DISRUPT HQ: 26 app and e-commerce terms every startup investor and founder should know

Disrupt HQ is a comprehensive ten-part series designed to give Australia’s new generation of innovators the advice and guidance they need to successfully grow their business. Proudly sponsored by Braintree, which has been powering payments and helping thousands of next gen businesses like Uber, Airbnb, and Github grow from their first dollar.
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Websites and apps have become the foundation of all 21st century businesses, no matter how analog they may seem. Knowing what goes into their creation and maintenance, then, isn’t just important when interacting with a developer. It is an integral part of every businessperson’s toolkit.

Here, then, are 25 terms everyone in business should know to help you compete – and have more effective meetings.

1) API

API stands for Application Programming Interface. You see this term dotted, essentially referring to a set of rules — functions and protocols, set out by developers of an app or service, allowing other developers to create apps or services that can interact with it.

2) Front end

The front end is the part of the website or service that can be seen by users. For websites, this is often written in HTML and CSS.

3) Back end

The back end is the part of the website or service that makes the whole thing work, including the servers, databases and applications. The coding languages of the bank end are often completely different to the front end.

4) Framework

A framework is essentially the skeleton an application. Generally a collection of components that guide the building of an application or service.

5) Native app

A native app is something that has been made specifically for a certain platform — an app that has been made specifically for ios or Android for example, using the languages native to that platform, rather than being ported over from another platform.

6) Hybrid app

A hybrid app is one built using a combination of languages, often a web app that has been wrapped in the language of the platform it is being used on. An app that has been written in HTML5 and then contained in Swift to be used on iOS, for example.

7) Web app

A web app combines the functionality of a website and an app. There’ no need for it to be “installed” through a store, but can be launched from the home screen, has an app’s usability and can interact with some of the phones functions like notifications.

8) UX

UX stands for user experience, and is specialised skill apart from front and back end development. Good UX provides for a functional, useable and pleasurable experience between the user and the app or service. Bad UX does the opposite, potentially sinking the venture entirely.

9) User flow

User flow describes the journey a user takes through an app or service, from one action to another. On an ecommerce site, for example, it could show the journey from landing on the site through purchase.

10) User persona

A user persona is an imaginary person, held in mind as an app or service is being created. Essentially, the user persona is the target audience, it’s the person who would want to use the service and has to be accommodated for.

11) Engagement

Engagement is linked to both user flow and user persona, and is the response or connection the user has to the various aspects of the app or service. Often, testing will be carried out to find the right combination of look and features to maximise engagement.

12) Turnkey

Turnkey describes an app or service that works “out of the box”. When it comes to software, it often refers to something that can be set up quickly to fill a whole, or to get a venture underway quickly.

13) A/B Test

An A/B test presents potential users with multiple versions of an app or service, used to gauge response and find an optimal solution.

14) Conversion

Conversion is a metric showing how many potential customers have been turned into actual customers. For many companies, conversion is the most important and most watched metric, the one all other actions are informed by.

15) Click through rate

The Click Through Rate or CTR is a measure of the amount of people who have clicked through a link. This could be from a landing page, an advertisement or through an email marketing campaign. Similar to conversion, CTR can be key to the viability of an online business, and a lot of energy is often expended improving it.

16) Bounce rate

The bounce rate is the percentage of visitors who land on a website or page, and then leave quickly. Often considered part of a measure of engagement, a high bounce rate often means the application or service isn’t optimised to convert customers.

17) Average order value

The average order value reveals the average amount spent each time a customer places an order. It can be worked out quickly by dividing revenue by the amount of orders. AOV is an important benchmark, and can be helpful in working out strategies like pricing and what goods/services to serve.

18) Average time on site

Closely related to bounce rate in evaluating engagement and optimisation, the average time on site tells you how long visitors are spending across your website. How big this number should be varies depending on the type of site you are running, but whatever the number it can be a good proxy for how deep your engagement runs.

19) Cart abandonment rate

The cart abandonment rate is a ratio, the number of shopping carts that have been abandoned over the total number initiated. A very high rate can reveal a number of issues, including a complicated checkout process or unsatisfactory payment options.

20) Cohort analysis

Cohort analysis is related to user flow and persona. Rather than evaluating the experience of one user on a site, however, cohort analysis considers a group that shares a common characteristic — gender or age for example. Cohort analysis can be a useful tool for optimising your service for a specific group, especially if they are particularly valuable or underrepresented.

21) Customer lifetime value

Customer lifetime value isn’t a digitally native metric, but it has never been more important. It predicts the value of the entire future relationship between vendor and customer. Especially for a company selling goods and services that are bought repeatedly, lifetime value can be of more consequence than the revenue from a single purchase.

22) Cross selling

Cross selling is when companies sell an additional product or service to customer. These can be either tangential or unrelated to the initial purchase. Online merchants, with large data sets and customer histories, are often very well primed to know the best products to suggest to an existing customer.

23) Up-selling

Similar to cross selling, up-selling is where a vendor encourages customers to upgrade purchases to something more expensive, or by including an add-on. Up-selling can be significant drivers of profitability, increasing the value of every customer conversion.

24) Data architecture

Data architecture concerns the policies and standards around the data collected when using an application or service. It can include everything from how data is collected, to how it is stored and utilised.

25) Address verification system

An address verification system is used to verify that the address entered by a potential customer, matches the billing address of the person owning the credit card. As the theft and sale of credit card details booms, an AVS is an integral tool in fighting fraud.

26) Tokenisation

A technology that enables a token to replace a credit card number in an electronic transaction. This token or reference number prevents the theft of a credit card number during electronic transmission and storage of a transaction. Since the reference number can’t be used for transaction or fraudulent charges, there is little risk even if it’s stolen.

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