Dear Beginners! Here are Startup Terms 101!
A lot of people were talking about startup these days and you should know!
In these modern days, the ecosystem of startups keeps growing and improving. From the early stage, to big startups appearing in public from various sectors and with various products as well. In Indonesia as we know, there are well-known startups such as Gojek, Traveloka, Tokopedia and many more. According to the Indonesia Digital Creative Industry Society database, there are 992 active startups with over half of them based in Jakarta and its surrounding suburbs in 2018. Which means, this can be a chance for you to delve and explore the dynamics of startups. But, if you are still unfamiliar with the terms or buzzwords regarding startups, worry not! We have these covers for you!
- Accelerator: This means a program or organization that helps small businesses grow through giving mentorship, advice, or resources.
- Agile Methodology: This is a methodology that employs speed changes and directions, and is highly responsive to customers’ needs.
- Angel Investor: This is a person who invests his or her money in an early stage business in exchange for a share in the business. Jeff Bezos, CEO of Amazon is one of the world’s well known angel investors.
- Bootstrap: This term evolves from the phrase “pulling oneself up by one’s bootstraps”, that means to self-fund using personal resources to run the business.
- Decacorn: This is a term for a company valued over US $10 Billion.
- Design Thinking: This means on how to approach a problem by organizing the way to solve problems through breaking the status quo and/or our biases. There are things that need to be implemented, there are diversification of the team, and researching certain groups of users. There are five steps in design thinking: Empathize, Define, Ideate, Prototype, and Test. Design Thinking aims to understand what customers’ needs are.
- Growth Hack: This is a marketing method that emphasizes the advancement of technology and low cost, in order to reach higher results, revenues and also increasing the quality of the product or business model.
- Incubator: This is a collaborative program to support new startups to grow and succeed. There are services provided for the new startups such as workspace, seed funding, mentoring, training and other services.
- Lean Startup: This is an approach that emphasizes continuous improvement for the product and overall production in the midst of extreme uncertainty by creating minimum viable products (MVP) and giving the customers chances to determine the value.
- Minimum Viable Product (MVP): MVP is a product with features that is enough to attract early adopters/customers and give a chance to entrepreneurs to begin the process of learning and improving the product.
- Pre-Seed Funding: This refers to the earliest process in which founders start their operations for the first time. Usually the funders in the “pre-seed” phase are the founders itself or other people around the founders.
- Seed Funding: This refers to the first phase of official equity funding. Which means, this is the first time founders received official funding from business ventures or enterprises in order to grow the business.
- Series A Funding: This phase happens once a business has developed a track record such as established user base, consistent revenue, and many other key performance indicators. This funding gives a chance for founders to further optimize its products and user base. The funding in Series A is usually raised around $2 million to $15 million. In this phase, investors are looking for great ideas, as well as strong strategies to turn into successful businesses.
- Series B Funding: In this phase emphasize on taking the business past the development stage to the next level. Which means, this phase prepares the business for the larger scale of demand. Usually, Series B funding is raised around $33 million.
- Series C Funding: In this phase, usually the businesses are already more successful than the previous phases. These phases emphasize on scaling the company to be more successful as quickly as possible by developing new products, expanding the market, acquiring other companies, and many more.
- Unicorn: This is a term that is used to describe a company valued at US $1 Billion or more. This term was coined by the founder of Cowboy Ventures, Aileen Lee in 2013.
There are still many terms, but those are some of the most frequent terms. So, worry not! Start exploring and delving into the startup ecosystem!
Written by Ratna Latif
References:
https://www.alphajwc.com/en/the-differences-between-unicorn-decacorn-and-hectocorn/
https://www.bmc.com/blogs/design-thinking-vs-lean-vs-agile/
https://greenhouse.co/blog/challenges-running-startups-indonesia/
https://startupguide.com/startup-jargon-terms-you-need-to-know
