Startup Terminology That You Should Know but Mostly Avoid Using

This is an intentionally non-exhaustive list of startup vocabulary words.

I’m not going to research the meaning behind the words for the list, because I want this to be a realistic example of what 2 years’ consumption of every sort of startup and tech media do to one’s brain. These are just the thoughts of one bee, separating himself from the hive-mind long enough to regurgitate some information.

Use these terms with extreme caution, because if you say them more than absolutely necessary I will smugly consider myself to be better than you, and I’m sure there are more like me out there.

I’m not going to sort them; but instead am writing in the order I think of them. Here goes:

YC: Y-combinator; the most storied startup accelerator (although I think they call themselves a venture fund now). YC competes with others like TechStars & 500startups but is the most prestigious. Spawned companies such as Dropbox, AirBnB, Reddit and founded and until recently led by…

Paul Graham

Paul Graham: The guy who wrote the essay after which this blog is named. He was a computer scientist and founded a company which sold to Yahoo. He then became something of a startup guru, writing a collection of essays which many view as gospel. He also started the popular web forum….

Hacker News! This is where programmers gather online to share interesting news about technology, startups, and the world; as well as to be cynical about things and parade their intelligence. Its U/I is similar to Reddit’s.

Sam Altman: The new leader of YC, who went through the program and became a partner. He taught a class at Stanford and I can only imagine had to change his home address and phone number to keep rabid sophomore comp sci students from hounding him day and night asking him to look over their pitch decks.

Silicon Valley (Place): The peninsula below San Francisco where tons of major tech companies are headquartered. Centers around Palo Alto (home of Stanford), where you can get an ice cream sandwich at a microcreamery for $8.

Peter Gregory
R.I.P. Peter Gregory

Silicon Valley (TV Show): This HBO show satirizes tech and startup culture and is, in my opinion, hilarious. Most people in the Valley seem to like it, and enjoy debating who the real life counterparts are to each character.

Lean Startup: A movement started by Eric Ries’ book of the same name. This ideology takes inspiration from the lean manufacturing movement, which was popularized by Toyota. In the Lean Startup ideology, companies should attempt to learn as much as they possibly can as quickly as possible, usually by launching a very early prototype out into the world and listening to customer feedback. This early prototype is called an…

MVP! Which stands for “Most Valuable Player.” Just kidding, it stands for, of course, “Minimum Viable Product.” It is the bare bones version of your product, designed simply to answer the question, “is this something people actually want?” A surprising amount of the time, the answer is, “No, now stop asking me for my email address.”

So what do you do when you get customer feedback to change your product? Well, you ITERATE, of course! I actually used to like the word “iterate,” back when I had only heard it in the intro to computer science class I took in college. It means to loop through a process, and startup employees (especially CEOs talking to investors) love to use it to refer to the product development cycle.

“Well we had a solid run in beta, got some valuable feedback from users and iterated, and then we launched and got some great press and have just been listening to users and iterating and focusing on the user and then doing some iteration, and now we’ve iterated our way to 4,000 monthly active users and I think we’re ready for our $800k seed round now!

Which leads us to FUNding rounds…

Friends and Family round: This is where you have an idea and you want to quit your job and work on it full time and need $5k-$40k or so to stay afloat. Of course, if you are particularly well-connected or wealthy, a “friends and family” round can be closer to the GDP of a small island nation, but hey, #startuplife, right?

Angel Round: This is where you meet with wealthy individuals who are interested in investing in very early-stage companies. Often times these will be entrepreneurs who successfully exited a company and now have a few million dollars to their name, but as angel investing has increased in popularity (read: more people watch Shark Tank), you’ll find wealthy people of all sorts who want to be able to tell their friends that they’re angel investors. These rounds usually go for around $10k – $150k.

Seed Round: This is where “institutional capital” starts coming into play, i.e. you’re raising from real VC firms. A seed round was originally a very early stage and smaller investment round, but as the popularity of angel rounds has grown, and there’s something called “pre-seed” rounds now (idk), the check sizes in seed rounds have gone up, sometimes up to $500k or $1mm from each investor.

Series A: This is where a company is starting to figure out how to give customers what they want. At this point, they should be adding fuel to the fire in order to scale. Series A rounds are usually $2mm-$8mm or so, though the trend is that they’re getting bigger.

Following Series A is, predictably, Series B, which is a bigger round yet. Then comes the C round, and it can continue on through the alphabet though oftentimes companies go public after the Series C.

IPO: An initial public offering; this is where a company first sells shares of stock to the public. They’ll be listed on a stock exchange and be subject to rules and regulations regarding their financials and how they report them. IPOs are where investors and founders/early employees can become very, very wealthy by selling some of their shares. The only tech companies to have ever IPO’d are Facebook and Google, and maybe Microsoft if they still called it an “IPO” back then (jk).

Speaking of very, very wealthy people, Peter Thiel is an odd fellow who invested in Facebook very early on. He has since taken to funding lawsuits against Gawker, building utopian nation-states in the ocean, and trying to find ways to live forever. He has a venture fund called the Founder’s Fund. He also helped to start Paypal and Palantir. This leads us to…

The PayPal mafia: This refers to the group of founders and early employees of PayPal, who have gone on to start or run lots of the biggest companies in tech. Among this group are Reid Hoffman, who founded LinkedIn; Max Levchin, who started Affirm and is generally super smart; and of course…

Elon Musk

Elon Musk! Mr. Musk is the darling of fledgling entrepreneurs everywhere. He is often compared to Tony Stark from Iron Man; and though he is less charming he is probably smarter. His biography is very well-written and a fascinating read. He is the CEO of both Tesla Motors and SpaceX, and he has the good taste to watch Nathan for You.

Product/Market Fit: This is a term used to describe when a startup has finally figured out what its customers want and how to deliver it to them. If you are hitting Product/Market Fit, you’ll often see Hockey Stick Growth (especially if you’re a consumer startup), which is where a graph of your growth looks like the curved part of a hockey stick (also, how many tech people do you think have ever held a hockey stick? Probably fewer than have uttered the term). Often abbreviated PMF, Product/Market fit is the stage that all early startups strive to get to. Most never make it. It was originally coined by mega-VC…

Marc Andreesen! Andreesen is a guy with a very large, egg-shaped head who tweets a lot from the handle @pmarca. Oh, and he was one of the pioneers of the internet, cofounding Netscape (I believe while still an undergrad at Illinois). He became a titan of the tech industry in the ’90s and met his now-partner…

Ben Horowitz! Horowitz is fellow who likes to quote rap music and relate it to startups (who would do that, right?) He founded Opsware/ Loudcloud and made a bunch of money after taking it public. He details this in his highly acclaimed book (which I actually do love and really recommend), The Hard Thing About Hard ThingsNow he and Andreesen work together as founding partners at their venture fund,

Marc Andreesen on the left, Ben Horowitz on the right.
Marc Andreesen on the left, Ben Horowitz on the right.

Andreesen Horowitz (aka a16z). This is one of the most prestigious funds and has backed  many of Silicon Valley’s biggest stars. As someone who has no interest in raising money, I don’t really know too much about them but I would be really excited to tell all of my friends that I “had a breakfast meeting at a16z.”

Sequoia Capital: This is another extremely prestigious fund that has invested in a bunch of huge companies.

Benchmark Capital, Greylock Partners, Index Ventures, Foundry Group, Union Square Ventures: Same as above. Idk, they all have made tons of moneys and their partners get retweeted a bunch when they say anything. I have a soft spot for Foundry Group though because they are led by…

Brad Feld, who seems really cool and to me epitomizes “founder-friendly” venture funds. He’s written some great books and writes a good blog here, which I appreciate because it delves into some pretty personal stuff in addition to tech/investing. He also is a friend of the podcast…

The Twenty Minute VC with Brad Feld
Brad Feld’s episode on The Twenty Minute VC

The Twenty Minute VC, which is a go-to for many in the venture world and has had tons  of distinguished guests. I am a huge fanboy of this show and its host, Harry Stebbings. It is a great example of content marketing done right. Speaking of which…

Content Marketing is a concept that I became aware of through HubSpot, the somewhat douchey marketing automation company about which a scathing book was recently released (I read the book and didn’t like it, I wanted some shocking stuff but it was all pretty standard and boring, yeah we get it, preppy over-privileged people work at tech companies in Boston). Anyway, content marketing is the idea that you should produce a lot of content, often in the form of blog posts but also through podcasts, instagram posts, e-books and webinars etc., and this content should help solve your users’ problems. If you do this enough, the idea is that you will become an authority in your space and people will come to you to buy stuff too. I think this process does actually work, but because it’s difficult to “hack” and it takes a long time, lots of people do it wrong or don’t do it at all.

Growth hackers on LinkedIn
Ugh.

Growth-hacking: This phrase had a pretty short moment in the sun before becoming almost universally reviled, but I’ll still see it from time to time on job postings and linkedin pages. Originally, it meant someone who was a combination of technologist and marketer, who could design and implement marketing experiments and pull and analyze the data for herself. Now, it means someone who goes to a lot of startup conferences (revivals?), DMs you on LinkedIn and has no skills.

User Funnel: This is an analogy for the entire process of getting people to use your product or buy your product/service. “Top of the funnel” work refers to making people aware of your company (through PR, advertising, content marketing etc) and getting someone “through the funnel” means you move them along to become a paying customer. People like to talk about “funnel optimization” or “nurturing customers through the funnel” and this just means “making more people buy our stuff.” The best reference to the user funnel is 100 percent without question this one:

Cloud Computing (“The Cloud”): This is actually an interesting one, and from my non-technical perspective here’s what it means: it means you can use the internet to run software and store data on other people’s computers. Amazon Web Services is a very important example of this; using AWS you can rent server space and scale it up or down based on how much you need. This has drastically lowered the start-up cost for tech companies and as I understand it is a huge market force.

Product Hunt: This is a website where new tech products can be submitted and upvoted or downvoted by users. Sort of like “hot or not” for new apps. It is run by Ryan Hoover who seems like a nice dude and it is really addictive. If you don’t have people badgering you to upvote their PH launch, you need to go to more Meetups.


Alrighty, that’s all I can think of at the moment and I have to go do something that will actually give me money to buy food. Let me know what I’m missing or which things I messed up. If the tech industry keeps churning out buzzwords, I’ll add more (I think there’s a pretty good chance).

Oh, and a Unicorn is a company that has not gone public but is valued at a billion dollars or more… if you hadn’t heard that term before, I’m sincerely sorry.

2 Comment

  1. CJ says: Reply

    Ha,

    I found this article from reddit. It was a fun read!
    Great content

    Cj

    1. jhovde2121@gmail.com says: Reply

      Thanks,CJ! Appreciate it.

      Cheers,
      Joe

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