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Glossary

AI & app terms, explained simply

Forty words you'll hear when building an AI product or app, in plain English. Bookmark it, share it with your team.

AI

AI agent

An LLM-powered system that can plan steps, call tools or APIs, and act on the results to finish a task, rather than only replying with text.

Learn more about AI agent

Copilot

An AI assistant embedded inside a product that helps a user do their work, for example drafting replies or summarising data, while the user stays in control.

Embedding

A list of numbers that represents the meaning of a piece of text or an image, so similar meanings sit close together. Used for semantic search and RAG.

Vector database

A database optimised to store embeddings and quickly find the most similar ones. Examples include pgvector, Pinecone and Weaviate.

Prompt engineering

Designing the instructions, examples and context given to a model so it produces reliable, useful outputs.

Context window

The maximum amount of text (measured in tokens) a model can consider at once, including instructions, documents and conversation history.

Token

The unit models read and write, roughly three-quarters of an English word. Model pricing and limits are measured in tokens.

Learn more about Token

Hallucination

When a model states something confidently that is not true. Reduced with grounding (RAG), evaluation and clear instructions.

Evals (evaluation suite)

A set of realistic test cases with expected outcomes, run automatically against every prompt or model change to measure quality.

Guardrails

Checks around an AI system that block unsafe, off-topic or malformed inputs and outputs before they reach users or other systems.

Tool calling

A model capability to request a function or API call with structured arguments, which is how agents take actions like booking or searching.

Human-in-the-loop

A design where a person reviews or approves an AI's work at key moments, especially for decisions with real-world consequences.

Multimodal model

A model that understands more than one type of input, such as text plus images, audio or documents.

On-device AI

Running a model directly on a phone or laptop instead of in the cloud, for privacy, offline use and lower latency.

Mobile

Cold start

The time it takes an app to open from scratch. Fast cold starts strongly influence first impressions and retention.

Crash-free rate

The percentage of user sessions that end without a crash. Healthy consumer apps target above 99.5%.

Push notification

A message an app sends to a user's device outside the app. Powerful for re-engagement when timely and relevant.

In-app purchase (IAP)

Buying digital goods or subscriptions inside a mobile app through Google Play or the App Store billing systems.

Product & SaaS

SaaS

Software as a Service: software delivered over the internet on a subscription, with no installation for the customer.

Learn more about SaaS

Multi-tenancy

An architecture where one application serves many customer organisations while keeping each one's data separate and secure.

Technical debt

The future cost of shortcuts taken today in code or architecture. Some is healthy; too much slows every release.

CI/CD

Continuous integration and delivery: automated testing and deployment so changes reach users quickly and safely.

Usage-based pricing

Charging customers by how much they use, such as per seat, per API call or per document processed, instead of a flat fee.

Growth

Retention

The share of users who keep coming back over time, usually measured on day 1, day 7 and day 30. The best predictor of a product's long-term success.

Learn more about Retention

Churn

The rate at which customers or users stop using or paying for a product in a given period.

Activation

The moment a new user first experiences the core value of a product, the "aha moment". Shortening the path to it lifts retention.

Paywall

The screen that asks a user to subscribe or pay. Good paywalls show value first and are tested continuously.

A/B testing

Showing two versions of a screen or feature to different users and measuring which performs better on a chosen metric.

LTV (lifetime value)

The total revenue a customer is expected to generate over their relationship with a product. Compared with acquisition cost to judge growth.

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