This is what we mean when we use these words:
Technology: IT, SaaS, Web, Mobile, Hardware – applied in areas of: Healthtech, Fintech, Security, Enterprise, Consumer, Civic, SportsTech, IoT/M2M, Edutech, etc.
Entrepreneur: A person who identifies an economic problem, forms a for profit business to solve the problem using their resources, and gets paid back relative to the associated risk and value delivered to the customer.
Startup: newly established business set in motion
Investor: A person that puts money into the entrepreneur’s business with the expectation of achieving a profit.
General tech startup metrics and meanings:
Monthly Recurring Revenue (MRR): Monthly total of paid customer fees
Annual Recurring Revenue (ARR): Recurring revenue on an annual basis
Average revenue per account: MRR/total # of customers
Gross Profit: Total revenue minus the cost of goods sold
Annual Contract value: Value of a contract over one year
Total Contract value: Value of one-time and recurring charges
Lifetime Value: Prediction of net profit from the entire future relationship with a customer
Deferred revenue: Amount that was received by a company in advance of earning it.
Billings: current quarter revenue + deferred revenue from previous quarter.
Customer Acquisition Cost (CAC): Full cost of acquiring one customer.
Customer concentration risk: Revenue from largest customer/total revenue
Daily Active Users: Users other than one-time users per day
Monthly active users: users other than one time users per month
Activation rate: number of users taking a specific action to get value out of a product.
Month over month growth: Average of monthly growth rate from previous month.
Compounded Monthly Growth rate:
(latest month/first month)
(1/# of months) -1
Monthly churn: Lost customers this month/prior month total
Retention by cohort: % of original installed base (first month) that are still transacting
Gross Churn rate: MRR lost in a given month/MRR at the beginning of the month.
Net Churn: MRR lost – MRR from upsets) this month / MRR at the beginning of the month
Monthly Cash Burn Rate – how much spent on all operations per month
Net Burn Rate: Revenues – gross burn
Gross burn: Monthly expenses + any other cash outlays
Total Addressable Market: Revenue Opportunity available for a product
Annual Run Rate: Projection of current MRR into the future, annualized.
Gross Margin: Difference between revenue and cost of goods sold
Sell-through rate: number of units sold in a period/number of items at the beginning of period
Network effects: effect of one user on the value of that product to other people
Viral Coefficient: average number of invitations sent existing use
Net Promoter Score: How likely a user is to recommend your product to a friend
Platform Risk: dependence on specific platform or channel