Unified Modeling Language – UML

From Wikipedia:

The Unified Modeling Language (UML) is a general-purpose modeling language in the field of software engineering. It provides a set of graphic notation techniques to create visual models of object-oriented software-intensive systems. It was developed by Grady BoochIvar Jacobson and James Rumbaugh atRational Software in the 1990s.[1] It was adopted by the Object Management Group (OMG) in 1997, and has been managed by this organization ever since. In 2000 the Unified Modeling Language was accepted by the International Organization for Standardization (ISO) as a standard for modeling software-intensive systems.

Foreign Keys

While building a data model with some colleagues at work, the term "foreign Keys" came up. Here's a quick definition from Wikipedia:

In the context of relational databases, a foreign key is a field (or collection of fields) in one table that uniquely identifies a row of another table.[1][2][3] In other words, a foreign key is a column or a combination of columns that is used to establish and enforce a link between two tables.

I also recommend reading this entry on "Data Modeling"

Social Entrepreneurship or Social Entrepreneur

Social Entrepreneurship: To me a Social Entrepreneur is someone who has decided that there’s more to a job than cashing a paycheck.  It is someone who understands that if you have the freedom to pick your career – and many of you do – you should be conscious of the larger effect you have on the world.

In a more literal sense a social entrepreneur is someone who measures the health and success of their business with the not only the traditional financial ‘bottom line’ – but also with a social bottom line; measuring their businesses impact on the world and those around them and using those metrics along with traditional business metrics to run financially viable, sustainable, impactful businesses.

For this post I asked a few of my friends and colleagues to tell me what they thought a Social Entrepreneur was:

Steve Wanta is the Executive Program Director of the Whole Planet Foundation, and founder of Center 61, a co-working space in Austin, Texas for Social Entrepreneurs and Non Profits.

A social entrepreneur is a person that applies the principals of business to address the needs of society by creating value for its stakeholders.

-Steve Wanta

Jon Kolko is the VP of Design at MYedu and the Founder and Director of the Austin Center for Design. In his book “Wicked Problems” he writes:

Like an entrepreneur, a social entrepreneur starts a company and assumes the risk. The difference, though, is the type of problem. A social entrepreneur works in the context of a humanitarian problem. Rather than efforts directed toward something like better vacuuming (and large economic profits), the drive is toward helping people and creating social capital, the non-economic wealth within a community. (source)

It’s not all wine and roses however, and there has been a fair bit of backlash as the term has become more widely used in the last several years.  Here is a great little article from Forbes talking to the strengths and weaknesses of the social enterprise.

Go forth and create value.

Information Architecture – IA

Information Architecture – IA: (Information Architect) Someone who makes buildings out of big data.  Or, someone who takes a massive amount of information and makes it usable.

Wikipedia has an ok, but confusing definition, that I don’t recommend, here.  A much better description of Information Architecture is here on the Motive Glossary:  (there are also some great references and further readings on that site, so click on the link!

Information architecture describes the structure and methodology by which information (such as website content), is organised.

Information architecture is typically formulated through consideration of user intention (primary tasks), and managing the relationship between the user and content or services (how tasks can be completed). A humanist perspective would place emphasis on catering solely to the user’s needs however, for commercial organisations, business needs are an additional consideration. For example, a business may want to promote messages or products that would not be actively sought-out by the user.

If you’re interested in further resources, check out these great web tutorials from Webmonkey on IA (there are a whole bunch of them there)

And finally, this is a really good breakdown of IA, here on The Guardian Blog.  Why is it a good breakdown?  Because of the first line, and the blank looks any and all Information Architects have gotten.

What is ‘Information Architecture’?  Telling people at parties that you are an ‘Information Architect’ generally leads to blank looks all round. Here is a brief overview of “the art and science of organizing websites”.

Let’s party.

Wireframe

Wireframe: Wireframes are the framework of a design – the bones and muscles over which the the skin and makeup will later be placed.  From the Wikipedia definition below, I think the most succinct phrase describes wireframes as focusing on “what a screen does, not what it looks like”.  That said wireframes can exist at many levels of fidelity.  From loose sketches on the back of a napkin to very tight production ready wireframes.

website wireframe, also known as a page schematic or screen blueprint, is a visual guide that represents the skeletal framework of awebsite.[1] Wireframes are created by User Experience professionals called Interaction Designers. The interaction designers who have broad backgrounds in visual design, information architecture and user research, create wireframes for the purpose of arranging elements to best accomplish a particular purpose. The purpose is usually being informed by a business objective and a creative idea. The wireframe depicts the page layout or arrangement of the website’s content, including interface elements and navigational systems, and how they work together.[2] The wireframe usually lacks typographic style, color, or graphics, since the main focus lies in functionality, behavior, and priority of content.[3] In other words, it focuses on what a screen does, not what it looks like.[4] Wireframes can be pencil drawings or sketches on a whiteboard, or they can be produced by means of a broad array of free or commercial software applications. (source Wikipedia)

So what does it look like?  Check out this great tubmlr with a lot of examples of different kinds of wireframes.

And then check out this great post on wireframing and the art of the thumbnail sketch.

As a designer I often spend far too much time on the computer, so I love every opportunity I have to close the computer and get out the pen and paper.  For me, wireframes always start with a pen and paper.

If you’re designing phone apps, check out some of these handy downloadable templates to help you sketch them out as well.

SaaS – Software as a Service

SaaS – Although often mistaken for ‘Sugar and and Spice’ SaaS – in the startup world – actually stands for “Software as a Service

I like this description below:

Software as a service is also known as on demand software; these are pieces of computer software that are accessed remotely through connected servers. Software like this is either free of charge or subscription-based, eliminating the hassle of purchasing software. The first pieces of software as a service were used in web development, but modern on demand software is used for processing taxes, gaming and word processing. Using software in the cloud offers consumers and developers tremendous advantages, such as faster availability and better marketing potential. (Source: John’s Software as a service)

From the other side of the table, VC Doug Pepper wrote an interesting article on Tech Crunch comparing IPO offerings:  Sexy IPO’s vs SaaS’y IPO’s

Here are a few examples companies:

Salesforce  -  (you can see their explanation of SaaS here)

Bazarvoice

Freshbooks

Mozy

What are your favorite SaaS’y companies?

NRE – Non Recoverable (or Recurring) Engineering fee

NRE: Non recoverable Engineering fee or Non Recurring Engineering fee.  Say your startup develops a software platform to sell to companies, but one company wants a custom interface that is only applicable to them.  This would mean that your efforts would only benefit that company, and would not be able to be rolled out across all of your platforms.  In this case you would consider charging the company a NRE for the development of their custom interface.

Non-recurring engineering (NRE) refers to the one-time cost to researchdevelopdesign and test a new product. When budgeting for a project, NRE must be considered to analyze if a new product will be profitable. Even though a company will pay for NRE on a project only once, NRE costs can be prohibitively high and the product will need to sell well enough to produce a return on the initial investment. NRE is unlike production costs, which must be paid constantly to maintain production of a product. It is a form of fixed cost ineconomics terms. (source wikipedia)

These type of agreements can be in many different forms depending on the industry, the companies involved, and the scope of the work.  Here, is an example contract.

This article from Pragmatic Marketing has a great breakdown of what a NRE is and what it is not.

Elevator Pitch

Elevator Pitch: You’re in the elevator heading up to a sales meeting in a potential clients office when the CEO walks into the elevator… and asks you what you do.  You’ve got 15 floors to explain your company or idea, why you exist, and what value you’re going to bring to their company.  Welcome to the elevator pitch, a succinct 1-2 minute pitch of your idea or business to a potential investor.

This is not an elevator pitch.

Here are some examples of good and bad elevator pitches, via HBR.

So how do you go about building an elevator pitch? Well, this might be a fun place to start, the Harvard Business School Elevator Pitch Builder!

In my experience the best elevator pitches very quickly connect with the person being pitched too by describing the problem to them in a way they can relate to, and then describe why you (or your team) are the best people to solve that problem.  The single best way to get good at pitching?  Practice. Pitch to everyone, and fine tune your pitch along the way.  Think about what you would change if you were going to pitch to an investor vs a potential user vs a potential hire.

Interaction Design – IxD

Interaction Design: (often abbreviated IxD)  Simply put, it is the design of behavior.  Wait, what?

Jon Kolko, the Founder and Director at the Austin Center For Design, describes those who practice Interaction Design in his book “Thoughts on Interaction Design” as follows:

Interaction Designers-whether practicing as Usability Engineers, Visual Interface Designers, or Information Architects-attempt to understand and shape human behavior in order to design products that are at once usable, useful, and desirable. Although the value of design is now recognized as essential to product development, the field is often misunderstood by managers and other team members, who don’t understand a designer’s role in a team. This can cause inefficient and ineffective products.

Wikipedia has a slightly drier definition:

In designhuman–computer interaction, and software developmentinteraction design, often abbreviated IxD, is “about shaping digital things for people’s use”,[1] alternately defined as “the practice of designing interactive digital products, environments, systems, and services.”[2]:xxxi,1 Like many other design fields interaction design also has an interest in form but its main focus is on behavior.[2]:1 What clearly marks interaction design as a design field as opposed to a science or engineering field is that it is synthesis and imagining things as they might be, more so than focusing on how things are.[2]:xviii

To me the word speaks more to the processes that one uses to design behavior, than the design of the behavior itself.  People often make the mistake that design (or interaction design) is something that a few ‘artsy’ people do.  They think that we sit around and ideas simply pop into our heads and we make them.  Instead I believe Interaction Design is a very repeatable set of processes that designers use to solve complex problems in a human-centered way.

Interaction Design is often associated with: HCI – Human Computer Interaction, Design, Development, Industrial Design, Information Architecture, Service Design, and Visual Design.

Vertical – Vertical Market

Vertical:  Loosely I think of this as the niche in which you decide to sell your product or service.  When starting off with a new product or service, defining this niche, or vertical, in which to begin is very important.  The narrower you are, the more targeted you can be in your marketing and advertising strategies, and the quicker you can learn what works and what doesn’t.

vertical market (often referred to simply as a “vertical“) is a group of similar businesses and customers that engage in trade based on specific and specialized needs. Often, participants in a vertical market are very limited to a subset of a larger industry (a niche market). An example of this sort of market is the market for point-of-sale terminals, which are often designed specifically for similar customers and are not available for purchase to the general public. Vertical marketing can be witnessed at trade shows. The opposite of vertical marketing is horizontal marketing.  (source wikipedia)

Here and here are some interesting tips on market penetration and choosing the right (or choosing A) vertical.   I also like this simple breakdown from Investopedia:

A company that manufactures automobile parts would belong to a vertical market. It would have a limited market of - auto manufacturers and mechanics – for its products. A furniture manufacturer, on the other hand, would belong to a horizontal market because its customer base could include homeowners, apartment dwellers, offices, hotels, restaurants and more.

So go get some vert.

B2B – Business to Business

B2B: Stands for Business to Business.  Right, so what does that mean?  If you’re a B2B company it means you’re selling your product or service to other businesses directly, as opposed to selling them to consumers.  Wikipedia has a pretty good rundown of what this means here, and I like this article from TechCrunch on how a lot of startups are (or at least seem to be) having success in the B2B market.

It also almost rhymes with R2D2, but not quite. Petition to rename it B2B2?

Agile

Agile: Agile development get’s a lot of hype in the startup scene… but is often misquoted or misused both in theory and practice.  Thinking of getting into the scene?  Here are 10 books on Agile Software Development.

So what is it? Well, as Wikipedia says:

Agile software development is a group of software development methods based on iterative and incremental development, where requirements and solutions evolve through collaboration between self-organizingcross-functional teams. It promotes adaptive planning, evolutionary development and delivery, a time-boxed iterative approach, and encourages rapid and flexible response to change. It is a conceptual framework that promotes foreseen interactions throughout the development cycle. The Agile Manifesto[1] introduced the term in 2001.

Ok so you’re thinking of going agile, well here are 50 more resources on Agile Development.  Or you could join the Agile Alliance, but I’ll leave that decision up to  you.  Agile Software Development is often looked at as an option in contrast to Waterfall Software Development… so what’s it going to be, Ninja’sor Nature?

Angel Investor

Angel Investor: Ohhh, yeah baby… now we’re getting to the good stuff.  An Angel Investor allows you to quit your day job, and to stop eating Ramen noodles three times a day.  You might even be able to move out of the basement, and into a rad little windowless spot near Applebee’s!

For this definition, we’ll first waltz over the Wall Street Journal since they know a thing or two about ca$h money:

If you’re a cash-strapped entrepreneur looking for an infusion of capital, you may be curious about angel investors. Very few start-ups will receive an investment from an angel—in 2007, fewer than sixty thousand companies received angel funding, a relatively small figure considering more than ten times that many businesses are started each year. But for the right small business, this type of capital can fill the gap between that money you’ve gotten from friends and family and the venture capital that you hope to secure down the road.

So if you’re like me, and you don’t spend your weekends at the yacht club, or chit chatting on the back 9, where on earth do you meet these people?  Well, AngelList might be a good place to start. That is, after all “where startups meet investors”

Check out a few more tips, tricks and resources on Angel Investment herehere, and here.

Burn Rate

Burn Rate: A term often associated with Runway, or… holy #%$! how fast are you spending cash you’re not making back!?

When you start a company, you usually start with some initial capital, be that from your own bank account, a freinds and family round, or even an angel round.  As you develop your business, your product, or your service, you’ll be spending money along the way.  The rate at which you spend that money before making it back off of your product or service is your burn rate.

 The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations. In other words, it’s a measure of negative cash flow.

(source Investopedia)

So how do you control your burn rate?  Well, let me give you a quick racecar analogy:  Often times when people want to make their car faster around a track the first thing they want to do is make the car faster by pimping out the motor.  Wrong.  If you have a limited budget and you want to get around a track faster… invest in brakes.  Stronger brakes means you can carry your speed for longer, you spend less time slowing down, and you can keep your momentum higher.  You will get around the track faster.

So the first thing to do to control your burn rate, isn’t to raise more money… it’s to spend less and to increase the visibility into your spending. Try to keep the momentum, keep it constant – don’t binge and purge.  You’ll be able to better predict how much time you have left on what you have and how to apply that to decisions you have to make!

Check this out for some tips on controlling that burn.

Bootstrapping

Bootstrapping: So you’ve got no cash, but you’ve got an incredible idea and unlimited grit and determination, eh? Well, reach down and grab those… er, bootstraps! (See image above, it’s the small strap that goes around your boot. I personally recommend the Frye Harness Boot. I’ve been wearing mine daily for 8 years.  They’ll get you through this whole startup thing just fine.)

Bootstrapping basically means you’re going to do everything it takes to build and grow your company with the limited resources you’ve got. It’s sort of like the definition of America Culture if you want to get all flag-wavy about it.

I actually like this definition of and reason for Bootsrtapping from readwrite as well:

So, what does it mean to bootstrap a company? Bootstrapping involves launching a business on a low budget. Practically this means that you‚’ll outsource (most likely off-shore) your design and development, you‚’ll rent your servers, you won‚’t have an office and you‚’ll have no salary. Prior to launch, the only expensive professional services which you‚’ll buy will be your legal advice and accountancy services. Everything else, you‚’ll have to pick up yourself and learn as you go along.

Why bootstrap? There are a couple of good reasons a company should consider bootstrapping its market entry. The founders may believe they are onto such a good idea that they don‚’t want to give up any equity. Or the founders have taken on a small amount of seed financing, just enough to get them into the market. Either way, bootstrapping is a viable model.

So since I can’t convince you otherwise – I know your idea is an incredible game-changing-industry-disrupting-savior I’d better at least give you some inspiration and a few tips and tricks on how to bootstrap successfully:

On the inspiration side, check out 37signals, they’re all about the ‘ol bootstrapping, and they even put together this wall of inspiration for you to drool over here. Dig it.

Here’s an old school (2006) post by Guy Kawasaki. Solid little list of things to think about while bootstrapping.

And finally a slightly more recent post on the INC blog aptly titled 7 rules for Bootsrtapping a business.

*Pro tip: When bending over to lift (as in, yourself up with your bootstraps) remember to bend at the knee and lift with your legs, not your back.

A/B Testing

A/B Testing: A/B Testing is sort of like making two versions of the same thing, showing them to different people, and seeing who likes which one best.

As Wikipedia says:

In web development and marketingA/B testing or split testing is an experimental approach to web design (especially user experience design), which aims to identify changes to web pages that increase or maximize an outcome of interest (e.g., click-through rate for a banner advertisment). As the name implies, two versions (A and B) are compared, which are identical except for one variation that might impact a user’s behavior. Version A might be the currently used version, while Version B is modified in some respect. For instance, on an e-commerce website the purchase funnel is typically a good candidate for A/B testing, as even marginal improvements in drop-off rates can represent a significant gain in sales. Significant improvements can be seen through testing elements like copy text, layouts, images and colors.[1]Multivariate testing or bucket testing is similar to A/B testing, but tests more than two different versions at the same time.

While the approach is identical to a between-subjects design, which is commonly used in a variety of research traditions, A/B testing is seen as a significant change in philosophy and business strategy in Silicon Valley.[2][3][4] A/B testing as a philosophy of web development brings the field into line with a broader movement toward evidence-based practice.

This might sound pretty hard to pull off.. as internally you scream “wait you’re telling me to make two websites!!” but there’ are a number of solutions out there that can help you do this.  I like www.optimizely.com They do a fantastic job of making it real easy to set up A/B testing on a number of your websites pages.  Not convinced? Here are 50 reasons to A/B test.

Business Plan

Business Plan:  If you make a plan, you’re much more likely to act on that plan.

A great example of this was seen with the Obama campaign’s work in getting people out to vote for the 2012 election.  Help them make a plan, and they’re much more likely to act on that plan and vote.

I like to think of making a business plan in the same way.  The simple act of making the plan vastly increases the probability that you’ll execute on that plan.  So get the pen out and start planning.

According to Wikipedia:

business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.

Often times it is suggested to write a 3-5 year business plan.  In my experience however, and especially if you’re bootstrapping your startup, be careful not to plan too far ahead.  You need to have an idea of where you want your company to be in 5 years, but don’t spend all your time making uneducated projections.  If you don’t have a single customer, don’t make assumptions about what it will take to get 1 million customers.  The reality is you have no clue.

If you’re in the initial stages, focus more on what it’s going to take to get off the ground, to get the first customers, to get your idea in front of people.  Don’t forget to plan next week before you plan world domination 5 years down the road.

Or as TechCrunch put’s it, Ditch the Biz Plan, Buy a Lottery Ticket

Entrepreneur

Entrepreneur: You. Yup. You’re thinking about it… go ahead, try it on for size, call yourself an entrepreneur.  How does it feel?

I personally like Howard Stevenson’s 1975 definition of Entrepreneurship (via Wikipedia): “the pursuit of opportunity without regard to resources currently controlled.”

A few more good one-liners from that Wikipedia page:

  • 1803: Jean-Baptiste Say: An entrepreneur is an economic agent who unites all means of production- land of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market he pays rent of land, wages to labour, interest on capital and what remains is his profit. He shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.

  • 1934: Schumpeter: Entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services, to set up new products, new services.

  • 1961: David McClleland: An entrepreneur is a person with a high need for achievement [N-Ach]. He is energetic and a moderate risk taker.

  • 1964: Peter Drucker: An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource.

  • 1971: Kilby: Emphasizes the role of an imitator entrepreneur who does not innovate but imitates technologies innovated by others. Are very important in developing economies.

  • 1975: Albert Shapero: Entrepreneurs take initiative, accept risk of failure and have an internal locus of control.

  • 1975: Howard Stevenson: Entrepreneurship is “the pursuit of opportunity without regard to resources currently controlled.”[1]

  • 1983: G. Pinchot: Intrapreneur is an entrepreneur within an already established organization.[note 1]

  • 1985: W.B. Gartner: Entrepreneur is a person who started a new business where there was none before.[2]

People often talk about the Entrepreneurial spirit, and argue about whether or not Entrepreneurs are‘born’ or ‘made’.  I think it has more to do with how you see yourself.  Are you going to follow your dream, or work on someone else’s?

To me this embodies both entrepreneurship, and the entrepreneurial spirit: Caine’s Arcade

So, are you an entrepreneur?

*Pro Tip: Close your eyes and spell the title of this post.  If you can’t, please re-read this post.

Crowdfunding

Crowdfunding: You’re not just raising money, you’re building an audience by leveraging your social capital.

Wikipedia says Crowdfunding is:

the collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations.[1][2] Crowd funding is used in support of a wide variety of activities, including disaster reliefcitizen journalism, support of artists by fans, political campaigns, startup company funding,[3] movie[4] or free software development, inventions development and scientific research.[5]

What I love about the recent explosion in crowd funding is the incredible diversity of successful types of projects that truly showcase the depth and breadth in which crowdfunding can be applied.

The Oatmeal’s plea to save Tesla’s labratory, raising $1.7 million in 6 weeks.

Caine’s Arcade Scholarship Fund.  A guy makes a great movie about an incredible kid, then crowdfunds his college tuition for him.

Or what would happen if you raised cash with your neighbors to fix the potholes on your block and to put in a new park? That’s the thinking behind crowdfunding urban planning.

Two of the biggest and most popular crowdfunding platforms are kickstarter and indigogo.  They have a lot in common, but there’s one large difference.  When you set up a funding campaign both companies require you to put in a funding goal.  On Kickstarter, if you don’t reach your goal in the allotted time, then you don’t get any of the funding.  On Indigogo, you receive any and all funding, no matter if you reach your goal or not.

So, what are you raising money for?

Disruption

Disruption: Don’t use this word before your company does it.  It’s annoying and pretentious. However, if you are one of the co-founders of airbnb feel free to use it as much as you would like.

The word is often associated with “Disruptive Innovation” which means: (source Wikipedia)

disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market.

Airbnb is one company that truly disrupted a market, that market being the stagnant hotel industry.  Uber is another good example, taking on the embedded and old school world of the taxi cab.  This type of disruption often encounters resistance along the way as those involved in the old model often attempt to fight innovation with legislation. Truly disruptive companies fight back.

Via (Sparknlaunch): The term ‘disruptive technologies’ was coined by Clayton M. Christensen and articulated in his book The Innovator’s Dilemma.

And for one of the best breakdowns, check out this blog post by Disrupt This explaining and defining disruption…

A pet peeve of mine is how many people misuse the term Disruptive Innovation. Many of those who do seem not to have read Christensen‘s books or if they did, had no idea about the significance of the theory and its application to business (i.e. why the definition matters).

*Pro Tip: This is a buzzword.  Use it too often for your ‘idea’ and you’ll get slapped.