If you are starting up or trying to learn more about startups, you should know the below terms:
1. ARPU
ARPU known as Average Revenue Per Unit is the measure of the revenue generated from per unit or per user.
It is calculated as total revenue generated, divided by total number of units or users or subscribers
2. AOV
Average Order Value (AOV) is the average value generated from each order.
Formula for AOV = Total Revenue / Total Orders
3. CAC
Customer Acquisition Cost (CAC) is the cost incurred to acquire a new customer
Formula for CAC – Total Spends / Total No of Customers
4. Churn Rate
Churn Rate is the rate at which the customers stop doing business with an organisation. It is the percentage of users who discontinue their subscriptions within a given time frame.
5. MVP
Minimum Viable Product (MVP), is a concept from Lean Startup, that focuses on building a product with enough features to validate your idea.
With the help of MVP, businesses can get feedback as quickly as possible and iterate the product. Most of the startups build MVP to validate their product.
