Glossary

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.

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.

The total sales and marketing spend required to acquire one new paying customer, averaged across a period.

The rate at which customers stop using or paying for a product over a given period. Usually expressed as a monthly or annual percentage.

A self-reinforcing business mechanic where each part of the system makes the next part stronger — producing compounding rather than linear growth.

The total gross profit a business expects from a single customer over the entire duration of their relationship.

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.

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.

The single metric that best captures the core value a product delivers to its customers — the one number every team can rally around.

The state where a product satisfies strong market demand — typically signaled by usage growing without forced acquisition and customers being upset if the product disappeared.

The revenue and cost associated with a single 'unit' of a business — typically one customer or one transaction. The fundamental test of whether a business model can ever be profitable.