The research and customer development stage is where startups begin to learn about their intended customers. Successful startups then begin to devise new approaches and tweak their products in order to match their intended customers' needs.

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Research and Customer Development

A/B Test - Categorizing users into different groups and seeing how each group’s experience differs. (see more)

AARRR - Startup success model that fuses acquisition, activation, retention, referrals, and revenue as data points. (see more)

Above Ground Risk - The risk of political, social, or cultural factors influencing business.

Above Market Cost - How much more expensive a product is versus alternatives.

Absolute Advantage - Producing a good with less input.

Academics - Credentialed professionals who provide research.

Acquiescence Bias - Bias for people to agree with a statement when in doubt.

Acquired Knowledge - Information outside of a company that can be purchased or hired.

Actionable Metric - Data that links actions to results, allowing companies to act upon that data. (Check out this guide on running companies based on metrics to find out more)

Ad Hoc - A project or initiative created for the purpose of solving a specific problem.

Addressable Market - The total possible market of a product.

Analysis Paralysis - The state of having too much data to make a decision.

Analytics - A broad word used to describe all of the tools used to track user behavior. (Check out this guide on running companies based on metrics to find out more)

Anthropomorphization - A research tactic where users are asked to describe a product or brand in terms of human personality traits.

Association Technique - A research tactic where users are asked which words come to mind when they think of a certain product.

Average Order Volume (AOV) - Measures the size of each product order.

Business to Business (B2B) - A company that provides services for other companies.

Business to Consumer (B2C) - A company that provides services for individuals.

Back Checking - Calling a previously interviewed customer and asking about their experience in that interview.

Back of the Napkin Model - A brief business model designed to fit on the back of a napkin.

Bayesian Statistic - Probability calculated by a combination of prior knowledge and accumulated experience. (see more)

Big Beast - Someone who is incredibly knowledgeable and considered an expert in their field.

Blue Chip - Large, established, successful company occupying a space.

Break-Even Point - The amount of revenue that will cover all of a company’s operating costs. (see more)

Build-Measure-Learn - The feedback loop used to continually research and improve a product. (see more)

Business Model Canvas - A map that allows companies design, develop, pivot, and plan its course. (see more)

Business Plan - A document describing how a company will reach its goals. 

Call-to-Action - Text or image that urges users to do something, whether it be attending an event or signing up for a beta. (see more)

Churn Rate - Percentage of customers who stop subscribing to a service. (see more)

Customer Retention - Practices a company engages in to retain customers. 

Cohort - A customer group created due to a unifying trend or factor making that group unique.

Cohort Analysis - Attempting to identify trends by breaking up users into different experimental groups. (see more)

Conversion Rate Optimization (CRO) - Changing a landing page or website to drive traffic and make users inclined to stay.

Cost Structure - An analysis of the costs of business expenses versus the necessity of these expenses.

Cross-Elasticity - Consumer behavior that proves which products are substitutes for each other.

Customer Archetype - A “typical customer” for a company to establish its intended audience. (see Customer Definition: Customers are People Too to learn more)

Customer Life Cycle - The steps a customer goes through when using a product.

Customer Segments - A breakdown of a product’s value for various sets of customers.

Data Mining - Querying large sets of data for precise analysis.

Design Thinking - Creative problem-solving by immersion in customer experience and analyzing their interactions with a product. (see more)

Elastic - When a small change in price leads to a large change in demand.

Failing Forward - Learning from failures and using them to build a more successful product.

Go-to-Market Strategy - A company’s plan to gain market share. (see more)

Herd Mentality - The phenomenon of individuals following a leader rather than thinking independently. (see more)

Indication of Interest (IoI) - A potential customer displaying interest in a product.

Inelastic - When a change in price does not lead to a large change in demand.

Key Performance Indicators (KPI) - The metrics a company tracks to measure progress or success.

Leaky Bucket - An analogy used to explain how products lose customers.

Mentors - Industry experts who provide valuable advice.

Net Promoter - Customers who are likely to recommend a product to others.

Network Effect - The power of a user to positively impact a product via contribution

The One Metric That Matters (OMTM) - A focused, single-metric approach to measure success.

Pilot Operation - A small-scale test to gauge the potential for a complete product.

Product/Market Fit - The extent to which a product satisfies a market demand.

Prototype - Early stage product that tests if a concept is scalable.

Purchase Funnel - A model for the steps an individual goes through before decided to use a product and become a customer. (see more)

Purchase Pretzel - Similar to the Purchase Funnel, but this model takes the inherent complexity of customer decision-making into account. (see more)

Response Bias - A set of biases that can undermine self-reported and survey data.

Scaleable - A company that can maintain or improve profit margins while sales volume increases.

Serviceable Available Market (SAM) - Possible market targeted by a product within geographic or logistical reach. (see more)

Stealth Mode - A startup in a phase of secrecy. (see more)

Stickiness - User retention rate.

Synthesis - Combining different elements to make a united whole.

Total Available Market (TAM) - All existing market demand for a product. (see more)

Traction - Proof that people are buying and using a product.

Unique Value Proposition (UVP) - A clear statement that describes the benefit of a product and how a product solves customer needs.

Value Proposition - Quantifiable benefits of a product.

Vanity Metrics - Metrics that bolster a company’s self-confidence with few actionable implications. (See If You Don't Run Your Company Based on Metrics, Here's How You Can to find out more)

Vaporware - A product that is advertized as being sold while still in prototype or pre-prototype phase. This tactic is often used to gauge interest in a hypothetical product.

Waste - Human activity that brings no value.

Wicked Problem - A problem that is difficult to solve because of constantly changing criterion or problem sources.

Yak Shaving - A seemingly pointless task that must be completed in order to progress.

 

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