Speak the language

Entrepreneur and AI glossary

Plain-English definitions of the terms you will hear as you build a modern business.

Business fundamentals

Niche: a specific group of customers with a specific problem you solve.
Offer: what you sell, including the outcome, deliverables, price and guarantee.
Value proposition: the clear reason a customer should choose you.
MVP (minimum viable product): the smallest version of a product that delivers real value and lets you learn.
Product-market fit: when a product clearly satisfies strong demand in a market.
Bootstrapping: growing a business from your own revenue instead of outside investment.
Productized service: a service sold with fixed scope, timeline and price.

Funnel: the series of steps that turns a stranger into a customer.
Lead magnet: a free resource offered in exchange for contact details.
Conversion rate: the percentage of people who take a desired action.
CAC (customer acquisition cost): what you spend on average to win one customer.
LTV (lifetime value): the total revenue you expect from a customer over time.
Churn: the rate at which customers cancel or stop buying.
Upsell: offering a higher-value option to an existing buyer.
Pipeline: the set of prospects moving toward a purchase.

LLM (large language model): an AI model trained on large amounts of text that can understand and generate language.
Prompt: the instructions and context you give an AI model.
AI agent: an AI system that can plan steps and use tools to complete a task.
Open model: an AI model whose weights are publicly available to run and adapt.
Hallucination: when an AI model produces confident but incorrect information.
RAG (retrieval-augmented generation): giving a model relevant documents to ground its answers.
Evaluation (evals): tests that measure how well an AI system performs a task.
Human-in-the-loop: a process where a person reviews or approves AI actions.
Automation: using software to complete repetitive tasks without manual effort.

MRR (monthly recurring revenue): predictable revenue from subscriptions each month.
Gross margin: revenue minus the direct cost of delivering your product, as a percentage.
Runway: how long your business can operate with current cash.
KPI (key performance indicator): a metric that shows whether you are on track.