Glossary Category: Technology

An API, or Application Programming Interface, is essentially a contract between two pieces of software. Instead of one program having to understand the entire inner workings of another, the API defines a specific, limited set of requests it will accept and the exact data it will send back in response. Most modern APIs are “REST APIs” that work over the same web protocol (HTTP) your browser uses, exchanging structured data — usually in a format called JSON — instead of the more complex protocols used a decade ago.

For a founder, APIs are what make it possible to build a real product quickly instead of building everything from scratch. A Philippine fintech startup, for example, does not need to build its own connection to every bank and e-wallet — it can call a payments API and get that functionality in days instead of months. This is also how many startups eventually become platforms themselves: once other companies can plug into your API, you’ve moved from selling a product to renting out infrastructure.

The nuance beginners often miss: an API being available does not mean it is free, stable, or unlimited. Most commercial APIs are rate-limited, versioned (meaning an old integration can break when the provider updates it), and billed per request or per tier — so a startup’s technical roadmap and its cost structure are often more tightly linked than they first appear.

🇵🇭 Philippine Example

PayMongo, a Manila-based, Y Combinator-backed fintech company, is built entirely around this idea — its core product is a developer-facing payments API that lets any Philippine business accept GCash, Maya, credit cards, and bank transfers without building its own connections to each of those payment rails.

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SaaS, or Software as a Service, describes software that a company hosts centrally on its own servers and makes available to customers over the internet, typically for a recurring fee rather than a one-time purchase. Instead of installing a program on your own computer and running your own updates, you log into a website or app, and the provider handles hosting, security patches, and new features for every customer at once.

This model matters enormously for how startups are built and valued. Because customers pay repeatedly rather than once, SaaS companies are judged on recurring-revenue metrics rather than one-time sales figures, and a healthy SaaS business depends on keeping customers subscribed — low churn — for longer than it costs to acquire them. It also lowers the barrier for a small company to access enterprise-grade software, since there’s no large upfront license fee or in-house IT team required to run it.

The nuance many beginners miss: not every internet-delivered software is really “SaaS” in the business-model sense — the term implies an ongoing subscription relationship with continuous updates, not just software that happens to run in a browser. A one-time-purchase app hosted online, or a free tool with no recurring payment, doesn’t carry the same recurring-revenue economics that make SaaS attractive to investors.

🇵🇭 Philippine Example

Sprout Solutions, founded in 2015, describes itself as the largest homegrown B2B SaaS company in the Philippines — its HR and payroll platform is sold to thousands of Philippine businesses on a subscription basis and automatically handles local compliance requirements like BIR, SSS, PhilHealth, and Pag-IBIG filings.

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B2B, short for business-to-business, describes any company whose customers are other organizations — a payroll platform sold to HR departments, a payments API sold to other startups, or office supplies sold to a chain of stores are all B2B. The buyer in a B2B deal is rarely one person acting alone; it’s usually a decision involving a budget owner, an end user, and sometimes a procurement or IT team, which is why B2B sales cycles tend to be longer and more relationship-driven than a typical retail purchase.

This matters for how a startup should be built from day one. B2B products are usually priced higher per customer than consumer products, but require more effort to close each deal — meaning founders in this space need to think in terms of a smaller number of higher-value relationships rather than mass-market volume. Contracts, service-level commitments, and dedicated customer support also become more important than they would be for a consumer app.

A nuance worth understanding: many companies are not purely one or the other. A “B2B2C” company sells to a business, but that business then puts the product in front of its own end consumers — a common structure for embedded fintech or logistics tools serving Philippine SMEs and their customers.

🇵🇭 Philippine Example

Two of the Philippines' best-known homegrown tech companies are squarely B2B: Sprout Solutions sells HR and payroll software to other businesses rather than to individual workers, and PayMongo sells its payments infrastructure to other companies that need to accept payments, not to individual shoppers.

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B2C, short for business-to-consumer, describes any company selling directly to individual people for their personal use — a food delivery app, a ride-hailing service, or a mobile wallet are all B2C, even if the company behind them also has enterprise or B2B products. The buying decision in B2C is usually made by one person, often quickly and based on price, convenience, or brand trust, rather than the multi-stakeholder approval process common in B2B.

For founders, B2C businesses generally need much larger user numbers to reach meaningful revenue, since individual consumers pay far less per transaction than businesses do. This is why B2C startups tend to obsess over metrics like customer acquisition cost and lifetime value — with millions of potential users but thin margins per user, a small shift in either number can be the difference between a sustainable business and a money-losing one.

A nuance beginners often miss: strong B2C brand recognition does not automatically mean strong B2C unit economics. A consumer app can have millions of downloads and still lose money on every active user if it costs more to acquire and retain them than they ever pay back — which is why growth alone, without healthy retention, is not proof of a working business model.

🇵🇭 Philippine Example

GCash, the Philippines' dominant mobile wallet with over 90 million registered users, is a clear B2C business — individual Filipinos use it directly to send money, pay bills, and save, even though GCash also runs B2B partnerships with merchants and billers behind the scenes.

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A marketplace is a business model where the company’s core value comes from matching two sides of a transaction — buyers and sellers, riders and drivers, employers and job seekers — rather than from selling its own inventory. The company typically takes a small cut, called a take rate, of each transaction that happens through it, rather than earning a subscription fee or selling a product it manufactures itself.

What makes marketplaces distinct — and difficult — is that they depend on network effects on both sides at once: a marketplace with plenty of buyers but no sellers, or vice versa, has nothing to offer anyone. This is often called the “chicken-and-egg problem,” and it’s why marketplace startups frequently spend their early years manually recruiting one side, often sellers, before the other side arrives naturally. Trust and safety — verifying listings, handling disputes, preventing fraud — also become core product responsibilities, not an afterthought, since the company is vouching for transactions between strangers.

A nuance worth understanding: once a marketplace reaches scale, buyers and sellers sometimes try to bypass it — meeting once through the platform, then transacting directly afterward to avoid the fee. Well-run marketplaces design their product, including payments, reviews, and ongoing convenience, specifically to make staying on-platform worth the fee.

🇵🇭 Philippine Example

Carousell Philippines (formerly OLX Philippines, which merged into Carousell in 2019 after a Naspers-backed deal) is a real, active Philippine marketplace connecting individual buyers and sellers of secondhand goods, vehicles, and more — Carousell itself never owns any of the items listed on it.

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A platform is different from a standalone product because its value grows from what other people build on top of it, not just from what the company itself built. An app store, a payments network, or a super-app that lets outside merchants set up shop inside it are all platforms — the company provides the underlying infrastructure, whether that’s APIs, tools, distribution, or all three, and an ecosystem of other businesses builds on that foundation.

This matters for how a startup thinks about growth. A pure product company grows roughly as fast as its own team can build features; a platform company can grow faster than its own headcount, because outside developers and businesses are adding value on top of it for their own reasons. That’s also what makes platforms defensible over time — once thousands of other businesses depend on your infrastructure, switching away becomes costly for everyone involved, not just for the platform owner.

The nuance many early-stage founders miss: calling your product a “platform” doesn’t make it one. A real platform requires that outside parties can genuinely build on it, usually through a public API, SDK, or plugin system, and are actually doing so. A single app with many internal features, no matter how many, is still a product, not a platform, until others are building on top of it.

🇵🇭 Philippine Example

GCash began as a simple mobile wallet but has evolved into a genuine platform: beyond its own features, it now hosts thousands of partner merchants, lending products, insurance, and investment services from other companies inside the GCash app, with its own APIs letting outside businesses build directly on its infrastructure.

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A tech stack is the full set of technical choices a team makes to build and run its product — typically including a front-end layer (what users see in their browser or app), a back-end layer (the server-side logic and business rules), a database (where information is stored), and the hosting or cloud infrastructure everything runs on. Two startups solving the same problem can have completely different stacks and both be perfectly viable.

For founders, the stack decision is really a trade-off between speed, cost, and future flexibility. Early-stage teams often deliberately choose well-understood, “boring” technology because it’s easier to hire for, has more available documentation, and lets the team focus on the product rather than fighting unfamiliar tools — chasing the newest, most technically impressive stack is rarely the right call for a small team racing to find product-market fit.

A nuance worth knowing: investors and technical co-founders sometimes over-index on stack sophistication as a signal of quality, but a polished, modern stack built on a product nobody wants is still a failed startup. The stack should be judged on whether it lets the team ship and iterate quickly and reliably at the company’s current stage, not on how impressive it sounds in a pitch deck.

🇵🇭 Philippine Example

There isn't a single verifiable "typical" tech stack for Philippine startups worth naming, since choices vary widely by team and product — but a common pattern across the local startup scene is early-stage teams building on widely available frameworks, such as JavaScript-based front ends paired with cloud-hosted back ends, and, increasingly since Google Cloud opened a Philippines-based cloud region in 2024, having a genuine local hosting option rather than relying solely on data centers abroad.

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Open source software is software whose source code — the actual instructions that make it run — is published publicly under a license that allows others to view it, use it, modify it, and often redistribute their own changes. This is the opposite of “proprietary” or “closed source” software, where only the company that built it can see or change the underlying code. Well-known open-source licenses like MIT, Apache, and GPL each set different rules for how the code can be reused, especially in commercial products.

Open source matters to startups in two directions. Almost every modern tech company builds on top of free, open-source components — programming languages, frameworks, and libraries other people have already built and shared — which is a large part of why building software has become dramatically cheaper over the past two decades. Some startups also release parts of their own code as open source deliberately, to build developer trust, attract talent, or drive adoption of a paid “open-core” version with extra features.

A nuance worth understanding: “open source” and “free” are not the same thing. The code may be free to view and use, but many open-source licenses still carry obligations, such as crediting the original authors or open-sourcing your own modifications, and plenty of profitable companies are built entirely around support, hosting, or premium features on top of software that is technically free.

🇵🇭 Philippine Example

Bayanihan Linux, developed since 2001 by the Advanced Science and Technology Institute (ASTI) under the Philippines' Department of Science and Technology, is a real, homegrown open-source operating system built as a lower-cost alternative to proprietary software for Philippine government offices, schools, and small businesses.

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Cloud computing means renting computing power, storage, and other infrastructure from a provider’s remote data centers instead of buying and maintaining your own physical servers. It’s usually broken into layers: infrastructure-as-a-service (raw servers and storage you configure yourself), platform-as-a-service (a managed environment for running your own code), and software-as-a-service (fully finished applications) — most startups use a mix of the first two to run their own product.

For founders, the cloud is what makes it possible to launch a global-capable product with a small team and no upfront hardware investment: you pay only for the computing capacity you actually use, and can scale up or down within minutes as demand changes, rather than buying servers months in advance based on a guess about future traffic. This is a major part of why the cost of starting a tech company has fallen so dramatically compared to a generation ago.

A nuance beginners often miss: “the cloud” is not some abstract, placeless thing — it’s real physical data centers in specific countries, and where those data centers sit affects real things like how fast your app loads for local users, known as latency, and which country’s data privacy laws apply to your users’ information, known as data residency.

🇵🇭 Philippine Example

Google Cloud opened its first Philippines-based cloud region, in Manila, in 2024 — a real, verifiable milestone that gives Philippine startups a local option for hosting and cloud infrastructure, rather than relying solely on regions like Singapore, which had been the default for most Philippine tech companies before this.

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