Traction: A Startup Guide to Getting Customers

by Gabriel Weinberg

Traction is a sign that your company is taking off. It’s obvious in your core metrics: if you have a mobile app, your download rate is growing rapidly. If you’re a search engine, your number of searches is skyrocketing. If a SaaS tool, your monthly revenue is blowing up. If a consumer app, your daily active users are increasing quickly. You get the point.

“Traction is basically quantitative evidence of customer demand. So if you’re in enterprise software, [initial traction] may be two or three early customers who are paying a bit; if you’re in consumer software the bar might be as high as hundreds of thousands of users. … It’s the Supreme Court definition of porn. You’ll know it when you see it.”

Paul Graham, founder of startup accelerator Y Combinator, puts it like this: “A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of ‘exit.’ The only essential thing is growth. Everything else we associate with startups follows from growth.”

traction is

growth. The pursuit of traction is what defines a startup.

It’s hard to predict the channel that will work best. You can make educated guesses, but until you start running tests, it’s difficult to tell which channel is the best one for you right now.

ads, as well as flyers and other local advertisements. These ads reach demographics that are harder to target online, like seniors, less tech-savvy consumers and commuters.

Successful companies have built micro-sites, developed widgets, and created free tools that drive thousands of leads each month.

Business development (BD) is the process of creating strategic relationships that benefit both your startup and your partner.

We spoke with Rob Walling, founder and organizer of MicroConf, to talk about how to run a fantastic event, how it can benefit you, and the type of work that goes into pulling off a successful event.

Poor distribution—not product—is the number one cause of failure.

Using Bullseye to find your channel is a five-step process: brainstorm, rank, prioritize, test, and focus on what works. Rinse, repeat.

This first step is meant to help you systematically counteract your channel biases.

You should know what marketing strategies have worked in your industry, as well as the history of companies in your space.

It’s especially important to understand how similar companies acquired customers over time, and how unsuccessful companies wasted their marketing dollars.

An easy way to organize your brainstorm is with a spreadsheet. We have an example one in the resources you can use as a starting point. Each column contains an idea of how you might use a particular channel. You can have many ideas per channel.

when testing, you are not trying to get a lot of traction with a channel just yet. Instead, you are simply trying to determine if it’s a channel that could work for your startup. Your main consideration at this point is speed to get data and prove out your assumptions.

You want to design smaller scale tests that don’t require much upfront cost or effort. For example, run four Facebook ads vs. forty. You should be able to get a rough idea of a channel’s effectiveness with just a few hundred dollars.

At any stage in a startup’s lifecycle, one traction channel dominates in terms of customer acquisition. That is why we suggest focusing on one at a time, and only after you’ve identified a channel that seems like it could actually work.

In the early days, the tactics of sponsoring mid-level bloggers in the financial niche and guest posting allowed them to acquire their first 40,000 customers.

They would research many channels, try a few, and focus on the most promising until it stopped working. Bullseye is designed to systemize this successful process.

The Bullseye Framework is a five-step repeatable process to maximize your chances of getting traction: brainstorm, rank, prioritize, test, and focus.

Almost every failed startup has a product. What failed startups don’t have are enough customers.

Building something people want is required for traction, but isn’t enough.

you build something users want but can’t figure out a useful business model – users won’t pay, won’t click on adverts, etc. (no market). You build something people want, but there are just not enough users to reach profitability (small market). You build something users want, but reaching them is cost prohibitive (hard to reach market). Finally, you build something users want, but a lot of other companies build it too, and so it is too hard to get customers (competitive market).

spend 50% of your time on product and 50% on traction.

Traction development gets you additional data, like what messaging is resonating with potential users, what niche you might focus on first, what types of customers will be easiest to acquire, and major distribution roadblocks you might run into.

waiting until you ship a product to embark on traction development usually results in one or more additional product development cycles as you adjust to real market feedback.

Instead of beta testing a product, we beta tested an idea and integrated the feedback we received from our readers early on in our product development process.

Bullseye works hand-in-hand with Lean. What Lean is to product development, Bullseye is to traction. With Lean, you figure out the right features to build. With Bullseye, you figure out the right traction channel to pursue.

the biggest mistake startups make when trying to get traction is failing to pursue traction in parallel with product development.

Your traction strategy should always be focused on moving the needle for your company. By moving the needle, we mean focusing on marketing activities that result in a measurable, significant impact on your company.

From the perspective of getting traction, you can think about working on a product in three phases: Phase I – making something people want Phase II – marketing something people want Phase III – scaling your business

Phase I is very product focused and involves pursuing initial traction while also building your initial product as we discussed above. This often means getting traction in ways that don’t scale – giving talks, writing guest posts, emailing people you have relationships with, attending conferences and doing whatever you can to get in front of customers.

startups take off because the founders make them take off…

unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.”

After your growth curve flattens, what worked before usually will not get you to the next level.

You can think of your initial investment in traction as pouring water into a leaky bucket.

deal startup funded no matter how much traction you had. Twelve months ago you could have gotten your mobile app company funded with ten thousand downloads. Today it’s probably going to take a few hundred thousand downloads and a strong rapid adoption rate for a real financing to take place.

The definition of traction keeps changing as the environment gets competitive.

That’s why it is actually useful to look at AngelList and look at companies just got funded; that will give you an idea of where the bar is right now.”

It is also a good idea to first reach out to individuals who intimately understand what you’re working on (perhaps since they have worked on or invested in something similar before).

The better your prospective investors understand what you’re doing, the less traction they will need to see before they invest because they are more likely to extrapolate your little traction and believe it could grow into something big. On the other hand, those investors that have little real-world experience within your industry may find it hard to extrapolate and may demand more traction initially before they invest. An outlier is friends and family, who may not need to see any traction before investing since they’re investing in you personally.

There are many reasons why investors may say no that are simply beyond your control (investment goals, timing, expertise, etc.).

Product engagement means different things for different startups, but generally it means real customers using your product because it is solving some problem or need for them. Sustainable product engagement growth (i.e. more customers getting engaged over time) is hard for any investor to ignore.

sustainable growth,

A lot of startup success hinges on choosing a great market at the right time.

In retrospect, a lot of founders feel they picked their company idea too quickly, and they would have picked something they were more passionate about if they realized it was such a long haul.

A startup can be awesome if you believe in it: if not, it can get old quickly.

If you are considering a pivot, the first thing to look for is evidence of real product engagement, even if it is only a few dedicated customers. If you have such engagement, you might be giving up too soon.