Reference
Glossary
Every key term from the guide, in one place. Skim it now; return whenever a word stops you.
- B2B / B2C
- Selling to businesses (B2B: fewer, larger, ROI-driven deals) versus to consumers (B2C: many, smaller, emotion-driven purchases).
- BATNA
- Best Alternative To a Negotiated Agreement — what you'll do if a deal falls through. Your true source of negotiating power.
- Break-even
- The sales level where revenue exactly covers all costs; below it you lose money, above it you profit.
- CAC
- Customer Acquisition Cost — what you spend in sales and marketing to win one customer.
- Cash conversion cycle
- How long cash is tied up between paying for inputs and getting paid by customers. Long cycles strangle growing firms.
- COGS
- Cost of Goods Sold — the direct cost of producing what you sold. Revenue minus COGS is gross profit.
- DCF
- Discounted Cash Flow — valuing a business by its expected future cash, adjusted for the fact that money now beats money later.
- Funnel (AARRR)
- The customer journey stages: Acquisition, Activation, Retention, Revenue, Referral. Measure each to find where you lose people.
- Gross / Operating / Net margin
- Profit as a percentage of revenue at three levels: after direct costs, after running the business, and after everything.
- Issue tree
- A problem broken down, MECE, into ever-smaller drivers until each is a checkable question.
- LTV
- Lifetime Value — total profit from a customer over the whole relationship. Should comfortably exceed CAC.
- MECE
- Mutually Exclusive, Collectively Exhaustive — parts that don't overlap and together cover everything. The structuring discipline.
- Moat
- A durable competitive advantage (cost, network effects, switching costs, brand/patents, scale) that protects profits from competition.
- OKR
- Objectives and Key Results — a qualitative goal paired with a few measurable results that show progress toward it.
- Positioning
- The deliberate choice of for whom you're the obvious best option, and why. Cascades into pricing, messaging, and product.
- Pyramid Principle
- Communicate answer-first: lead with the recommendation, then reasons, then evidence.
- SCQA
- Situation, Complication, Question, Answer — a reliable structure for opening a document or pitch.
- Scope creep
- The quiet expansion of a project beyond what was agreed; the main way profitable engagements turn into losses.
- TAM / SAM / SOM
- Total, Serviceable Addressable, and Serviceable Obtainable Market — the full market, the reachable slice, and the realistically winnable share.
- Theory of constraints
- Throughput is limited by the single slowest step (the bottleneck); improving anything else barely helps.
- Unit economics
- Whether a single customer or unit makes money — chiefly the relationship between CAC and LTV.
- Value-based pricing
- Pricing against the value created for the client rather than the hours spent. Aligns fee with worth.
- Working capital
- Cash tied up in day-to-day operations: receivables plus inventory, minus payables.