Traction: A Startup Guide to Getting Customers

by Gabriel Weinberg

You should examine these bright spots to see how they might be expanded. Why do these customers take to your product so well? Is there some thread that unites them? Are they early adopters in a huge market or are they outliers? The answers to these questions may reveal some promise that is not immediately evident in your core metrics.

startup founders are usually forward thinking and as a result are often too early to markets (that’s why

it’s important to choose a startup idea you’re willing to stick with for many years). Granted, there is a big difference between being a few years too early and a decade too early.

How much traction is needed for investors is a moving target, but a sustainable customer growth rate is hard for investors to ignore.

Potential investors who understand your business are likely to appreciate your traction and thus invest earlier.

you’re not seeing the traction you want, look for bright spots in your userbase, pockets of users that are truly engaged with your product. See if you can figure out why it works for them and if you can expand from that base. If there are no bright spots, it may be a good time to pivot.

over time, all marketing channels become saturated.

When banner ads first debuted, they were receiving click-through rates of over 75%! Once they became commonplace, click-through rates plummeted.

This happens with all channels: strategies that once worked well will become crowded and ineffective. All it takes is one other competitor seriously pursuing traction in the same channel to drive up its cost and drive down its efficacy.

To combat this reality you should consistently conduct small experiments. Constantly running small traction tests will allow you to stay ahead of competitors pursuing the same channels.

Consistently running cheap tests will also allow you to discover new techniques with amazing results.

How much does it cost to acquire customers through this channel strategy? How many customers are available through this channel strategy? How well do these customers convert?

How long does it take to acquire a customer?

“The faster you run high quality experiments, the more likely you’ll find scalable, effective growth tactics. Determining the success of a customer acquisition idea is dependent on an effective tracking and reporting system, so don’t start testing until your tracking/reporting system has been implemented.”

This “effective tracking and reporting system” can be as complex as an analytics tool that does cohort analysis or can be as simple as a spreadsheet, but it must exist. Furthermore, each cheap test you run should have a point – to validate or invalidate specific assumption(s) in your model.

Do these systems exist?

There are many tools to help you do this type of testing, such as Optimizely, Visual Website Optimizer, and Unbounce. These tools allow you to test optimizations without making complex changes to your

a lot of research to answer: How many prospective customers landed on my website? What are the demographics of my best and worst customers? Are customers who interact with my support team more likely to stay customers longer?

what are behaviors that allow customers to stay longer or convert to more value added services.

Clicky, Google Analytics or Mixpanel can help you answer all three of these questions.

there are some quantitative metrics that are universal across traction channels.

At a minimum, include the columns of cost to acquire a customer and lifetime value of a customer within a given traction channel.

you should only be thinking about traction channels and specific strategies that have a chance of moving the needle for your startup. You can assess what can move the needle with some simple calculations. For example, how many customers do you think a given traction channel strategy could deliver? How many new customers do you need to really move the needle?

The operative question then is, “Does this channel have enough users to be meaningful?” A back-of-the-envelope calculation can go a long way!

Startups get pulled in a lot of different directions. There are always opportunities in front of you or on the horizon that you could focus on. There are always product revisions you could work on. There are always background tasks nagging at you. How do you decide what to work on?

You should always have a traction goal you’re working towards. This could be 1,000 paying customers, 100 new daily users, or 10% of your market.

At DuckDuckGo the current traction goal is one percent of the general search market. Achieving that goal is meaningful because at that point they will be taken much more seriously as an entrenched part of the market and everything that comes with that recognition (better deals, PR, etc.). This traction goal wouldn’t work well for most other companies because usually one percent of a well-defined market is not that significant or valuable. It works in the general search engine space because the market is so big and there are so few companies in it. This speaks to the importance of setting a traction goal that is particularly significant for your company.

These are big goals. In DuckDuckGo’s case their traction goals have each taken about two years to achieve.

The path to reaching your traction goal with the fewest number of steps is your Critical Path.

The order of your absolutely necessary milestones is your Critical Path. Once you’ve defined your critical path, it’s easy to determine the direction to go in – just follow the path! In particular, work on the first step(s) and nothing else. After these first steps are complete, re-assess your critical path using the market knowledge you just learned from achieving

Your original plan is often wrong. For example, you thought you had to build features A, B, C to get to your traction goal, but after building A and getting market feedback you realize you need to skip B and build C and D. That’s why a hard re-assessment after each step is necessary.

We’ve been talking so far about your whole company’s Critical Path. Pieces of your company have their own critical paths, from departments (marketing, engineering) down to individual people. The sum of these paths is your company’s Critical Path.

It’s important to continually define these sub-critical paths down to the individual level for the same reason as it is important to define the whole company Critical Path. Doing so forces your people to work towards the right goals in the most efficient way possible.

Defining Traction Sub-goals The importance of choosing the right traction goal cannot be overstated. Are you going for growth or profitability, or something in between?

the simple act of preparing to meet with your mentor(s) on a regular basis is a forcing function that compels you to think more critically.

According to Andrew, this traction channel is becoming increasingly important as Facebook, email, and App Stores have emerged as “super-platforms” with billions of active users. As a result, companies can go viral faster than ever before. Dropbox, Instagram, and Pinterest are great examples: each leveraged virality and these super-platforms to acquire tens of millions of users in less than three years.

viral loop in its most basic form is a three-step process: A user is exposed to your product. That user tells a set of potential users about your product. These potential users are exposed to your product and become users themselves.

Inherent virality occurs when you can only get value from a product by inviting other users.

Being first can open you up to the

opportunity to benefit the early marketing and promotion about the platform itself.