Glossary
Short definitions of the strategy, product, and decision-making vocabulary that recurs across the catalog.
A
- Activation
The point a new user has experienced enough of the product's core value that they're likely to return — usually defined by a specific in-product behavior.
- Aha Moment
The specific point in a new user's experience when they first understand why the product matters to them — when intent converts to belief. Identifying and accelerating users to the Aha Moment is the core of activation-stage product work.
- ARR / MRR (Annual / Monthly Recurring Revenue)
Annual Recurring Revenue is the normalized yearly value of all active subscriptions; MRR is the same figure expressed monthly. Together they are the headline revenue metrics for any subscription business.
B
- Blue Ocean
A market space where competition is irrelevant because the offering is uncontested — created by either redefining an industry's value proposition or by entering an entirely new market segment.
- Burn Rate
The amount of cash a company spends per month in excess of what it earns. Gross burn is total monthly spend; net burn subtracts revenue collected. Burn rate is the rate at which runway depletes.
C
- CAC (Customer Acquisition Cost)
The total sales and marketing spend required to acquire one new paying customer, averaged across a period. Computed as sales + marketing spend / net new paying customers.
- CAC Payback Period
The number of months it takes for a customer's gross profit to repay the cost of acquiring them. The standard threshold of efficient SaaS growth is under 12 months for SMB, under 18 months for mid-market, under 24 months for enterprise.
- Churn
The rate at which customers stop using or paying for a product over a given period. Customer churn measures lost logos; revenue churn measures lost recurring revenue. Usually expressed as a monthly or annual percentage.
- Cohort Analysis
A method of analyzing user behavior by grouping users into cohorts based on a shared event (usually signup date) and tracking how each cohort's behavior evolves over time, rather than averaging across all users at once.
- CSAT (Customer Satisfaction Score)
A satisfaction metric measured by asking customers to rate a specific interaction or experience, typically on a 1–5 or 1–7 scale. CSAT is calculated as the percentage of customers who rate 4–5 (or 6–7), making it a transaction-level complement to NPS's relationship-level measurement.
D
F
I
J
K
L
M
- Moat
A sustainable competitive advantage that protects a business from competitors — analogous to a castle moat. Warren Buffett popularized the term in investing; the same concept applies to product strategy.
- MVP (Minimum Viable Product)
The smallest version of a product that can be shipped to real users to test a critical hypothesis — not a polished early version of the final product, but a learning instrument.
N
- North Star Metric
The single metric that best captures the core value a product delivers to its customers — the one number every team can rally around.
- NPS (Net Promoter Score)
A single-question customer loyalty metric calculated as %Promoters (9–10) minus %Detractors (0–6). NPS ranges from −100 to +100. Above 30 is good, above 50 is excellent, above 70 is best-in-class.
- NRR (Net Revenue Retention)
The percentage of recurring revenue retained from existing customers over a period, including expansion and contraction but excluding new acquisitions. NRR above 100% means existing customers grew your revenue net of churn.
O
P
- Positioning
The deliberate choice of how a product is described, framed, and compared so a defined customer immediately understands why they should choose it over alternatives. Positioning is the bridge between segmentation and messaging.
- Product-Market Fit
The state where a product satisfies strong market demand — typically signaled by usage growing without forced acquisition and >40% of users saying they'd be 'very disappointed' if the product disappeared.
R
- Retention
The share of customers (or users, or revenue) that continues to engage with a product over a defined time window. Retention is the closest single proxy for whether a product is delivering ongoing value.
- Rule of 40
A SaaS-investing heuristic: a healthy software company's growth rate plus its profit margin should sum to at least 40. The rule trades growth for profitability — either 40% growth with 0% margin or 0% growth with 40% margin clears the bar.
- Runway
The number of months a company can continue operating at its current spend before exhausting its cash. Runway = current cash ÷ monthly net burn. It is the most important number on a startup CEO's dashboard.
S
- Segmentation
The practice of dividing a market into groups that share buying behavior, needs, or willingness to pay. Useful segmentation produces groups large enough to matter and homogeneous enough to act on differently.
- SWOT
A 2×2 strategy framework that maps a position across four dimensions: internal Strengths and Weaknesses (what the team controls) and external Opportunities and Threats (what the market is doing around it). Developed by Albert Humphrey at Stanford in the 1960s.
T
- TAM / SAM / SOM
Three nested market-sizing figures: Total Addressable Market (the whole opportunity), Serviceable Addressable Market (the slice your offering can reach), and Serviceable Obtainable Market (the slice you can realistically win in the near term).
- Time to Value (TTV)
The time between a customer signing up for a product and experiencing its first meaningful value. Short TTV correlates strongly with retention; long TTV correlates with churn before users ever see what the product can do.