Startup terminology every entrepreneur should know.
Valuation: The amount of money a company is worth.
Example: Airbnb has a valuation of $30 billion, meaning they are worth $30 billion.
Burn Rate: The speed at which a company is blowing through its cash.
Example: “We’re burning through $25,000 a month.”
Churn Rate: The percentage of customers or subscribers lost over a period of time.
Example: “We need to decrease our churn rate in order to see growth next month.”
Conversion Rate: The percentage of visitors who take a desired action.
Example: If Salesforce has 100 customers in the free plan and 30 of them become paid users, then Salesforce’s conversion rate is 30%.
Growth-hacking: getting many users/customers to determine the best, most efficient and cost-effective way to grow a business.
Example: When Twitter realized that users following over 30 people were more likely to become active users, they adjusted the app to bring up “suggested people to follow” after a user signed up.
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