Glossary

5-second test

a way to evaluate the user’s first impression of a design which involves asking them to look at a webpage or screen for 5 seconds and then record what they remember about it.

A/B testing

a method of comparing two versions of a variable (such as a web page, email, or application) to determine which one performs better.

Affiliate model 

a business model in which a subject (affiliate) earns a commission for referring customers or traffic to another company’s website.

Affinity diagrams 

a tool used to sort your data and group information according to common themes or characteristics, making it easier for you to understand how facts relate and interact.

Angel Investor

a wealthy individual who invests private funds in startups or small businesses, usually in exchange for ownership equity.

Attitudinal research 

an area of market research that focuses on measuring and understanding people’s stated beliefs and opinions about a particular product, service, or brand. Learn more – How to Conduct Market Research for Your Startup.

Behavioral research 

an area of market research that involves observing and recording people’s activities, choices, and interactions. Learn more – How to Conduct Market Research for Your Startup.

Brand perception map

a visual representation of how consumers perceive a company’s products, services, and overall identity.

Business model

a depiction of the essential components of a business or organization that, when combined, will generate profit.

Button to nowhere

a way of gauging whether users are curious about a product or new features by monitoring their interaction with temporarily inaccessible interface components.

Call to Action (CTA)

a prompt that encourages an immediate response or motivates an individual to take a specific action.

Card sorting 

a UX research method that helps you understand how people put information into categories, enabling you to arrange and structure content in a manner that is easy for users to understand.

Commission model 

a marketplace business model in which a business earns commissions from each transaction.

Competitor analysis 

the process of evaluating the competitive environment in which a company operates. Learn more – How to Conduct a Competitor Analysis for Your Startup.

Context of use

the process of gathering and examining data about how a product or software application is used in real-world scenarios to create individualized experiences that address specific requirements.

Conversion Rate (CR)

the percentage of visitors that completed the desired goal (a conversion) out of the total number of visitors to a website

Cost structure

an organized way of breaking down the costs associated with producing goods or services. It includes both fixed and variable costs.

Customer Lifetime Value (CLV)

the total income you can expect from a customer over the whole period of your relationship.

Customer Retention Cost (CRC)

the amount of money a business must spend to keep one existing customer buying.

Deliverable 

a tangible or intangible item that is produced as the output from a project (deliverables can include items such as reports, plans, documents, designs, and prototypes).

Desk research

a market research method that focuses on analyzing preexisting data. Other names: secondary research, documentary research. Learn more – How to Conduct Market Research for Your Startup.

Elevator pitch

a short and easy-to-understand description of a business, product, or service that could be delivered in the amount of time it takes to ride an elevator.

Ethnography research

qualitative research that involves observing and documenting the behavior of a group of people in their natural environment to gain insight into how they think, feel, and act while they interact with each other and their surroundings. Learn more – How to Conduct Market Research for Your Startup.

Event storming

a workshop-based method that enables participants to quickly and effectively explore complex business domains.

Eye tracking

a method that allows researchers to gain insights into how individuals interact with designs by measuring and observing where they direct their gaze.

First-click testing 

a method that allows checking how intuitively or easily the user can interact with an interface to complete a task.

Focus groups 

a research method in which a group of demographically similar people is brought together under the guidance of a moderator to provide feedback on a particular product or concept.

Framework 

a structure of principles or ideas from which something can be developed or constructed.

Freemium model

a variation of the subscription business model in which a user gets access to a basic (free) product but is charged for additional (premium) features or services.

Growth model

a model used to evaluate the potential for a product, service, or business to expand and increase in size or reach.

Guerrilla research

a quick and affordable method of gathering feedback that involves directly engaging with people in public spaces to check their initial reactions to a product concept.

Impact Mapping 

a collaborative strategic planning and management technique that helps organizations focus on the desired outcome of an initiative.

Information architecture 

is the practice of organizing, labeling, and presenting information within a digital product.

KISS principle

short for “Keep it simple, stupid!”. A design principle according to which designers should strive for simplicity and avoid unnecessary complexity whenever possible.

Lean Canvas 

a business modeling tool designed to help entrepreneurs quickly break down their ideas into important elements. Learn more about Lean Canvas and how to use it.

Marketplace model 

a business model that implies creating a platform connecting buyers and sellers. The marketplace model includes other models: subscription, freemium, commission, listing, and featured ads.

Mental model

an individual’s internal representation of how something works.

Minimum Viable Product (MVP)

a product’s first and most basic version with only the essential features to test if it is marketable. 

Read more: How to create an MVP roadmap for your startup.

Mockup 

a visual representation of a digital product used for showing stakeholders and potential users how the product will look and function.

Money Burn Rate 

the pace at which a business spends money, usually calculated for one month.

Monthly Recurring Revenue (MRR)

the stable and predictable portion of a business’s revenue for one month.

MoSCoW Analysis 

a prioritization technique used to assess the relative importance of items in a project or product. The acronym stands for “Must have, Should have, Could have, and Won’thave.”

Objectives and Key Results (OKR)

a performance management framework used for setting goals that align with an overall strategy and tracking their outcomes.

One-time Payment Model

a business model in which a user must pay only once to obtain a product or service.

Opportunity Solution Tree

a non-linear visual aid used to identify, explore, and evaluate solutions to different problems.

Paper prototype 

a simplified, physical representation of a digital product created by designers to visualize concepts.

PAS formula

a copywriting formula consisting of three elements: describing a problem (P), agitating (A) the audience by stressing how important the problem is, and naming a solution (S) to the problem.

Pitch deck

a brief presentation of a startup product attached to messages sent by founders to investors and presented to them. Learn more – How to create a pitch deck.

Pivot

a major shift in a company’s strategy and operations, typically in response to changes in the market or competitive environment.

Primary research

a market research method that involves collecting information directly. Its four common techniques are interviews, surveys, focus groups, and observations.

Problem definition

a process of analyzing and interpreting your findings (from the problem discovery process) to select and define a problem that you want to provide a solution for.

Problem discovery 

a process of exploring the market with the goal of finding a problem to solve or an opportunity to address.

Product Owner

a role on a Scrum team. Product owners represent stakeholders’ interests, such as customers and business units, and ensure the project meets their needs and expectations.

Product Vision Statement

a concise, high-level description of a product’s direction and the experience it will provide its users.

Profit model 

a framework used to predict and measure the profitability potential of a business venture.

Proof of Concept (POC)

an exercise usually done through prototyping and experimentation to show whether a certain concept or idea can be used in practice. It is used to demonstrate the feasibility of an idea before committing resources to further development.

Prototype

a sample version of a product built to test the idea before investing resources into creating it.

Qualitative research

a type of data collection method that seeks to gain a deep understanding of human behavior. Learn more – How to Conduct Market Research for Your Startup.

Quantitative research

a method used to collect and analyze numerical data to identify patterns in users’ behavior. Learn more – How to Conduct Market Research for Your Startup.

Revenue model 

a model used to identify potential sources of income and the processes by which they can be generated.

Revenue stream

a source of income that an entity or organization derives from providing goods or services.

Screener survey

a tool used to identify the right participants for research studies. Learn more – How to Conduct Market Research for Your Startup.

Search Engine Optimization (SEO)

the process of optimizing a website to make it more visible and attractive to search engine algorithms.

Serviceable Addressable Market (SAM)

a portion of TAM and the total sales volume of a particular product that can be sold by all vendors in a territory a business can serve during the planned period.

Serviceable Obtainable Market (SOM)

a portion of SAM and the number of people or companies that can buy a business’s product within the territory the business can serve for the planned period.

Solution definition

a process during which you validate your solution ideas using various testing methods with the goal of finding a solution that can be turned into a product (an MVP).

Solution discovery

a process where you brainstorm ideas (while considering your research findings) for solving the most impactful user problem.

Subscription model

a business model in which customers pay a recurring price at fixed intervals to maintain access to a product or service.

Total Addressable Market (TAM)

the total number of people or companies who could potentially buy a product or service from all vendors on the market worldwide for the planned period.

Total Revenue Model

a model used to identify the overall revenue of a business, including money generated from the revenue model and additional revenue streams.

Tree testing

a usability testing method used to evaluate the findability and navigational structure of a digital product.

Usability testing

a method of testing that evaluates the user-friendliness and user experience of a digital product by testing it on potential users.

User interview

a UX research method during which the researcher asks questions and listens to the subject’s responses to gain qualitative information directly from potential users.

User persona

a representation of a group of people that outlines their similar characteristics, behaviors, goals, and motivations.

User story

a short, simple description of a feature told from the perspective of the end user.

User story mapping

a technique used to visualize all of the tasks a user completes when using your product.

UVP / USP

a marketing statement informing customers what unique value a company can bring to their life.

UX research

the systematic process of understanding user behavior and motivations to add valuable insights to the design process. Learn more – How to conduct effective UX research.

UX researcher

an individual who specializes in understanding user behavior, needs, and motivations to design products and services that provide the best possible experience. Learn more – How to conduct effective UX research.

Value Stream Mapping

a visual tool used to document, analyze and improve the flow of materials and information required to bring a product or service to a customer.

VC (Venture Capitalist)

a full-time professional investor providing capital to startups with high growth potential in exchange for equity or ownership stake.

Wireframe

a two-dimensional skeletal outline of an interface that represents the structure and purpose of a digital product.