Startup Basics
What is an MVP?
A simple version of a product used to see if customers want it.
What does it mean to bootstrap a startup?
Using your own money to start and grow the business.
This three-letter acronym measures the cost of convincing one new customer to buy your product or service, including relevant sales and marketing costs.
What is CAC
This is the specific group of people a startup hopes to sell its product or service to.
What is a target market?
What are four behaviors innovative entrepreneurs use to help generate new business ideas?
Questioning, observing, experimenting, and idea networking
What should a business find before creating a solution?
A problem that customers need solved.
What is venture capital?
Money that investors give to a startup in exchange for part of the company.
This metric estimates the total gross-profit value a customer generates over the entire period they remain a customer.
What is LTV
This describes what makes a startup’s product different or better than competing products.
What is a competitive advantage
Why is experimentation important when entrepreneurs are developing a new idea?
It allows entrepreneurs to test ideas, learn what works, and improve them before fully launching.
What does market research help a business learn?
Information about customers, competitors, prices, and demand.
Why can bootstrapping help a startup?
It allows the founders to keep more control of the business.
A commonly cited benchmark in SaaS investing says this ratio should be at least 3-to-1 for a healthy growth-stage business: lifetime value divided by customer acquisition cost.
What is the LTV:CAC ratio
$300: Entrepreneurs use this document to explain how their company will make money and deliver value to customers
What is a business model?
How can having limitations actually help an entrepreneur become more creative?
Constraints can push entrepreneurs to think differently and find creative solutions instead of relying on familiar approaches.
What is a target customer?
The people a business wants to sell to.
What is startup capital?
Money used to start a new business.
If a startup has $600,000 in cash and a $100,000 monthly net burn, this metric is six months.
What is runway
This research method involves collecting information about customers, competitors, and market trends before launching a business.
What is market research?
What is one important rule entrepreneurs should follow when brainstorming new ideas?
Defer judgment don’t criticize ideas while they are first being generated
What is a value proposition?
A statement that explains why customers should choose a product.
What is a startup's burn rate?
How quickly a startup is spending its money.
In lean-startup research, teams formulate hypotheses, probe them with evidence, and then move toward this outcome for the business idea.
What is convergence
When entrepreneurs change their business strategy because customer feedback or data shows the original idea is not working, they make this move.
What is a pivot?
How can market research help an entrepreneur improve a creative business idea?
It helps them understand what customers actually want and whether there is demand for the idea.