Business Flashcards
MVP
A product with just enough features to gather validated learning about the product and its continued development.
Product/Market Fit
The degree to which a product satisfies a strong market demand
Pivot
Structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth
Reversible and Irreversible
For reversible decisions: “If the decision was a bad call you can unwind it in a reasonable period of time. An irreversible decision is firing an employee, launching your product, a five-year lease for an expensive new building, etc. These are usually difficult or impossible to reverse.
Capital Allocation
Five capital allocation choices CEOs have:
1) invest in existing operations; 2) acquire other businesses; 3) issue dividends; 4) pay down debt; 5) repurchase stock.
Along with this, they have three means of generating capital: 1) internal/operational cash flow; 2) debt issuance; 3) equity issuance.
Open Platform vs Closed Platform
A closed platform, walled garden or closed ecosystem is a software system where the carrier or service provider has control over applications, content, and media, and restricts convenient access to non-approved applications or content. This is in contrast to an open platform, where consumers generally have unrestricted access to applications, content, and much more.
Freemium
A pricing strategy by which a product or service (typically a digital offering or application such as software, media, games or web services) is provided free of charge, but money (premium) is charged for proprietary features, functionality, or virtual goods.
Luck Surface Area
When you do something you’re excited about you will naturally pull others into your orbit. And the more people with whom you share your passion, the more who will be pulled into your orbit.
Winner Take All market
A market that tends towards one dominant player.
Two-sided Market
Economic platforms having two distinct user groups that provide each other with network benefits.
Barriers to Entry
A cost that must be incurred by a new entrant into a market that incumbents don’t or haven’t had to incur.
Price Elasticity
The measurement of how responsive an economic variable is to a change in another. ‘If I lower the price of a product, how much more will sell?’
Market Cost
The ability of a firm to profitably raise the market price of a good or service over marginal cost.
Creative Destruction
Process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one
Software is Eating the World
In many industries, new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity.
