not building software at all.

You would be surprised to hear for example how the Dropbox folks in their early stage managed to created a ~4 minute video demonstrating their product while it was still in development. The video allowed them to get more people signed up in their beta waiting list and raise capital more easily.

Closing Thoughts

In the first two parts of the book, the author talks also about how employees inside big companies working on highly innovative products and services can benefit greatly from the lean startup approach, although very interesting this is not very useful for me right now.

The third part, talks about the challenges that arises when the startup gets big and starts to stabilize and how to address them. Basically it revolves around not loosing the innovative spirit of the early days, again, this is not very useful for me so maybe for good future reading.


About the Author

This article was produced by Tech Dominator. see more.

Continue Reading