Startup Opportunities, 2nd Edition

Glossary

800-pound gorilla:

A marketing term for the largest player in a market, one that is so dominant it can do whatever it wants without regard to the competition. For example, Amazon.com is the 800-pound gorilla in the book industry.

10× Rule:

To displace incumbents, a new solution must be exponentially better, faster, cheaper, stronger, etc. Being a little better isn’t enough. For example, e-mail was so widely adopted because it was 10× faster than the traditional postal service.

arm’s length:

A term of law, referring to two parties not otherwise connected. If you sell property to a family member, there may be concern that the transaction was not at “arm’s length” and the property might have been sold for less than it is worth. As another example, a buyer may request an “arm’s length audit” of a company’s financials before buying.

ARPU:

A retail term, average revenue per user, referring to how much money each user will generate for the solution provider. For example, on average, each new user of iTunes buys $100 worth of music in her first year. Thus, the ARPU for iTunes would be $100.

availability bias:

Our thinking is greatly influenced by what is personally relevant, impactful, and recent. We estimate the probability of an outcome based on how easy that outcome is to imagine.

back channels:

A business term referring to an alternative secondary and less formal communication stream. For example, once negotiations broke down formally, the assistants had to resort ...