Getting Traction

Photo by Bierlos http://www.flickr.com/photos/bierlos/4591931914/

Photo by Bierlos

Traction trumps everything for angel investors. Traction is the proxy by which you can determine how well a startup is doing. It demonstrates that the team is able to execute together. That the product has a market with real customers.

“Traction is real customers. If you charge for your product, it’s real paying customers. If your product is free, it’s a real user base. In other words, traction is a signal that your team can produce real results in a real market.” - Gabriel Weinberg

Traction means a lot of different things. Is traction revenue? Maybe. Is traction number of uniques? Depends. Is traction conversion rate? Sometimes. Traction differs at different points in a company’s lifecycle, but it designed to show that there is a demand for the product/service you are building. And it’s not always revenue. There are different milestones for startups at different stages of development. The goal is to get to product/market fit quickly with a minimum viable product. Then establish metrics to measure and evaluate product performance.Dave McClure‘s Startup Metrics for Pirates is a great summary of the types of metrics startups can build into their applications and marketing analysis to track the effectiveness of their ability to attract, convert and retain customers.

How do you avoid expensive build, market and fail attempts?

Elements of a Startup Growth Curve by Sean Ellis

Elements of a Startup Growth Curve by Sean Ellis

Now you’ve got your metrics. You validated your minimum viable product. How do you get traction without spending a ton of cash?

Go figure out what you can do for zilch. That’s right nothing. Nada. Zip. Zero. Zilch. Assume you’ve got a marketing budget that is zero dollars. Then go figure out how you’re going to spend it to find, convert and retain customers. Pick a big, ostentatious goal. A million uniques. A million dollars in revenue. 25 new paying customers. The actual numbers are going to be specific to your startup. But the goal is to drive those numbers for as little (think $0) as possible using:

  • Extreme customer service
  • Inbound marketing
  • Conference submissions
  • Social media engagement
  • Blogging

There are a lot off different activities that startups can do to help drive customers. Go drive real traction. Get to’er.

Need some inspiration. Check out:

What are your favourite examples of startup marketing on the cheap?

  • Hassan

    Amazing information.

    Never thought of the AARRR Before. It is a great challenge to do a lot with zilch but that is what makes any product great.

    Recently I joined a company and am starting to believe that sales is everything.

  • JohnK

    I understand the point your making but it's a fallacy to think those activities don't cost money. For any business anything that involves time or personnel has a dollar value associated with it. Joel Spolsky even questioned whether his blogging and magazine article writing over the years was worth his investment (which was just his time, kind a like your position) and he felt it wasn't.

    I agree that there are a lot of low cost/time intensive activities to drive traction but I think too many start-ups think having a blog/being on twitter and going to tech meet-ups is how their customers will find them – which sadly isn't the case.

  • http://www.arkayne.com Pkenjora

    Although I appreciate free and the theory behind it, its not for startups. Startups need to worry about opportunity cost number one. Time is money so lets just call it “Timoney”.

    Everything you describe above costs timoney. So its not really free. So the more important question is… How much timoney does each one cost and how many conversions are delivered in return?

  • Hassan

    Amazing information.

    Never thought of the AARRR Before. It is a great challenge to do a lot with zilch but that is what makes any product great.

    Recently I joined a company and am starting to believe that sales is everything.

  • JohnK

    I understand the point your making but it’s a fallacy to think those activities don’t cost money. For any business anything that involves time or personnel has a dollar value associated with it. Joel Spolsky even questioned whether his blogging and magazine article writing over the years was worth his investment (which was just his time, kind a like your position) and he felt it wasn’t.

    I agree that there are a lot of low cost/time intensive activities to drive traction but I think too many start-ups think having a blog/being on twitter and going to tech meet-ups is how their customers will find them – which sadly isn’t the case.

  • Hassan

    I agree,

    but we must also look at the initiation of such apps as Twitter. How did that get promoted? I saw in his interview that he just stepped outside and canvasses/harassed all his friends. Is there such a huge need that is unmet in the market or is the product something completely new and different?

    As an entrepreneur the opportunity cost is always there but in relative terms what is that true cost. Myself earning below the poverty line, trying to canvas might not have a great opportunity cost.

    Nothing is ever free. You are correct about that.

  • http://www.arkayne.com Pkenjora

    Although I appreciate free and the theory behind it, its not for startups. Startups need to worry about opportunity cost number one. Time is money so lets just call it “Timoney”.

    Everything you describe above costs timoney. So its not really free. So the more important question is… How much timoney does each one cost and how many conversions are delivered in return?

  • Hassan

    I agree,

    but we must also look at the initiation of such apps as Twitter. How did that get promoted? I saw in his interview that he just stepped outside and canvasses/harassed all his friends. Is there such a huge need that is unmet in the market or is the product something completely new and different?

    As an entrepreneur the opportunity cost is always there but in relative terms what is that true cost. Myself earning below the poverty line, trying to canvas might not have a great opportunity cost.

    Nothing is ever free. You are correct about that.

  • http://davidcrow.ca/ davidcrow

    Timoney, sounds like you've registered a domain ;-)

    You are correct, in a consulting business time is money. This is about evaluating the IRR of the time (aka money) to generate traction.

    However you weight capital expenditure versus sweat equity or sunk costs, i.e., salaries differently when evaluating efforts. Think, if you've already built a product and gotten to product/market fit how do you know it's successful? It's about doing the things to get it promoted, adopted, etc. It's not necessarily about building new features that no users will ever see or use.

    This is about understanding how to use your resources and manage your sunk costs to generate more traction.

  • http://davidcrow.ca/ davidcrow

    Thanks for the comment JohnK.

    I think it's about evaluating the potential return of the efforts. You can build new features. But if you don't have product/market fit, and you don't have users/customers/etc. it doesn't matter because no one will ever see or use those features. The goal here is to look at how do you measure and build traction.

    Free, maybe I should have said, no additional capital expenditure. It's about making sure you get a return for your efforts.

    Joel's posts have been about evaluating and comparing his effort blogging at doing something else. It also means that you can start to determine the value of potential employees.

  • http://davidcrow.ca/ davidcrow

    Timoney, sounds like you’ve registered a domain ;-)

    You are correct, in a consulting business time is money. This is about evaluating the IRR of the time (aka money) to generate traction.

    However you weight capital expenditure versus sweat equity or sunk costs, i.e., salaries differently when evaluating efforts. Think, if you’ve already built a product and gotten to product/market fit how do you know it’s successful? It’s about doing the things to get it promoted, adopted, etc. It’s not necessarily about building new features that no users will ever see or use.

    This is about understanding how to use your resources and manage your sunk costs to generate more traction.

  • http://davidcrow.ca/ davidcrow

    Thanks for the comment JohnK.

    I think it’s about evaluating the potential return of the efforts. You can build new features. But if you don’t have product/market fit, and you don’t have users/customers/etc. it doesn’t matter because no one will ever see or use those features. The goal here is to look at how do you measure and build traction.

    Free, maybe I should have said, no additional capital expenditure. It’s about making sure you get a return for your efforts.

    Joel’s posts have been about evaluating and comparing his effort blogging at doing something else. It also means that you can start to determine the value of potential employees.

  • JohnK

    Thanks for the reply David.

    I agree that getting into feature creep would be problematic. Heck, I learned that lesson the hard way :). Maybe old fashion methods like cold calling & recruiting the right target customers to get their insight on your product offering early on maybe more important to getting to product market fit than some of the other activities you list?

    For example, Check out techcrunch's original review of twitter
    http://techcrunch.com/2006/07/15/is-twttr-inter

    many start-ups think getting a write up on the holy grail blog is a sure fire way of getting traction and ultimately becoming successful. Yet if most other startups besides twitter had gotten this kind of review they would have closed shop or pivoted. I think it's crucial that the feedback you get on your product is from the right target audience, so why not do it early and cut to the chase? Spending the effort to network too early may make you think it's those activities that are failing instead of your product.

  • JohnK

    Thanks for the reply David.

    I agree that getting into feature creep would be problematic. Heck, I learned that lesson the hard way :). Maybe old fashion methods like cold calling & recruiting the right target customers to get their insight on your product offering early on maybe more important to getting to product market fit than some of the other activities you list?

    For example, Check out techcrunch’s original review of twitter
    http://techcrunch.com/2006/07/15/is-twttr-interesting/

    many start-ups think getting a write up on the holy grail blog is a sure fire way of getting traction and ultimately becoming successful. Yet if most other startups besides twitter had gotten this kind of review they would have closed shop or pivoted. I think it’s crucial that the feedback you get on your product is from the right target audience, so why not do it early and cut to the chase? Spending the effort to network too early may make you think it’s those activities that are failing instead of your product.

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  • http://davidcrow.ca/ davidcrow

    Hi John

    I think you're mistaking traction, press coverage, measurement and tenancity (or more likely, I've done a poor job conveying what I'm thinking).

    Getting to product/market fit – fast, quickly, effectively, cheaply.get it in front of potential customers. Who and how changes on your market and your offering. Usability, customer development, whatever. FIgure out the gratification engine, growth engine and economic engine that will drive adoption in a huge addressable market.

    Traction = measure of relative success. The number of times I hear “well that's just execution”. Exacution is hard. Show some traction and it doesn't have to be revenue. Twitter had traction, i.e., user adoption and usage. These are non-revenue numbers. But people found it “interesting” and used it. Regardless of the PR.

    PR and press coverage is not traction. It might lead to traction. It might lead to users. But it is not a panacea. Or a silver bullet. Go do things for users.

    Tenacity = something all entrepreneurs must have. Paul Graham called it relentlessly resourceful. http://www.paulgraham.com/relres.html

  • http://davidcrow.ca/ davidcrow

    Hi John

    I think you’re mistaking traction, press coverage, measurement and tenancity (or more likely, I’ve done a poor job conveying what I’m thinking).

    Getting to product/market fit – fast, quickly, effectively, cheaply.get it in front of potential customers. Who and how changes on your market and your offering. Usability, customer development, whatever. FIgure out the gratification engine, growth engine and economic engine that will drive adoption in a huge addressable market.

    Traction = measure of relative success. The number of times I hear “well that’s just execution”. Exacution is hard. Show some traction and it doesn’t have to be revenue. Twitter had traction, i.e., user adoption and usage. These are non-revenue numbers. But people found it “interesting” and used it. Regardless of the PR.

    PR and press coverage is not traction. It might lead to traction. It might lead to users. But it is not a panacea. Or a silver bullet. Go do things for users.

    Tenacity = something all entrepreneurs must have. Paul Graham called it relentlessly resourceful. http://www.paulgraham.com/relres.html

  • http://twitter.com/aprildunford April Dunford

    This is a really interesting discussion.
    My problem with all of this stuff is that it is very specific to one type of startup – namely a B2C web-based startup. If we are talking about any other type of startup there are a different set of things you would look at for traction.
    Part of what I loved about 4 Steps is that the examples in there are very much B2B software (Steve's background).
    For example, there is no way any B2B startup would use Dave's “Acquisition” stuff because frankly, web traffic means bupkis and you sure as heck aren't acquiring customers using things like “widgets” or “Domains”. The glaring omission of anything related to direct sales, means it does not apply to any startup selling anything where a deal is greater than $50K.
    When it comes to traction post product-market fit for those types of B2B companies, they can also do a lot of things that don't require a budget to raise awareness but I'd argue that traction could only really be measured by number of paying customers, revenue or both.
    April

  • http://davidcrow.ca/ davidcrow

    Agreed.

    Enterprisey companies need a different set of traction metrics. I think I may have emphasized McClure's Startup Metrics for Pirates too much. The conversations started with:

    “Traction is real customers. If you charge for your product, it’s real paying customers. If your product is free, it’s a real user base. In other words, traction is a signal that your team can produce real results in a real market.”

    This is about understanding that traction is king. And traction metrics are different for different startups. @Jevon has said he plans to follow up with a more enterprise focused post. And I can't wait to read it.

  • http://twitter.com/aprildunford April Dunford

    This is a really interesting discussion.
    My problem with all of this stuff is that it is very specific to one type of startup – namely a B2C web-based startup. If we are talking about any other type of startup there are a different set of things you would look at for traction.
    Part of what I loved about 4 Steps is that the examples in there are very much B2B software (Steve’s background).
    For example, there is no way any B2B startup would use Dave’s “Acquisition” stuff because frankly, web traffic means bupkis and you sure as heck aren’t acquiring customers using things like “widgets” or “Domains”. The glaring omission of anything related to direct sales, means it does not apply to any startup selling anything where a deal is greater than $50K.
    When it comes to traction post product-market fit for those types of B2B companies, they can also do a lot of things that don’t require a budget to raise awareness but I’d argue that traction could only really be measured by number of paying customers, revenue or both.
    April

  • http://davidcrow.ca/ davidcrow

    Agreed. Enterprisey companies need a different set of traction metrics. I think I may have emphasized McClure’s Startup Metrics for Pirates too much. The conversations started with:

    “Traction is real customers. If you charge for your product, it’s real paying customers. If your product is free, it’s a real user base. In other words, traction is a signal that your team can produce real results in a real market.”

    This is about understanding that traction is king. And traction metrics are different for different startups. @Jevon has said he plans to follow up with a more enterprise focused post. And I can’t wait to read it.

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  • http://www.eben.ca ceben

    I also look forward to Jevon's future post on this subject as I think it's an important one. Those behind the lean startup movement are full of B2C examples and metrics and there is very little in the way of good sound measurement advice in the B2B space. Of course each startup must determine its own set of metrics to measure traction but there is great value in building best practices through tangible and practical real life examples. As someone who builds software to automate performance management scorecards, I believe that no individual or business can be successful without the right measurement framework. At the same time, I know how hard this can be, especially for those who's skills often have no relationship to the practice of measurement.

  • http://www.eben.ca ceben

    I also look forward to Jevon’s future post on this subject as I think it’s an important one. Those behind the lean startup movement are full of B2C examples and metrics and there is very little in the way of good sound measurement advice in the B2B space. Of course each startup must determine its own set of metrics to measure traction but there is great value in building best practices through tangible and practical real life examples. As someone who builds software to automate performance management scorecards, I believe that no individual or business can be successful without the right measurement framework. At the same time, I know how hard this can be, especially for those who’s skills often have no relationship to the practice of measurement.

  • http://www.eben.ca ceben

    I also look forward to Jevon’s future post on this subject as I think it’s an important one. Those behind the lean startup movement are full of B2C examples and metrics and there is very little in the way of good sound measurement advice in the B2B space. Of course each startup must determine its own set of metrics to measure traction but there is great value in building best practices through tangible and practical real life examples. As someone who builds software to automate performance management scorecards, I believe that no individual or business can be successful without the right measurement framework. At the same time, I know how hard this can be, especially for those who’s skills often have no relationship to the practice of measurement.

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