Glossary
Every term a Founder Verdict uses, in plain words, and why it matters for you.
- TAMtotal addressable market
- Everyone in the world who could ever buy this, in money per year.
- Why it matters: Shows the ceiling. A tiny TAM caps how big this can get.
- SAMserviceable available market
- The part of the TAM you could actually reach with your product, price and location.
- Why it matters: This is the market you are really competing in.
- SOMserviceable obtainable market
- The slice of the SAM you could realistically win in the first few years.
- Why it matters: Plan your money around this number, not the TAM.
- CACcustomer acquisition cost
- What it costs, on average, to win one paying customer.
- Why it matters: If it costs more to win a customer than they pay you, growth loses money.
- LTVlifetime value
- How much money one customer brings in before they leave.
- Why it matters: Tells you how much you can afford to spend to win each customer.
- LTV:CAC
- Lifetime value divided by the cost to win a customer. 3:1 is a common healthy target.
- Why it matters: Below 1:1 you lose money on every customer.
- MOQminimum order quantity
- The smallest batch a factory or supplier will make for you.
- Why it matters: Decides how much cash you need before you sell a single unit.
- Unit cost
- What it costs to make one item, before shipping and duties.
- Why it matters: The starting point for your margin.
- Landed cost
- The full cost of one item once it reaches you: making it, shipping, duties and fees.
- Why it matters: Your real cost per unit. Price below it and you lose money on every sale.
- Lead time
- How long from placing an order to having stock in hand.
- Why it matters: Long lead times tie up cash and make running out of stock costly.
- COGScost of goods sold
- The direct cost of what you sold: materials, making it, delivering it.
- Why it matters: Revenue minus COGS is what you have left to run the business.
- Gross margin
- The share of each sale left after direct costs. (Price − cost) ÷ price.
- Why it matters: Low margins leave little room for marketing, salaries and mistakes.
- Burnmonthly burn
- How much more money goes out than comes in each month.
- Why it matters: Divide your cash by it to see how long you can keep going.
- Runway
- How many months you can keep going before the money runs out.
- Why it matters: The deadline for proving the idea works or raising more.
- Break-even
- The point where money in equals money out.
- Why it matters: Past it, the business pays for itself.
- Churn
- The share of customers who stop paying each month.
- Why it matters: High churn means you keep refilling a leaky bucket.
- Moat
- Whatever stops a copycat or a big company from taking your customers.
- Why it matters: Without one, success attracts competitors who undercut you.
- ICPideal customer profile
- A precise picture of the customer who needs this most and pays fastest.
- Why it matters: Everything gets cheaper when you sell to the right person first.
- Go-to-marketGTM
- How you reach your first customers and get them to buy.
- Why it matters: Most good products fail on distribution, not on the product.
- Pre-mortem
- Imagine it is a year from now and the idea failed, then list why.
- Why it matters: Finds the risks you would otherwise only see in hindsight.
- Lean Canvas
- A one-page summary of a business: problem, customer, solution, channels, money.
- Why it matters: Shows the gaps in a plan at a glance.
- Porter's Five Forces
- Five things that squeeze profits: rivals, new entrants, substitutes, buyers and suppliers.
- Why it matters: Shows who can push your prices down or your costs up.
- Go line
- A FounderOS Score of 70. At or above it, the evidence says build; below it, fix the catch first.
- Why it matters: One clear threshold instead of a vague "maybe".