Glossary / Bill of materials (BOM)

Bill of materials (BOM)

The itemized list of every component and material in a single unit. It anchors a hardware product's per-unit cost and the unit economics built on top of it.

Introduced in Chapter 3 — When Gadgets Dissolve Into Features of Tangibles.

Related terms

• Autonomy ladder — A staged scale of how independently a connected device decides and acts, from simple monitoring up to closed-loop control — a way to place a product along the Sense-Decide-Act progression.
• Churn — The fraction of customers lost each cycle.
• Approve-Pivot-Kill — The book's validation verdict: every test of a concept ends in one of three decisions — approve it to the next stage, pivot the approach, or kill it — with no abstentions and no indefinite holds.
• Commoditization — The slide by which a once-distinctive product becomes interchangeable with rivals' and loses its price premium — the erosion that connected, software-driven features are meant to resist.