Glossary of terms and acronyms that are useful in Entrepreneurship
by Jack M. Wilson; Distinguished Professor of Higher Education, Emerging Technologies and Innovation
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AP - Accounts Payable: Money that a firm owes to others, but has not yet paid.
AR - Accounts Receivable: Money that others owe to the firm, but have not yet paid.
Born Global - Firms that are created to operate globally from their inception.
Business Model - How a company creates, delivers, and captures value in the market place. That value can be in economic, social, governmental, cultural or other contexts
Business Model Innovation - By developing a new business model, a company can often compete with or displace more established competitors.
CEO - Chief Executive officer
CFO - Chief Financial Officer
CIO - Chief Information Officer
COGS - Cost of Goods Sold
Component Innovation: When the larger product or service remains largely the same, but components of the larger system change. Replacing carburetors with fuel injection was a component innovation in automobiles. Replacing incandescent headlights with LEDs is another. It can be a radical innovation for the component, but is probably an incremental innovation for the larger product. Recombinant Innovation is a related term.
COO - Chief Operating Officer
Core Logic - Articulates the mission and business model for how an organization creates value.
Corridor Principle - One notices opportunities or open doors because of the path that one is on. If you do not walk the corridor, you cannot see the open doors.
Creating value: Implementing an idea or innovation which makes a difference that might be economic, social, cultural, or other.
Creative Destruction: Joseph Schumpeter, Harvard University and an economist from Austria, proposed in 1934 that new products and technologies make old products and technologies obsolete.
Crisis Driven –Need pull innovation on steroids. Ex: Zika Virus vaccine
CTO Chief Technical Officer
CV Commercial Venture -Any organization created to return a profit to the owners.
Disruptive Innovation: A process, proposed by Harvard Professor Clayton Christensen, in which innovation allows an organization to find a niche in a less profitable and interesting part of the market and then learn how to grow and take over the more profitable parts of the market from much more established competitors.
EBIDTA Earnings before Interest, Depreciation, Taxes, and Amortization
Effectual Entrepreneurship A model postulated by Saras Sarasvathy in 2001 as an alternative to causal entrepreneurship which sets goals and then seeks resources. EE looks at the resources and then selects the goals.
Entrepreneurial Capacity - the ability of entrepreneurs to react to entrepreneurial opportunities. this is often affected by culture, education, experience, and the entrepreneurial environment.
Entrepreneurial Environment or Entrepreneurial Opportunity Environment. The conditions in any country or region that can permit and encourage entrepreneurial activity. this includes cultural issues, the educational levels, political environment, and regulatory issues, among others.
GAAP Generally accepted accounting principles
Gazelle A very rapidly growing new venture over a sustained time period. At least 20% yearly growth is a rule of thumb.
GEM Global Entrepreneurship Monitor - Begun in 1999 by a collaboration between universities to follow ten countries. It expanded to 42 countries by 2008 and over a hundred by 2014. It monitors and reports on entrepreneurship in countries around the world.
GL General Ledger
Incremental Innovation: Innovations that remain close to the original products or services but add some innovative features. As contrasted with radical innovation.
IP Intellectual property
IPO Initial Public Offering
LBO Leveraged Buyout
Knowledge Push – New knowledge or research suggests some new opportunities
Lean Launchpad A model of entrepreneurship developed by Steve Blank and adopted by the National Science Foundation that bypasses the business plan.
LLC Limited Liability Corporation
LLP Limited Liability Partnership
Market Segmentation: Analyzing a market and decomposing that market into different parts or segments in order to find a suitable “target market.”
Mass Customization: Have it your way. Dell Computer, in 80s and 90s built PCs to order and shipped direct to customer. Converse allows customers to order personalized athletic shoes
NAFTA North American Free Trade Agreement - a trilateral trade agreement between the United States, Canada, and Mexico
NDA Non-disclosure agreement
Need Pull – When an unfulfilled need is present and someone comes up with an idea to fill that need
NTBF - New Technology Based Firms
P&L Profit and Loss statement
Pivot A change in direction of a new venture based upon information obtained from prospective customers
Process Innovation – making an existing process work better –Ex: Total quality management, business process re-engineering, Six Sigma, Lean Management, etc.
Protectionism Actions taken by nations to give advantage to their own local industries. These are often tariffs, but can also be done through other kinds of restrictions on imports.
Radical Innovation: Innovation that significantly departs from the established product or services. As contrasted with Incremental Innovation.
RFP Request for Proposal
ROA Return on Assets
ROE Return on Equity
ROI Return on Investment
ROS Return on Sales
SEC Securities and Exchange Commission
SBA Small Business Administration
SBIR Small Business Innovation Research Grant
Segmenting a market: Identifying a market and then dividing it into various sub markets or segments in order to identify a “target market.”
Social Enterprise: An organization that incorporates social, environmental, and cultural goals. Often they are pursuing the “triple bottom line.”
Social Entrepreneurship: When entrepreneurship and innovation are primarily directed toward creating social value rather than economic value. This can be done by either non-profit organizations or for-profit organizations.
SME: Small Medium-sized Enterprises
STTR Science and Technology Transfer Research
Target Market: Once an appropriate market segment has been identified as interested in a product or service, that segment may be designated as the target market.
TPP Trans-Pacific Partnership -Pacific area free trade agreement (proposed and very controversial)
Trade liberalization A process in which any country remove obstacles to trading with other countries. This often refers to reduction or removal of tariffs and other legal barriers to trade. In many cases there are bilateral and multilateral agreements (WTO, NAFTA and TPP are examples) to define the trading environment. These are often controversial because they remove protections for internal markets in the expectation that the growth of external markets will be more beneficial and enhance the local economy more than any local losses. This is often a subject of political disagreement.
Triple Bottom Line: Focusing a company on environmental and social (internal and external stakeholders) goals rather than only on financial and economic goals.
Uppsala Model - Created by Professors from Uppsala University in Sweden to describe the process of a company evolving from a domestic to an international firm. It is an incremental model as compared to the "Born Global" model.
Unicorn A startup company that achieves a valuation of $1 Billion dollars.
Unicorpse A Unicorn that tried to grow too rapidly and encountered obstacles that eventually proved to be fatal
USPTO United States Patent and Trademark Office
VC Venture Capitalist
WTO World Trade Organization
Wikipedia has a more complete list of business acronyms here: <Wiki> https://en.wikipedia.org/wiki/List_of_business_and_finance_abbreviations
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