By Ryoko Hirano, Director of Market and Business Acceleration
Whether you’re interested in becoming an entrepreneur, or you’ve already had a long entrepreneurial career, it doesn’t hurt to brush up on your Silicon Valley terminology. A lot of jargon exists out there, but we’ve identified the top 15 terms in the innovator ecosystem you need to know when you’re starting out.
1. Silicon Valley: Yes, that’s right, Silicon Valley. Do you know which cities actually make up Silicon Valley? To name just the top few, it includes Cupertino, Mountain View, Santa Clara and San Jose. Silicon Valley’s history dates back to the 1950s, and to this day, along with the greater San Francisco Bay Area, remains the hot spot for the world’s largest technology companies.
2. Incubator: Incubators support early-stage founders who may not even have a business model yet, so need help with the initial ideation. Contrary to popular belief, incubators and accelerators shouldn’t be lumped together. Though they have similarities, with the end goal of starting valuable companies through entrepreneurs with supportive resources, there are differences to highlight. Key differentiators include the business starting point, timing, type and application. Incubators are more likely to be publicly funded, so the startups are often in the nonprofit space, but each program can vary. Incubators don’t always have set timelines like accelerators do, nor do they always offer a cohort for entrepreneurs.
3. Accelerator: An accelerator drives rapid business development by scaling an early-on existing company, and provides crucial resources to entrepreneurs to turn the technology into a healthy and viable for-profit business. Application into an accelerator is competitive because of the great value entrepreneurs gain from having assistance with the final push to truly get the business going rapidly. Examples of entrepreneur perks include a dynamic and supportive team and cohort, workshops and coaching, as well as the funding to run the project. There are clear start and end dates for the startup business going through the acceleration process.
4. Entrepreneur-in-Residence: Often abbreviated as “EIR,” this is a short-term position in which a successful entrepreneur brings forth their expertise in a specific industry. They are passionate about changing the world. EIRs are sponsored by an innovation-focused organization to develop and grow a high-potential startup. They hypothesize how their startup technology can alleviate customers’ problems and become their newfound solution. EIRs work collaboratively within a team to incubate a concept, accelerate the development, and work to secure external funding to support further business growth.
5. Disruptor: A new product or service that completely shifts a market path, to then be considered the new normal, or the new standard. This type of transformation is often sought by entrepreneurs.
6. Prototype: This is a mock example of what the new product or service looks and feels like. There can be low-fidelity concepts, which are more basic, and not necessarily usable, but that give a general idea. High fidelity offers a more technological, comprehensive model that is more tangible and interactive.
7. Minimum Viable Product (MVP): The simplest prototype of a product that can provide enough information to a potential customer to determine their level of validation.
8. Early Adopters: Potential customers selected to test product prototypes. They see the potential in a product or technology before it has gained mass-market popularity. Using input from early adopters helps founders create better business decisions regarding the new product or service in development.
9. Problem-Solution Fit: It’s crucial to identify the existence of a problem that can be solved through the startup. There must be evidence that customers have a need that isn’t currently being met or where there is room for improvement. By initiating research into a problem-solution fit, entrepreneurs are better prepared to succeed because they identify who will actually buy their solution. During this stage, EIRs interview many potential customers to validate the hypothesis. The problem needs to be real, while the new solution needs to be right and worth purchasing.
10. Product-Market Fit: Once a minimum viable product (MVP) is developed, it is tested with early adopters. Through this engagement, the product’s fit in the market can be determined.
11. Customer Development Model: This model begins with customer discovery. Entrepreneurs identify problem-solution fit through quick iteration of hypothesis creation, customer interviews and demonstrations of the MVP. Second is customer validation, to verify product-market fit through proof of concept with early adopters using a high-fidelity MVP and to affirm whether customers will actually buy the product or service. Third is customer acquisition, during which the strategy to acquire the first customer and all others afterward is decided. Together, entrepreneurs can build their businesses around these steps with acquiring customers as the top priority for success.
12. Proof of Concept: A method or exercise to demonstrate the feasibility of the startup.
13. Venture Capital: Private equity financing, also known as capital investment.
14. Venture Capitalist: Also known as a VC, this refers to either a person or a company that invests in a startup, usually with over $1 million in assets. They scope out the top business ventures with the most potential to provide money and expertise in exchange for some level of involvement, and strive to help the company achieve an exit, through IPO or acquisition. VCs typically focus on Series-A-and-later funding rounds.
15. Angel Investor: Like a VC, an angel investor provides capital for a promising startup, but since they are often an individual, who likely has other obligations, their investment is usually under $1 million. They are less likely to be involved in daily business operations. For most startups, angel investors are typically the very first funders.
At NEC X, we incubate concepts and accelerate the development of companies that use NEC Labs’ emerging technologies to improve society and drive innovation. Our startups are led by our EIRs. As part of a skillful team, an NEC X EIR benefits from mentorship, access to funding and the ability to license our intellectual property. The duration of our Corporate Accelerator Program is about six to 12 months, with several batches moving through the program each year. To learn more about our EIR opportunities, please tell us more about your background, here.