Business dictionary.
33terms you’ll meet while building a business. Every entry answers the same three questions in the same order: what it is, what it looks like, and why you should care.
A
- A/B TestRandomly splitting incoming users between two versions and comparing a metric chosen before the test started. The random simultaneous assignment is what makes it a test rather than a comparison.
- AEOAnswer Engine OptimisationStructuring content so a direct question gets a direct, extractable answer — in a featured snippet, a voice reply, or an answer box.
- APIApplication Programming InterfaceA published set of requests one program will accept from another, and the responses it gives back. It defines what you can ask for without exposing how it's done.
- ARRAnnual Recurring RevenueMRR expressed over a year — usually just MRR multiplied by twelve. It's a snapshot of the current annual run rate, not the revenue actually earned in the last twelve months.
B
- B2BBusiness to BusinessSelling to organisations rather than individuals. The buyer is usually not the only user, purchases involve more than one person, and the decision is justified in terms of cost or risk.
- B2CBusiness to ConsumerSelling to individuals spending their own money. The person deciding, paying, and using are usually the same person, and the decision is fast.
C
- CACCustomer Acquisition CostThe average amount you spend to get one new paying customer. Take everything spent on getting customers in a period — ads, tools, the salaries of people doing it — and divide by the number of customers that period produced.
- CDNContent Delivery NetworkA network of servers in many locations that keeps copies of your files, so a visitor is served from somewhere physically near them instead of from one origin server.
- ChurnThe rate at which customers stop paying you, over a given period. Usually stated monthly or annually, as a percentage of the customers you had at the start.
- Conversion RateThe percentage of people who complete a specific action out of everyone who had the chance to. Both halves — the action and the group — have to be stated for the number to mean anything.
- Crawl BudgetThe rough number of pages a search engine will fetch from your site in a period, based on how important the site seems and how fast it responds.
- CRMCustomer Relationship ManagementSoftware that records who your customers and prospects are, and what has happened with each of them — conversations, deals, and follow-ups.
D
G
I
L
- llms.txtA proposed convention: a Markdown file at a site's root pointing AI systems at a clean summary of its most useful content. It is not a standard and grants no permissions.
- LTVLifetime ValueThe total revenue you expect from one customer across the whole time they stay with you. Often written LTV or CLV, and usually estimated rather than measured, because most customers haven't left yet.
M
- MRRMonthly Recurring RevenueThe predictable revenue a subscription business receives each month, counting only recurring payments. One-off fees, setup charges, and consulting are excluded — the point is what recurs without further selling.
- MVPMinimum Viable ProductThe smallest version of a product that completely finishes one job for one person. "Minimum" refers to the scope of what it promises, not to the quality of what it delivers.
P
- Pricing ModelThe structure by which you charge — flat subscription, per seat, usage-based, tiered, freemium, one-time, or commission. Distinct from the price itself.
- Product-Market FitPMFThe state where a defined group of people want your product enough that keeping up with them becomes the problem. Before it you push; after it the market pulls.
- PWAProgressive Web AppA website built so it can be installed to a phone's home screen and behave like an app — working offline, launching without browser chrome, and sending notifications where supported.
S
- SaaSSoftware as a ServiceSoftware you access over the internet and pay for on a recurring basis, rather than buying once and installing. The provider runs the servers, ships updates, and holds the data.
- SAMServiceable Addressable MarketThe part of the total market you could actually serve, given your product, language, geography, and regulatory reality.
- Search IntentWhat someone wanted when they typed a query — informational, navigational, commercial, or transactional. Distinct from the keyword itself.
- SEOSearch Engine OptimisationThe work of making a site easy for a search engine to crawl, understand, and trust, so its pages appear for relevant searches.
- SOMServiceable Obtainable MarketThe share of the serviceable market you can realistically win in a defined period, given your team, budget, and competition.