Key terms

The purchase of a company, or a controlling stake in it, by another company. For founders the price matters less than the structure: the preference stack, earn-outs, retention terms and what happens to the team and the product.

Average daily rate: room revenue divided by the number of rooms sold, so the average price a guest pays for one night in an occupied room. Empty rooms do not count. ADR multiplied by occupancy gives RevPAR. Sources for Vienna differ in sample and definition: about 123 euro for 2025 (CBRE) against 114 euro in August 2026 (STR, quoted by WKO Wien), so always name the source.

The effectuation principle of deciding how much you are willing and able to lose on the next step, rather than how much you expect to gain (Sarasvathy 2001). It caps the downside of a venture in money, time and reputation while the upside is still unknown.

The yearly value of all active subscription contracts, excluding one-time fees. It is the headline growth figure for subscription businesses and equals twelve times the monthly recurring revenue.

A hotel whose rooms are apartments with a kitchen or kitchenette, run with hotel services such as digital check-in and cleaning and usually booked for several nights. Operators such as Limehome and Numa work this way and often convert office or commercial buildings, which makes rent the largest fixed cost. In the simulation, Hausnummer is an aparthotel operator.

A statement in the business model that the team believes but has not yet tested with customers. In this course it is marked [N] on the canvas; the riskiest assumptions are tested first, because a model is only as strong as its weakest untested belief.

Total revenue divided by the number of orders in a period. For a direct-to-consumer brand it decides whether shipping, returns and acquisition costs can be covered by a single purchase.

The effectuation principle of starting with the means at hand: who you are, what you know and whom you know (Sarasvathy 2001). The first customers and partners usually come from that existing network, not from a market study.

Building a company from founder savings and customer revenue instead of outside investment. It keeps ownership and control with the founders and forces early revenue, at the price of slower growth and a smaller margin for error.

The feedback loop at the center of the lean startup method (Ries 2011): build the smallest thing that tests a hypothesis, measure how customers respond, and learn whether to pivot or persevere. The goal is to shorten the loop, not to build faster.

The amount of cash a company spends per month. Gross burn is total monthly spending; net burn is spending minus incoming cash, and net burn is the figure that determines the runway.

A private individual who invests their own money in an early-stage company in exchange for equity, often alongside advice and contacts. Angels typically invest before venture capital funds do and in smaller amounts.

Osterwalder and Pigneur's (2010) template of nine building blocks that describe how an organization creates, delivers and captures value: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure.

Selling to private individuals rather than to organizations. Purchases are smaller and faster than in business-to-business sales, so reach and acquisition cost dominate the economics.

The paths through which a venture reaches, sells to and serves its customers, such as founder-led sales, partners, marketplaces or paid ads. Early on, a channel is an assumption like any other; it becomes an asset once it delivers customers repeatably at a known cost.

The initial period of a vesting schedule during which no shares vest at all; at its end, the whole period vests at once. With a one-year cliff, a founder who leaves after eight months keeps no vested shares.

A written agreement among founders on equity, vesting, roles, decision rights, time commitment and what happens when someone leaves. Its value lies in settling these questions while everyone still agrees, before a conflict makes them hard.

The fee a platform charges a hotel for each booking, as a percentage of the room price. Contract rates are rarely published; vendor sources name 10 to 25 percent for Booking.com and 3 to 5 percentage points more for a preferred partner programme, both unconfirmed. Worked example, not a measured price: 2.3 nights at 123 euro with 15 percent commission cost the hotel about 42 euro.

The shared assumptions that shape how people in a company decide and behave when no rule applies (Schein 2010). In a startup it forms early and is set by what founders do, reward and tolerate, far more than by written values.

An MVP in which the founders deliver the service by hand to a few early customers, openly and without automation. Ries (2011) describes the approach with the example of Food on the Table; it tests whether customers value the outcome before any software is built.

The price of a unit minus its variable costs, meaning the amount each sale contributes toward fixed costs and profit. Fixed costs such as rent are not subtracted per unit, which is what distinguishes it from net profit.

The share of people at one step of a funnel who take the next step, for example visitors who buy or free users who start paying. It is only comparable between channels and periods when the steps are defined the same way.

The direct costs of producing the goods or services sold in a period, such as materials, production and direct labor. Revenue minus the cost of goods sold gives the gross margin.

The canvas field for the main costs of running the business, split into fixed costs such as salaries and rent and variable costs that grow with each unit sold. Together with the revenue streams it shows how far the venture is from breaking even.

The total cost of winning one new customer: all sales and marketing spend in a period, including ads, agency fees and sales salaries, divided by the number of customers won in that period. Leaving costs out makes a channel look cheaper than it is.

The practice and the software for tracking every contact, deal and conversation with customers in one place. For a small team it turns founder-led sales into a pipeline that others can see, measure and take over.

A group of customers who share the same problem, context and buying behavior, and who can be reached in the same way. The Lean Canvas and the Business Model Canvas both start from segments, because a value proposition is only strong for someone in particular.

An early customer who agrees to work closely with the founders while the product is shaped, giving access, feedback and often a paid pilot in exchange for influence and early terms. A design partner is a source of evidence, not a guarantee of a market.

The reduction of existing shareholders' percentage ownership when new shares are issued, for example in a financing round or an employee option pool. Rounds compound: selling 20 percent and later 25 percent leaves founders with 60 percent, not 55.

A model in which a brand sells to end customers through its own channels, such as a web shop, instead of through retailers. It keeps the margin and the customer data but makes the brand pay for acquisition, shipping and returns itself.

A large platform that the European Commission has designated under the Digital Markets Act and that must follow extra rules. Booking.com has been a gatekeeper since 13 May 2024 and had to drop parity clauses for partners in the European Economic Area from 2 December 2024. Article 5(3) also bars substitutes such as raising the commission or delisting hotels that price lower elsewhere.

A customer in the segment who has the problem, knows it, is already looking for a solution, has built a workaround and has budget to pay (after Blank 2005). Early adopters accept an unfinished product because the pain is acute, which makes them the right first customers for an MVP.

The part of a purchase price that the buyer pays later and only if the acquired company reaches agreed targets. It shifts risk to the sellers. Marriott's purchase of citizenM combined 355 million US dollars upfront with up to 110 million US dollars of earn-out. When you weigh a takeover offer, ask which share of the price is certain.

A logic of entrepreneurial action described by Sarasvathy (2001): instead of predicting a market and planning backwards from a goal, founders start from the means they already have and let goals emerge through commitments with partners. Its principles include the bird-in-hand, affordable loss, crazy quilt, lemonade and pilot-in-the-plane.

A pool of options that gives employees the right to buy shares later at a fixed price. It lets a startup share future upside with people it cannot yet pay market salaries, and it dilutes existing shareholders when it is created.

A way of working under uncertainty that treats plans as hypotheses, acts in small affordable steps and learns from customers faster than from analysis. It is a habit that can be practiced, not a personality trait a founder either has or lacks.

How ownership is divided among the founders. Wasserman (2012) shows that quick, equal splits made before roles and contributions are clear are a frequent source of later conflict; a split tied to vesting can be revisited as contributions become visible.

Observed customer behavior or a commitment that supports or refutes an assumption, such as a documented past action, a signed pilot or a payment. In this course it is marked [E] on the canvas and must name its source; an opinion or a compliment is not evidence.

This course's ranking of how much a signal is worth: compliments and opinions at the bottom, then stories of specific past behavior, then commitments of time or reputation, then money such as pre-orders or paid pilots at the top. It follows Fitzpatrick's (2013) point that commitment and advancement, not praise, show real interest.

The event through which founders and investors turn their shares into cash, typically an acquisition, a secondary sale of shares or an initial public offering. Liquidation preferences and the cap table decide how the price is split, so the headline number says little about what each person receives.

Porter's framework for the structure of an industry: rivalry among existing competitors, the threat of new entrants, the threat of substitutes and the bargaining power of buyers and of suppliers (Porter 2008). Together they explain how much of the value created in a market a company can keep.

The Austrian flexible company (Flexible Kapitalgesellschaft), a form of limited liability company in force since 1 January 2024 (FlexKapGG). Its main difference from a GmbH is that it can issue Unternehmenswert-Anteile to employees, and shares can be transferred without a notarial deed in more cases. Check the paragraph in the RIS legal database before you rely on a detail.

Wasserman's (2012) observation that founders often have to choose between being rich and being king: outside capital and experienced hires can increase the value of the company while reducing the founder's control over it.

A pricing model in which a basic version is free and customers pay for advanced features, capacity or support. It lowers the barrier to trying the product but only works when enough free users convert to paying ones and serving the free tier stays cheap.

A unit that converts working time into full-time positions: two people working half time count as one. It makes headcount comparable when a startup mixes founders, part-timers and freelancers.

The EU regulation (EU) 2016/679 that governs how personal data is collected, processed and stored, applicable since May 2018. For a startup it shapes product design, vendor choice and contracts from the first customer onward.

A precise description of the organization or person who gets the most value from the product and is cheapest to win and keep. In B2B sales it narrows a broad segment to the accounts a small team should approach first.

The first sale of a company's shares to the public on a stock exchange. It is one possible exit, rare for young ventures and bound to extensive disclosure requirements.

The view that customers hire a product to make progress in a particular circumstance, and fire it when something serves that job better (Christensen et al. 2016). Framing demand as a job reveals competitors and alternatives that a product category or a demographic profile hides.

The Lean Canvas field for the few numbers that show whether the business is working, for example activation, retention or revenue per customer (Maurya 2012). Good key metrics change a decision when they move; vanity metrics only look good.

The exposure a company carries when critical knowledge, relationships or skills sit with a single person. It is reduced by documentation, shared ownership of systems and customer relationships, and succession plans, not by retention bonuses alone.

A demand test in which a page describes the offer and asks visitors for a concrete step, such as leaving an email address or placing a pre-order, before the product exists. It measures behavior at the top of the evidence ladder only when visitors commit something.

A one-page business model by Maurya (2012), adapted from the Business Model Canvas for early-stage ventures. Its nine fields are Problem, Customer Segments, Unique Value Proposition, Solution, Channels, Revenue Streams, Cost Structure, Key Metrics and Unfair Advantage; every entry starts as an assumption to be tested.

The part of a shareholder or co-founder agreement that sets what happens to a departing founder's shares. Good leaver terms, for example after illness, usually allow a fair buyback of vested shares; bad leaver terms, for example after a breach, can force a sale at a low price.

A document in which a buyer sets out the proposed price and main terms of an acquisition before due diligence and final contracts. Like a term sheet it is mostly non-binding, but exclusivity clauses in it often are binding.

The contribution a customer is expected to generate over the whole relationship, usually average revenue per period times gross or contribution margin times the expected number of periods. Also called customer lifetime value; it is only meaningful once retention has been observed, not assumed.

A term that gives investors the right to be paid back before common shareholders when the company is sold or wound up. A 1x preference returns the amount invested first; a 2x preference returns twice that amount, which in a modest sale can leave founders and employees with little or nothing.

The smallest experiment that lets a team collect validated learning about customers with the least effort (Ries 2011). An MVP is a learning tool, not a small version of the final product: it can be a landing page, a concierge service or a prototype.

Fitzpatrick's (2013) rules for customer conversations that even your mother cannot lie to you about: talk about their life instead of your idea, ask about specifics in the past instead of opinions about the future, and talk less while listening more. Compliments, hypotheticals and feature wishes are treated as noise.

The monthly value of all active subscriptions. Tracking how it changes through new customers, upgrades, downgrades and cancellations shows where growth comes from and where it leaks.

A survey metric that asks how likely customers are to recommend the product on a scale from 0 to 10 and subtracts the share of detractors from the share of promoters. It is a signal of loyalty, not proof of it, and is weak evidence compared with repeat purchases.

The recurring revenue a group of existing customers generates today as a share of what they generated a year earlier, including upgrades, downgrades and cancellations. Above 100 percent, the existing base grows even without new customers.

A liquidation preference that lets investors choose: either their money back first, or their ordinary share of the proceeds, not both. A participating preference pays both and costs founders more. In Orrick's European deals of 2025, 77 percent used a 1x non-participating preference and fewer than 1 percent a participating one; the sample is Orrick's own mandates.

Objectives and Key Results: a goal-setting system in which a qualitative objective states what to achieve and two to five measurable key results state how progress will be judged (Doerr 2018). Key results measure outcomes, not tasks, and are reviewed on a fixed rhythm, usually quarterly.

A delivery metric: the share of orders or service jobs completed at the promised time and in the promised scope. For a service business it is a direct measure of whether the operation keeps what sales promises.

Vienna's city tax on overnight stays, charged as a percentage of the net accommodation price. The rate was 3.2 percent until June 2026 and has been 5 percent since July 2026. A step to 8 percent is planned for July 2027, when a flat deduction of 11 percent from the tax base also falls away. Hotels and the city dispute the 2027 step and the final decision is unconfirmed (WKO Wien, Forvis Mazars).

Online travel agency: a platform such as Booking.com or Expedia that lists hotels and charges a commission on every booking it brings. The guest finds the hotel on the platform and the booking relationship sits with the platform. In Austria, about 26 percent of hotel nights are booked through OTAs and about 60 percent directly (HOTREC 2025). In the simulation, Bookora plays this role.

A contract term that forbids a hotel to offer a lower price on its own website or anywhere else than on the platform. Austria declared such best-price clauses void in 2016 (UWG and PrAG amendment), and the EU Court of Justice ruled in 2024 (case C-264/23) that parity clauses breach EU competition law. Hotels may therefore give direct bookers a better price.

The decision to keep the current strategy because the evidence shows it is working or improving (Ries 2011). Persevering is only a decision if it follows a review of the data; continuing by default is drift.

A structured course correction designed to test a new fundamental hypothesis about the product, the customer or the business model (Ries 2011). A pivot keeps what the team has learned and changes one element of the model, which distinguishes it from simply starting over.

A structured review after a failure, a stop or a major decision that asks what the team believed, what evidence it had and what it would test sooner next time. A useful post-mortem looks for causes in assumptions and decisions, not for someone to blame.

Spending on growth, such as hiring, marketing or new markets, before the model is proven with retained, profitable customers. It multiplies an unproven model and shortens the runway at the moment the team still needs time to learn.

The Lean Canvas field for the top one to three problems of the customer segment, together with the existing alternatives customers use today (Maurya 2012). It is filled in first, with the customer segments, because every other field depends on it.

An early customer interview that tests whether the problems on the canvas are real, how customers rank them and how they solve them today, before any solution is shown (Maurya 2012). Its output is a ranked problem list and a sharper customer segment, not a sale.

The state in which a product satisfies a clearly defined market strongly enough that customers buy, return and recommend it with little pushing. Andreessen (2007) described it as being in a good market with a product that can satisfy that market; everything before it is search, everything after it is scaling.

The Lean Canvas and Business Model Canvas field for how the venture earns money: the pricing model, who pays and how often. Maurya (2012) argues for charging early, because a price is itself a test of the value proposition.

Revenue per available room: room revenue divided by all rooms a hotel could have sold, occupied or not. It equals ADR multiplied by occupancy, so it shows in one number whether a hotel fills its rooms at a good price. For Vienna, CBRE reports about 87 euro for 2025 and STR reports a fall of 2.1 percent for January to August 2026; estimates differ by source.

The number of months a company can operate before its cash runs out, calculated as cash in the bank divided by net burn. Fundraising takes months, so the practical runway ends well before the last euro is spent.

Growing revenue and reach faster than costs and headcount, usually by repeating a model that already works. Scaling multiplies what exists, including its flaws, so it belongs after product-market fit, not before it.

An investment instrument in which an investor pays now and receives shares later, usually at the next priced round, often with a valuation cap or a discount. It defers the valuation question but not the dilution.

A checklist for goals that are Specific, Measurable, Achievable, Relevant and Time-bound, going back to Doran (1981). It sharpens a single goal; OKRs add the link between an ambitious objective and the results that measure it.

Software delivered over the internet on a subscription instead of being installed and bought once. Its economics turn on recurring revenue and retention, because acquisition costs are paid up front and earned back month by month.

The Lean Canvas field for the simplest features that address each listed problem (Maurya 2012). It is kept deliberately small, because a solution is the part of the model most likely to change once customers use it.

Continuing a course of action because of what has already been invested rather than because of what it will return (Arkes and Blumer 1985). Money and years already spent are gone either way; a pivot or stop decision should weigh only future costs and benefits.

A short document that sets out the main terms of an investment before the binding contracts are drafted: amount, valuation, liquidation preference, board seats and control rights. Most of it is not legally binding, but the terms it fixes are hard to reopen later.

The Lean Canvas field for something that cannot be easily copied or bought, such as exclusive access, a community, insider knowledge or network effects (Maurya 2012). Hard work, a good team or a lower price rarely qualify, because a competitor can match them.

The single, clear message that states why a specific customer segment should choose this product over any alternative (Maurya 2012). A strong one names the outcome the customer gets, not the features or the technology behind it.

Revenue and costs expressed per unit, such as per customer, per order or per service visit. The key comparison is lifetime value against customer acquisition cost: if a customer costs more to win than they ever pay back, growth deepens the loss.

Employee value shares of a FlexCo: they give a claim on the company's value but no voting rights, and together they may make up less than 25 percent of the share capital. Under section 67a of the Income Tax Act, 75 percent of the gain is taxed at a flat 27.5 percent if the employee stayed at least two years and three years have passed since the grant. Limits: at most 100 employees, turnover of at most 40 million euro, company founded at most ten years ago.

The price put on a company in a financing round. The pre-money valuation is the value before the new investment, the post-money valuation adds the new money, and the investor's share equals the investment divided by the post-money valuation.

Professional funds that invest other people's money in young, high-risk companies in exchange for equity. Because a few very large exits must pay for many failures, venture capital fits businesses that can grow very large, not every good business.

A schedule under which founders and employees earn their shares over time instead of owning them all on day one. A common convention is four years with a one-year cliff; unvested shares return to the company if the person leaves early.

A product or service that one company builds and another sells under its own brand. A start-up can license its software as white label to a hotel group: revenue is safer, but the customer relationship stays with the licensee and the partner can end the contract. Expedia sells a white label template to airlines, banks and retailers; its B2B revenue was about 4.1 billion US dollars in 2024.

The highest price a customer would accept for a product. Stated willingness in a survey is weak evidence; a signed order or a paid pilot at a given price is strong evidence.

Writing a belief into the business model as if it were a fact, for example an unmarked canvas entry that no customer has confirmed. It is the failure the evidence and assumption markers exist to prevent, because an untested belief that looks like evidence is never tested.