Intellectual Frontiers

Define These Terms Once So Everyone Means the Same Thing

The glossary

The book uses Acquired Alpha as the ontology defines it. The other terms are this book’s own.

  • Acquired Alpha. An advantage a buyer gains by buying, adopting, or hiring what another party has built, strong enough to change a real decision. It counts only when the seller’s evidence for it cost the seller something real (money, time, access, data, reputation, or a changed decision) and the buyer can check that evidence without relying on the seller’s word. It means buying products, services, and capabilities, not buying a company.

  • Baseline. What the reasonable alternative produced, measured before a trial.

  • Board Questions. Eight questions a board or executive committee asks before approving a consequential purchase.

  • Claim Card. One card per claim: the claim, the decision it would change, the alternative, the evidence, its rung, its cost to the seller, how to check it, and what would show it false.

  • Consequence Bearer. The person or group other than the buyer who bears the cost of a wrong decision.

  • Cost-to-Seller Ladder. Seven rungs of evidence by what it cost the seller and how the buyer checks it.

  • Costly Question. A question that fluent writing cannot answer, because answering needs access to the seller’s records, people, or systems, or work on the buyer’s own material.

  • Eight Look-Alikes. Demo, badge, placement, chosen-reference, self-run benchmark, free-pilot, roadmap, and fluent-proposal alpha.

  • Evidence drift. A claim that was true at signing and is no longer.

  • Exit Kit. The terms and materials that let a buyer leave.

  • Exit Rehearsal. A tested walk through the exit that measures the switching time.

  • Fail Condition. An acceptance criterion with a number, a baseline, a date, and a named scorer.

  • Failable Pilot. A trial on the buyer’s terms with six parts.

  • False alpha. A claimed advantage that rests only on evidence that cost the seller nothing or that the buyer cannot check. The phrase says nothing about the seller’s honesty.

  • Proof Plan. One page per claim that matters.

  • Purchase Review. A scheduled comparison of what the purchase has produced with each Claim Card, at 30, 90, and 365 days and at renewal.

  • Seven Kinds of Claim. Capability, outcome, safety and compliance, cost, durability, fit, and team. Each has a minimum rung and a usual look-alike.

  • Signing requirements. Seven things required before signing: a Claim Card for every claim that matters, each claim at its required rung, a Proof Plan result or a plan, acceptance criteria and a Stake in the contract, an Exit Kit tested on paper, a named owner for the purchase and for the Sustainment Tail, and a signature from someone who speaks for the Consequence Bearer.

  • Stake. Money, credit, or a right the seller gives up if the claim is false.

  • Sustainment Tail. The ongoing work that begins after delivery.

  • Switching time. The time from the decision to leave to a working replacement.

  • Three Tests. The decision test, the cost test, and the check test.

  • Three-Way Sort. Build, buy, or generate once, decided before shopping.