Someone new to the world of entrepreneurship will notice right away that entrepreneurs have an interesting way of speaking. From “unicorn” to “bootstrapping” to “foodpreneur,” entrepreneurs use a lot of strange language to describe what they do. By combining words, or by assigning new meaning to old ones, they have created a whole new vocabulary to better communicate their needs and ideas in an ever-evolving ecosystem. The EntrepreLingo Series is an effort to fill our readers in on some of the weirder—or less straightforward—terms you’re sure to hear in an entrepreneurial environment. So far, we’ve covered: A, B, C, D and E, F through H, I through L, and M and N. This week, we’re taking a look at P and Q.
Pain Point
The pain point is the problem an entrepreneur attempts to solve with his or her product or service. Identifying the customer’s pain point is essential; the more pain a customer feels, the more likely he or she is to pay for a solution.
Paradigm Shift
A paradigm shift is a major change that occurs when a new technology drastically alters how a product or service is completed. One of the most well-known examples of a paradigm shift occurred in 1913, when Henry Ford introduced the assembly line to his auto manufacturing process.
Pipeline
The pipeline is where your product or service exists when it is past the starting point but not yet complete. Something that is “in the pipeline” is currently in process.
Pitch Deck
A pitch deck is a visual presentation that provides an overview of your business. A pitch deck covers everything from your company’s team members to its business model and how a potential investor’s money would be spent.
Pivot
A pivot occurs when a company’s business model changes in response to feedback from its customers or to changes in the market. A pivot does not necessarily mean a business is doing poorly; in fact, it may indicate that a business has discovered a better solution for their customer’s problem.
Preferred Stock
Preferred stock is an option that offers higher claims on assets and earnings than common stock. An advantage of preferred stock is that it is more secure; preferred stockholders are paid a guaranteed dividend before common stockholders. A disadvantage is that preferred stockholders are not granted voting rights in the company. And—because of its guaranteed dividend—preferred stock trades at a more stable price, meaning there is a lower chance of making a significant capital gain.
Proof of Concept (POC)
Proof of concept is a study or demonstration that leads to documented evidence that the success of your company’s product or service is feasible.
Prototype
A prototype is a replica of the product your company plans to manufacture or sell. Prototyping is an essential early step in developing a product; prototypes have the ability to show strengths and weaknesses in your product’s design. Initial prototypes can be made of household items, while later prototypes—like the ones created just before production—are usually made from the materials of which the actual product will eventually be made.
QoQ (Quarter over Quarter)
Quarter over Quarter comparisons reflect changes that occur from one quarter to the next; comparisons are calculated by subtracting the previous quarter’s numbers from the current quarter’s numbers, then multiplying that value by 100 to get the percent change.
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