Glossary — The Personal MBA
Key terms with one-line definitions and the chapter that introduces them.
Absence Blindness — We can't perceive what isn't there, so prevention and "doing nothing" go unrewarded; beat it with checklists (Ch 7).
Accumulation — Small helpful or harmful inputs compound over time into huge results (Ch 5).
Addressability — How easily you can reach people who might want your offer (Ch 3).
Akrasia / Conflict — Two control systems fighting over the same perception (work vs. rest = procrastination) (Ch 7, Ch 8).
Allowable Acquisition Cost (AAC) — The maximum you can spend to acquire a new customer; the marketing slice of Lifetime Value (Ch 6).
Amortization — Spreading the cost of a large resource investment across its useful life (Ch 6).
Amplification — A small change to a scalable system produces a huge result (Ch 5).
Analytical Honesty — Measuring data dispassionately, resisting the pull to make things look better (Ch 11).
Association — The mind links co-occurring things even when illogical (Coke = happiness) (Ch 7).
Attention — The scarce, rationed resource every offer competes for (Ch 3).
Attribution Error — When others fail we blame their character; when we fail we blame circumstances (Ch 9).
Authority — People comply with authority figures even against their own judgment (Milgram) (Ch 9).
Autocatalysis — A self-reinforcing loop whose output feeds the next cycle (network effects) (Ch 10).
Barrier to Competition — Every Value Stream improvement makes you harder to replicate (Ch 5).
Barriers to Purchase — The five standard objections blocking a sale: too expensive, won't work, won't work for me, can wait, too hard (Ch 4).
Breakeven — The point where cumulative revenue exceeds cumulative expenses (Ch 6).
Buffer — A third party (agent, broker) empowered to negotiate for you (Ch 4).
Bundling / Unbundling — Combine offers to raise perceived value, or split one into many to open new sales (Ch 2).
Bystander Apathy — More people who could act means fewer who actually act (Ch 9).
Call-to-Action (CTA) — Directing a prospect to one single, obvious next action (Ch 3).
Caveman Syndrome — We run demanding modern life on survival-tuned biology (Ch 7).
Cessation — Intentionally stopping something counterproductive; often the better move (Ch 12).
Checklist — An externalized, predefined SOP for a specific task (Ch 12).
Clanning — Humans automatically form in-groups and out-groups (Ch 9).
Cognitive Scope Limitation — Past ~150 people (Dunbar's number) we treat people as statistics (Ch 7).
Cognitive Switching Penalty — Every attention shift forces the brain to reload context — a Friction cost (Ch 8).
Commander's Intent — Tell people why a task matters, not just how, so they adapt when circumstances change (Ch 9).
Common Ground — The overlap between your options and the prospect's; a precondition for a deal (Ch 4).
Communication Overhead — Time spent communicating instead of producing; grows with team size — keep teams 3–8 (Ch 9).
Comparative Advantage — Capitalize on your strengths; specialize and trade rather than do everything (Ch 8, Ch 9).
Constraint (Theory of Constraints) — One critical input limits the whole system; fix it and Throughput rises (Ch 10).
Context — Related measurements used to interpret data; numbers in isolation say little (Ch 11).
Contrast — We judge by comparison to what's present, not what's absent (pricing camouflage) (Ch 7).
Convergence and Divergence — Group members grow alike; rival groups grow apart (Ch 9).
Core Human Drives — Five drives shaping buying: Acquire, Bond, Learn, Defend, Feel (Ch 2).
Correlation and Causation — Moving together (correlation) is not a repeatable cause-effect chain (causation) (Ch 11).
Counterparty Risk — The risk that a partner won't deliver, damaging your Reputation (Ch 5, Ch 10).
Critical Few (Pareto / 80-20) — ~20% of inputs produce ~80% of outputs (Ch 12).
Critically Important Assumptions (CIAs) — Facts that must be true for the offer to succeed (Ch 2).
Damaging Admission — Volunteering a real drawback, which counterintuitively raises Trust (Ch 4).
Deconstruction — Break a system into the smallest subsystems, understand each, rebuild (Ch 11).
Decision — Committing to one path by cutting off others; decide at 40–70% of information (Ch 8).
Desire — The visceral wanting marketing connects to; you can't manufacture it, only tap it (Ch 3).
Diminishing Returns — Past a point, more of a good thing is detrimental (the "85% Solution") (Ch 12).
Distribution Channel — How value reaches the user: direct (control, capped) or intermediary (reach, less control) (Ch 5).
Duplication — Reliably reproducing something of value; near-free for information (Ch 5).
Economically Valuable Skills — Only skills tied to the Five Parts get paid (Ch 2).
Education-Based Selling — Make prospects better-informed customers; builds Trust and willingness to pay (Ch 4).
End Result — The experience/emotion the prospect wants ("holes, not drills") (Ch 3).
Energy Cycles — Circadian and ~90-min ultradian rhythms; maximize peaks, rest on downswings (Ch 8).
Environment / Guiding Structure — The structure around you is the biggest determinant of behavior (Ch 7, Ch 10).
Expectation Effect — Quality = Performance − Expectations (Ch 5).
Experimental Mindset — Constant experimentation as the only reliable way to learn (Ch 12).
Externalization — Converting internal thoughts into written/spoken form to reprocess them (Ch 8).
Fail-safe — A backup built before it's needed, kept separate from the system it protects (Ch 12).
Feedback — Real-prospect signal sought via open questions; a preorder is the strongest (Ch 2).
Feedback Loop — When a system's output becomes the next cycle's input (Ch 10).
Five Parts of Every Business — Value Creation → Marketing → Sales → Value Delivery → Finance (Ch 1, Ch 2).
Five-Fold Why / How — Repeated "why" to find what you truly want; repeated "how" to reach action (Ch 8).
Fixed vs Variable Costs — Fixed are incurred regardless of output; variable scale with output (Ch 6).
Flow / Stock / Slack — Movements of resources (flows), pools that accumulate (stocks), and how much sits there (slack) (Ch 10).
Force Multiplier — A tool that multiplies force, thought, or attention; the only good use of debt (Ch 5).
Four Methods to Increase Revenue — More customers, bigger transactions, more frequency, higher prices (Ch 6).
Four Pricing Methods — Replacement Cost, Market Comparison, Discounted Cash Flow/NPV, Value Comparison (Ch 4).
Framing — Emphasizing some details, de-emphasizing others; inevitable, not lying (Ch 3).
Free — Giving genuine value away to win Attention fast (Ch 3).
Friction — Any force that removes energy from a system over time (Ch 12).
Gall's Law — Every working complex system evolved from a working simple one (Ch 10).
Garbage In, Garbage Out — Bad input always yields useless output (Ch 11).
Golden Trifecta — Treat everyone with appreciation, courtesy, and respect (Ch 9).
Habits — Regular supportive actions; install one at a time via triggers (Ch 8).
Hierarchy of Funding — Financing ladder from cheapest/most-control to costliest/least-control (Ch 6).
Hook — A single phrase conveying the offer's primary benefit ("1,000 songs in your pocket") (Ch 3).
Humanization — Using data to tell a real person's story, often via personas (Ch 11).
Importance — Everyone craves feeling Important; listening makes it happen (Ch 9).
Inhibition — The forebrain's ability to override instinct ("free won't"); fueled by Willpower (Ch 7).
Internal Controls — Standard procedures keeping finances accurate and protected (Ch 6).
Interdependence — Reliance of one system on others; tightly vs. loosely coupled (Ch 10).
Iron Law of the Market — Market size and quality cap every business (Ch 2).
Iteration Cycle (WIGWAM) — Watch, Ideate, Guess, Which?, Act, Measure (Ch 2).
Iteration Velocity — Speed through cycles; more at-bats beats one big bet (Ch 2).
Key Performance Indicator (KPI) — The few measurements of a system's critical parts (Ch 11).
Leverage — Borrowed money that magnifies gains and losses alike (Ch 6).
Lifetime Value — Total value of a customer over the whole relationship (Ch 6).
Locus of Control — Separate what you can control/influence from what you can't (Ch 8).
Loss Aversion — Losses feel ~2× as strong as equivalent gains (Ch 7).
Management — Coordinating a group toward a Goal amid Change and Uncertainty (Ch 9).
Mean / Median / Mode / Midrange — Four measures of typicality (Ch 11).
Mental Simulation — Imagining an action's result before acting; needs a "point B" Goal (Ch 7).
Middle Path — The shifting balance between too little and too much (Ch 12).
Minimum Economically Viable Offer (MEVO) — The smallest offer that produces an actual sale (Ch 2).
Monoidealism — The flow state of focusing all attention on one thing (Ch 8).
Most Important Tasks (MITs) — The 2–3 critical tasks that drive your results (Ch 8).
Motivation — An emotion linking feeling to action; "move away" beats "move toward" by default (Ch 7).
Narrative — A story (often Hero's Journey) that makes the customer the hero (Ch 3).
Next Action — The next concrete physical step to move a project forward (Ch 8).
Next Best Alternative — What each party does with no deal; power lies with who can walk away (Ch 4).
Normal Accidents — In tightly coupled systems, failure is "when," not "if" (Ch 10).
Norms — Historical measurements used as Context for current ones (Ch 11).
Novelty — New sensory data is required to hold Attention (Ch 7).
Onion Brain — Hindbrain (survival) → midbrain (emotion) → forebrain (logic) (Ch 7).
Option Orientation — When something goes wrong, focus on options, not the problem (Ch 9).
Overhead — Minimum ongoing resources to keep operating regardless of sales (Ch 6).
Paradox of Automation — The more efficient the automation, the more crucial its human operators (Ch 12).
Pattern Matching — The brain auto-learns cause-effect patterns; experts hold better ones (Ch 7).
Perceived Value — Better End Result + less user effort = higher value and price (Ch 2).
Perceptual Control — People act like thermostats: act only when a perception drifts out of range (Ch 7).
Permission — Asking to follow up after giving Free value; a reusable asset (Ch 3).
Personal R&D — Earmark ~5% of income for your own learning and tools (Ch 8).
Planning Fallacy — People underestimate completion times; plan anyway for the Mental Simulation (Ch 9).
Point of Market Entry — The moment someone crosses the interest threshold (Ch 3).
Power — The ability to influence others' actions: influence or compulsion (Ch 9).
Predictability — Customers want to know what to expect; deliver it the same way every time (Ch 5).
Pricing Power — Ability to raise prices over time without losing too many customers (Ch 6).
Pricing Uncertainty Principle — All prices are arbitrary but must be supported (Ch 4).
Priming — Programming your Pattern Matching to flag relevant information (Ch 8).
Probable Purchaser — The specific person perfectly suited to your offer (Ch 3).
Profit / Profit Margin — Bringing in more than you spend; the gap as a percentage (Ch 6).
Prototype — An early tangible representation made to gather feedback (Ch 2).
Proxy — Measuring a closely correlated stand-in for what you care about (Ch 11).
Purchasing Power — Sum of all liquid assets you can deploy (Ch 6).
Qualification — Deciding if a prospect is a good customer before they buy (Ch 3).
Ratio — Comparing two measurements by dividing one by the other (Ch 11).
Reactivation — Getting lapsed customers to buy again — cheapest revenue source (Ch 4).
Receptivity — How open someone is to your message (what + when) (Ch 3).
Reference Level — The set point/range that defines "under control" (Ch 7).
Refactoring — Improving a system's efficiency without changing its output (Ch 12).
Referrals — Transferring "known and liked" trust to a stranger (Ch 9).
Reinterpretation — Rewriting the meaning of past events to change future simulations (Ch 7).
Remarkability — Designing an offer literally worth remarking on (Purple Cow) (Ch 3).
Reorganization — Random trial-and-error when a Reference Level is violated but the fix is unknown (Ch 7).
Reputation — What people generally think of your offer; "branding" demystified (Ch 3).
Resilience — Toughness/flexibility to handle an uncertain world (Ch 12).
Risk Reversal — Shifting transaction risk from buyer to seller via a guarantee (Ch 4).
Return on Investment (ROI) — Value created per unit of time/resources invested (Ch 6).
Safety — Communication requires both parties feel safe; threatened people stonewall (Ch 9).
Sampling — Using a small random share of output as a proxy for the whole (Ch 11).
Scale — Ability to reliably Duplicate/Multiply as volume rises (Ch 5).
Scarcity — Limited quantity/time triggers Loss Aversion; fake scarcity backfires (Ch 7).
Scenario Planning — Constructing hypotheticals and simulating your response (Ch 12).
Second-Order Effects — Consequences have consequences, sometimes opposite to intent (Ch 10).
Segmentation — Splitting data into subgroups to reveal hidden relationships (Ch 11).
Selection Test — The environmental constraint deciding which systems survive (Ch 10).
Shadow Testing — Selling an offer before it exists (transparently) to test CIAs (Ch 2).
Social Proof — Learning how to act by watching others, especially when ambiguous (Ch 9).
Social Signals — Tangible indicators of an intangible quality (a Rolex's message) (Ch 9).
Standard Operating Procedure (SOP) — A predefined process for a recurring task (Ch 12).
States of Being — Present-experience qualities used as decision criteria, not goals (Ch 8).
Stress and Recovery — Run near, not at, 100%, with guilt-free rest (Ch 8).
Stress Testing — Simulating extremes to find a system's breaking point (Ch 12).
Sufficiency — The profit point that makes continuing worthwhile ("ramen profitable") (Ch 6).
Sunk Cost — Unrecoverable past investment that should not drive forward decisions (Ch 6).
Systemization — Making a process explicit, repeatable, and externalized (Ch 5).
Ten Ways to Evaluate a Market — Score a market 0–10 on ten dimensions before entering (Ch 2).
Threat Lockdown — Perceived threat triggers fight/flee/freeze, killing productive work (Ch 7).
Three Dimensions of Negotiation — Setup, Structure, Discussion (two happen before you sit down) (Ch 4).
Three Universal Currencies — Negotiations trade in resources, time, and flexibility (Ch 4).
Throughput — The rate at which a system reaches its goal (Ch 5, Ch 10).
Transaction — An exchange of value; the defining moment of every business (Ch 4).
Trust — Belief you'll deliver what you promise; no Trust, no Transaction (Ch 4).
Twelve Standard Forms of Value — Product, Service, Shared Resource, Subscription, Resale, Lease, Agency, Audience Aggregation, Loan, Option, Insurance, Capital (Ch 2).
Uncertainty — Unknown unknowns (black swans); distinct from plannable Risk (Ch 10).
Value Capture — Retaining a share of value created per transaction; too much and customers flee (Ch 6).
Value Stream — Every step from Value Creation through delivery to the customer (Ch 5).
Value-Based Selling — Reinforcing the Reasons Why the offer is valuable to this buyer (Ch 4).
Visualization — Helping prospects imagine life after accepting your offer (Ch 3).
Willpower Depletion — Willpower runs on glucose and depletes with use (Ch 7).