Startup Core Strengths Glossary
Hit Ctrl-F to find a term, or click a link to jump to a section: Metrics | User Psych | Process & Experimentation | General Marketing Tactics | Paid Online Ads | Website Conversion | Email Marketing | SEO and Paid Search | Inbound Lead Gen
North Star Metric: A customer behavior metric that increments when you deliver value to customers, and encompasses your whole funnel or marketplace. (e.g. DAUs, WAUs, transactions, transaction volume). This number can be maximized (e.g. an absolute increase rather than a percentage or ratio)
Key Drivers: Metrics that track the 1-3 most powerful ‘levers’ you can pull to move the North Star, (e.g. traffic, conversion rate or number of qualified leads). Usually you’ll have a team decked against each key driver. The larger you are, the more key drivers you can work on simultaneously.
Rate Limiting Step: Is there one key driver that has an outsized impact on the entire system? If so, focus there first.
Nuance Metric: Any number you need to watch but not optimise. This could be a ‘check metric’ like CPA or NPS where you just want to make sure it’s staying in the ‘good’ range, or it could be a number that explains movement in the North Star, like seasonality or affiliate traffic. It’s any important number you want to watch, but not try to move, at the moment.
Balance Metric (Marketplaces): If you have a marketplace, this number tells you if your growth is more constrained by the supply side or the demand side at any given time, so you can focus your efforts accordingly. For example, number of bids per product, number of offers per project, or percent of products or projects that get converted.
Habituation Threshold: If you have a retention-based business, what early-life pattern of behavior is highly predictive of long-term retention? (e.g. Facebook’s 7 friends in 10 days).
Aha Moment: Related to the Habituation threshold, this is the point in the customer journey where most people ‘get it’ and really understand and believe you’ll help them make progress against whatever goal or challenge brought them to you.
Churn Rate: Number of customers you lost in the previous period (e.g. month) as a percent of the total customers.
Cohorts: A group of customers who joined in the same period (e.g. week or month)
Cohort Curves: A chart that shows the activation, activity or retention rates of a series of cohorts. Normally you’d use this to see if newer cohorts are becoming more “sticky” (using the product more) than earlier ones.
Statistically Significant: In an experiment where you’re comparing two results (e.g. test vs control or A vs B), the difference is large enough that you are unlikely to have gotten this result by accident or chance. This is a mathematical function of 1. The sample size, larger is better and 2. The magnitude of the difference in results between your two variants.
Pareto Distribution: A fancy way to say “the 80/20 rule” where 80% of results come from 20% of your work. (Named for the Italian economist Vilfredo Pareto who first documented the phenomena in 1896).
Power Law Distribution: Similar to a Pareto, this is a situation where a very small number of items account for the vast majority of results. For instance, if you have 1,000 customers, but 90% of your revenue comes from your three largest customers, that’s a power law distribution. A more common distribution would be a Normal Distribution or “Bell Curve” where 80% of your results come from customers who are “average” (within +/- 1 standard deviation of the mean)
Standard Deviation is a statistical term that tells you how spread out your data is relative to the mean. If you have two people in a room and one of them is a content marketer and the other is Bill Gates, then the average net worth of the people in the room has a very high standard deviation.
WAUs: Weekly Active Users
DAUs: Daily Active Users
MAUs: Monthly Active Users
MRR: Monthly Recurring Revenue (This only applies in a business where revenue is contracted or subscription-based – revenue that is guaranteed to come in-month from retained subscription customers).
ARR: Annual Recurring Revenue (This only applies in a business where revenue is contracted or subscription-based – revenue that is guaranteed to come in-year from retained subscription customers, do not confuse this with “Annual Revenue”).
NPS: Net Promoter Score – the % of customers who are likely to recommend your product or service minus your detractors.
CPA = Cost per acquisition: How much money, on average, do you need to spend on advertising to acquire one single user? (This user could be a free user who does not pay you)
CAC = Customer Acquisition Cost: How much money, on average, do you need to spend on advertising to acquire one paying customer?
ROAS = Return on Ad Spend: A multiple that shows the total value of your converted customers divided by the total amount spent on advertising, so if you spend $1,000 to get 100 customers worth $50 each, your ROAS is 5X. Normally this excludes fixed costs like headcount, and only covers your variable expense e.g. cost per click.
ARPU = Average Revenue Per User How much money you make from each user in a given period of time, normally a year, calculated by dividing your total revenue by the total number of customers.
LTV = Lifetime Value of a Customer How much is a customer worth during their full tenure with your company. For a startup, to calculate this, you’ll need a defensible estimate for how long the average customer will stick around. I suggest using conservative numbers.
CAC:LTV The ratio of customer acquisition cost to lifetime value, shows how profitably you are acquiring customers. This is an important number for investors, because a business can only grow and succeed if it can acquire customers profitably. Your “lifetime” is the average tenure of a customer, and even if they stick around forever, it’s normally capped at 3 years. Technically the CAC should include “fixed costs” like salaries, but for startup fundraising it’s helpful to also calculate the ratio using only variable expenses (e.g. ad spend, agency fees) to indicate if your acquisition could become profitable at scale. Ideally this number should be >3.
CPC (Cost per Click) The amount you pay per click for your advertising.
Retention: What percent of users continue to use your product (e.g. do not churn) in a given period of time.
Locksmith Moment* The time and place when your prospect becomes acutely aware they need your product or service
Selective Attention – A neurological process where our brains filter out most sensory stimuli to enable us to focus on a particular item. It means we don’t actually notice a lot of things that pass through our field of view.
See / Think / Do – A digital marketing framework created by Avinash Kaushik in 2015 distinguish between three levels of intent he observed in search behavior. The “See” group included anyone who could potentially buy your product, but was not actually performing a related search, so having no intent. “Think” represented anyone who was thinking about your product, they have “informational intent.” And Do is anyone considering a purchase, that’s “commercial intent.”
Information Foraging – Information foraging theory that argues humans search for information in much the same way as animals search for food. As we take in each new bit of information, we decide if we should stay on the current site and keep looking, or back up and try a different site. We look for “information scent” – cues that help us gain confidence that we will find the information we seek.
Look like food* If we continue the metaphor that people who visit your site are looking for food, then the marketer needs to make sure they understand what this visitor’s searching for, what they consider “food,” and present that on the site.
Personas – Fictional representations of segments of prospective buyers who share similar goals, profiles and preferences.
JTBD / Jobs to be done: A framework that helps identify the unconscious motivations that makes people switch to new products by assuming we do not buy products or services, but hire them to help us make progress in a particular situation. When we understand that situation and progress, sales, marketing and product become much easier.
Functional, Social and Emotional Jobs: In Jobs To Be Done theory, the “job” is the progress a person is trying to make in a particular situation, also called the “desired outcome.” Jobs have functional, social and emotional components. Functional components are the actual task someone is trying to complete. Emotional aspects refer to how the person should feel, and social aspects include how we would like to be viewed by others. As a simple example, you can buy a Swatch for $80 but a Rolex costs $8,000. They both perform the same function, but provide different social and emotional outcomes. As you can see in this example, often the social and emotional outcomes are far more valuable to the customer. This is as true in B2B as it is in B2C.
Alternative Solutions: From Jobs To Be Done theory, this is any solution, workaround, or hack a person uses to make progress (in the consideration set). It may be a direct competitor or a workaround. For example, an iPad may be a parents’ alternative solution to a babysitter or an after school club.
Nonconsumption: In Jobs To Be Done theory, not all jobs get completed. Sometimes people just live with the discomfort of having the job not done. This is called “competing with nonconsumption,” and while it’s hard to spot, it can indicate a very large market.
The Four Forces: In Jobs To Be Done theory, there are four forces, two pushing the buyer forwards towards purchase (push and pull), and two holding them back (anxiety and intertia).
Push: In Jobs To Be Done theory, we have four forces, or psychological factors at play when people are trying to make progress in their lives. The first force, push, describes the pain that is pushing a prospect away from their current situation.
Pull: In Jobs To Be Done theory, we have four forces, or psychological factors at play when people are trying to make progress in their lives. The second force, pull, is the hope of a better future that is drawing your prospect towards a new better way of doing things.
Anxiety: In Jobs To Be Done theory, we have four forces, or psychological factors at play when people are trying to make progress in their lives. The third force, anxiety, is a list of worries people have about the "new" way of doing something. This is a list of questions and worries prospects will ask once they first learn about your solution or product category. (For example, when AirBnB first launched, people had lots of questions about renting rooms in the homes of strangers, and AirBnB worked hard to address these anxieties).
Inertia: In Jobs To Be Done theory, we have four forces, or psychological factors at play when people are trying to make progress in their lives. The fourth force is inertia, which describes any relationship, habit or allegiance that holds someone back from making a switch to a new way of doing something. For example, I might not replace my old winter coat because it was a gift from my spouse, and I don’t want them to be offended when I send it to the charity shop. (Or I might just wait till they’re out of town).
Desired Outcome: In Jobs To Be Done theory, this is the job, it’s the progress we are trying to make in a particular situation. It’s what customers want to achieve by using this product/service. When we understand that situation and progress, sales, marketing and product become much easier.
Trigger: People don’t usually buy things at random (though sometimes it seems random). The trigger is the emotional, social or physical event that causes a prospect to start looking for a new way of doing things. If you can identify these trigger situations or struggling moments, that can be extremely helpful in marketing.
Hypothesis – An assumption, belief or idea you suspect may be true, normally about a causal relationship between two events, that you plan to test experimentally.
JFDI – Just bloody do it – some ideas are so obvious, easy and low risk, it’s not necessary to design and run an experiment, you simply “JFDI.”
ELMO – Enough let’s move on, when a meeting is going in circles anyone can call this.
Experiment – A procedure that allows you to discover an unknown effect or test a hypothesis.
Control (vs Test) – In a well-designed experiment, you test at-least two conditions. One of those is the “control” condition, which represents the normal state of affairs, and is used for comparison to the test condition.
Five Second Test – A qualitative research method to help assess readability and comprehension of a web page, ad or app store listing. You show somebody a piece of content for five seconds, and then take it away and ask them what it said, and what they think it means. This can be done in-person or over Zoom with a screen share.
Paper Test – Another word for Five Second Test, a quick qualitative test to check readability and comprehension. It does not require paper, can be done on a laptop or phone screen or even on a Zoom call.
Usability Test – A qualitative research method where you watch people similar to your target customer try to complete a task on app or website. It helps you evaluate and improve its usability.
OKRs – Objectives and Key Results, a collaborative goal setting methodology developed at Google and popular with many teams.
Local Maximum – A term borrowed from mathematics that refers to a maximum within a restricted domain. Basically it means you’ve been testing the same area for a long time and are only getting incremental improvements, and it’s time to zoom out and think big picture again.
Sprint – A short time-boxed period in which to complete a task, in this case normally a set of marketing tasks and experiments.
Backlog – A list of all of your growth experiment ideas, including short descriptions, the name of the person who came up with the idea, and rough estimated scores (SWAGs) for effort and potential impact.
Pipeline – Your Kanban or Trello board where you track experiments that are either in-process, up next or recently completed and being documented.
Growth Meeting – A weekly (or every two week) meeting of a growth team where you review the numbers and discuss the most important work being done. It’s a great place to share and discuss experiment results and select the next tests to run. The goals of the growth meeting are to enforce the pace and spread learning.
SWAG – Silly wild-arsed guess, a rough estimate.
MVT (Minimum Viable Test) – If an idea is too big or expensive to implement quickly, because it requires a lot of time, money or engineering work, you can run an MVT. Review the idea and list out the riskiest assumptions that could keep it from being successful, and design fast simple tests that can be run in a week or two to challenge only those assumptions, to decide if it’s worth moving forward with the larger project.
Pre-Mortem: This is a method to identify your riskiest assumptions. Come up with a few reasons why a project/campaign/etc. will fail. Those are your riskiest assumptions.
Risky assumption /LOFA: Risky Assumption or “leap of faith assumption” are the assumptions you make about a customer (need/pain) that would have to be true in order for your product/service/campaign to succeed
Marketing Tactics (General)
Channels: Channels are routes between a company and potential customers, such as paid Google ads, paid Facebook ads, placement on supermarket shelves, search engine optimisation, referral programmes, affiliate marketing and app store listings.
Lanes: Lanes are clusters of channels that work well together, because they require similar skills and resources to execute well. There are probably about six lanes: Paid online marketing, virality, content marketing, partnerships, sales and influencers.
Performance Marketing: The British term for Online Marketing
Digital Marketing: An American term for online marketing
Online Marketing: Marketing stuff online
Outbound Marketing: There are two types of lead generation, outbound and inbound. Outbound is where you reach out and attempt to contact potential customers, and it includes things like trade shows, seminar series, and cold calling. At early stage it can be helpful because it puts you in front of prospective customers every day, but as you grow, it can get expensive, cumbersome, and hard to scale. It tends to work best for expensive B2B software with very small niche markets.
Inbound Marketing: There are two types of lead generation, outbound and inbound. Inbound is where leads find you and self-identify when they may become a good prospect. With inbound marketing you create and distribute free content that would be valuable to your ideal customer early in their journey. Distribution channels could include search engine optimisation, social media, even podcasts.
Impulse Buy: An inexpensive low-risk product with a quick purchase decision.
Considered Purchase: A product that buyers consider carefully, normally over a long
time period, because it’s expensive, risky or hard to adopt. Applies to B2C and B2B.
Enterprise: Expensive products sold to very large companies, normally with an active sales process.
Self-Serve: Products that can be bought and sold without the assistance of a salesperson.
Network Effects Growth (AKA Viral): A virtuous cycle where your customers invite friends or co-workers to the service because makes it more valuable for the person doing the inviting.
Referral: A customer referred to you by another customer or partner.
Freemium: A pricing strategy where you offer some limited functionality for free forever, and charge users who wish to access additional features.
Free Trial: A pricing strategy where you allow people to use your full product with no feature limits for free for a specified period of time.
Paid / Performance
Retargeting: Showing ads to people who have visited your site, or a particular page on your site recently, typically in the past 30 days, and you can identify them with a cookie.
Cookie: Whenever you visit a site, it leaves a small piece of code on your browser that contains information about your visit, such as when you visited and which pages.
Lookalike Audience: Major ad platforms (e.g. Google, Facebook, Pinterest, Snapchat) can target ads to an audience who resembles your best customers based on a computer model, if you upload them a list of your best customers.
Creative Fatigue: People get tired of seeing the same ad again and again (a creative is a single ad, you may have multiple creatives in a campaign), though it takes longer than you’d expect. When click rates start to drop off (or ideally before that happens), you need to come up with a new ad or show the old ad to a different set of people.
Native ads: Native ads appear at the end of articles you read online, and they are designed to look like content from that publication.
Reach: The total number of people who see your ads in a particular campaign, the size of the audience.
Frequency: The number of times each person sees an ad, when this number gets too high, you risk creative fatigue.
Events: Events are actions people have taken on your site or in your app or with your ad (e.g. visited page X, watched at-least 15 seconds of a video). Advertising platforms let you use events for targeting (e.g. show this ad to anyone who visited page X), as well as tracking (e.g. an event can be a goal, like “downloaded our whitepaper.”)
App events: Actions people take while using your app.
Pixel: A piece of code served by an ad platform (e.g. Facebook) to visitors of your website. This pixel identifies the user to Facebook and tracks their behavior across your site.
Optimisation event: When you run paid ads, you need to set the campaign to optimise for a certain goal or outcome, such as buying a product or downloading a white paper. Normally optimising for an event too high in the funnel, e.g. clicks, will bring low-quality traffic. But optimising for an event too low in the funnel (E.g. completed purchase) risks not having enough data.
Event properties: Events are actions people take that we track, and properties are additional information associated with the event, such as the person’s location, device, which page they viewed, how many seconds of a video they watched, which email they opened or the value of items in their shopping cart.
Campaign Objective: The goal of your campaign, as defined in the optimisation event. Typically this will be one of: Reach (just show your ad to as many people as possible for brand awareness), engagement (e.g. visitors, video views) or conversion (e.g. become a lead, buy a product). Ad platforms will optimise your campaign to deliver that objective.
Analytics: Data about your prospects and users behavior.
On-Site / Conversion
Tripwire Offer – An extremely inexpensive first purchase (e.g. get your first month for only $1) to more easily convert prospects into customers, so you can upsell them later.
Social Proof – A fancy psychologist way of saying that other people are saying nice things about you, such as five-star reviews or customer testimonials.
Proposition (AKA Value Prop) – A clear succinct articulation of your promise to deliver value to your customers.
Welcome sequence – An automated series of emails sent to new subscribers to an email list to reinforce the sagacity of their decision to subscribe and get them in the habit of reading and opening your emails.
Nurture sequence (or Lead Nurture sequence) – An automated series of emails you’d send to a new prospect after they register for your lead magnet. The aim is to educate them or reframe the problem to move them to a sales qualified state. These emails help explain what your product can do for them, address common objections and anxieties, and create urgency to push them towards purchase.
Scraper – A scraper is a software tool that scans web pages and extracts data, they are often used to compile email lists of prospects for sales teams to torment.
Cleanse – Before you send a mass email to a list, it’s essential to remove any inactive email addresses and validate that most of the emails will be deliverable to the intended recipient. There are many software tools to help you do this, and if you don’t, you’ll end up on a Spam blacklist faster than you can say DKIM.
SEO & Paid Search
Programmatic SEO: Programmatic SEO is the automatic creation of thousands of pages at scale using code.
Pillar Content: Pillar content is focused around a broad keyword with a high search volume.
Topic Clusters: Topic clusters are content pieces that live on your website and are linked to a common, overarching subject (known as pillar content).
Search intent: Most searchers’ intent, or goal, falls into 4 categories:
1) Navigational: Trying to find a certain thing with which they are already familiar, e.g. “Amazon Davinici code.”
2) Informational: Searchers want to find information or the answer to a question, e.g. “Who was Virgil Abloh?”
3) Transactional: People who are ready to take action (e.g. buy something, download something, learn a particular task)
4) Commercial: A transactional or navigational search about a particular brand of product or service.
Domain Authority: Among other factors, Google’s search rank algorithm prefers web domains that receive more backlinks from other high quality domains, so your domain authority is the number and quality of other domains that link back to your website, and helps you rank higher for terms. Google does not publish this information, but SEO software tools will estimate your domain authority.
Backlinks: The number of website links back to your site, information used by Google to help rank search results.
Organic: Non-paid search results or clicks, when you rank on Google for a term.
Volume: The number of searches per month for a particular term is its search volume.
Trademark Search: People searching for a trademarked term such as a brand name. Normally (hopefully) some of your search traffic will come from people looking for your specific brand name, and this is usually high-intent traffic, but should not be attributed as SEO since your SEO efforts did not cause these prospects to want to seek you out.
Tail Keywords: (or tail terms or long-tail terms) More specific search terms that have less volume and are easier to rank for. (e.g. epson workforce wf2530 replacement cyan toner cartridge).
Head Keywords: (Or “head terms”) When doing SEO or buying AdWords, these are highly competitive terms with a lot of search volume and high searcher intent, such as high intent terms or category terms. (e.g. printer cartridge, buy printer cartridge)
Crawler: A piece of software that reads web pages. In SEO, search engines use crawlers and periodically “crawl” and index your site, updating their internal database of what content is on your site as well as the number and quality of backlinks to each page.
Inbound Lead Generation & Qualification
Landing Page: A sales web page where you’d send traffic from a campaign to convert them to customers, not necessarily your home page.
Lead scoring: The act of assigning points to a lead based on explicit information collected (company name, title), and implicit behavior (content downloaded, pages viewed). The goal is to identify the warmest most engaged leads for your sales team to spend time with.
Lead Magnet: A lead magnet is a piece of content or service that is given away for the purpose of gathering contact details. This should be something your ideal prospect would find extremely valuable, and may include an e-book, online workshop, audit, calculator or quiz.
MQL (Marketing Qualified Lead): A B2B inbound lead who appears to be qualified based on a mix of information you’ve captured (e.g. number of employees) and their tracked behavior (e.g. multiple visits to your pricing page, opening your nurture emails) normally gets passed to a sales rep. (See Lead Scoring)
SQL (Sales Qualified Lead): A B2B lead who is established as qualified based on their answers to a sales rep’s questions around budget, authority, need, timing (BANT).
Lead Qualification: The process of gathering more information about a B2B prospect to establish whether it’s worthwhile for a sales rep to speak to them, normally by establishing BANT.
BANT: The four criteria traditionally used by a B2B sales rep to establish if a lead is qualified (SQL) – budget, authority, need, timing.
Sales Cycle: The psychological journey/phases a prospect passes through when making a considered purchase (Awareness, research, comparison, purchase)
Content types: utilised at each stage of your funnel to attract, convert and sell to prospects:
· TOFU: Top of funnel content should appeal to cold prospects, and includes blogs, videos, guides
· MOFU: Middle of the funnel content should help qualified prospects learn more about your solution, and include case studies, testimonials, white papers and webinars.
· BOFU: Bottom of the funnel content is for high-intent prospects, and includes buyers guides, demos, free trials and pricing calculators.