Traction: How Any Startup Can Achieve Explosive Customer Growth

by Gabriel Weinberg

Traction is the best way to improve your chances of startup success.

The key to good search engine optimization (SEO) is getting links. As you will read later in the SEO chapter, you need a strategy to get these links in a scalable way.

A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup.

After interviewing more than forty successful founders and researching countless more, we discovered that startups get traction through nineteen different channels. Many successful startups experimented with multiple channels until they found one that worked.

Chapter 3 presents our framework for getting traction called Bullseye. Essentially, it involves targeted experimentation with a few traction channels, followed by laser focus on the core channel that is most promising.

The number one reason that we pass on entrepreneurs we’d otherwise like to back is they’re focusing on product to the exclusion of everything else. Many entrepreneurs who build great products simply don’t have a good distribution strategy. Even worse is when they insist that they don’t need one, or call [their] no distribution strategy a “viral marketing strategy.”

If you follow the 50 percent rule from the beginning, then you will have the best chance of avoiding these traps. If you don’t, then you risk realizing you’re in one of these traps too late to do anything useful. Unfortunately this happens to a lot of companies postlaunch. The sad thing is that often these products and services are useful, but the companies die because they don’t have a good distribution strategy.

You can think of your initial investment in traction as pouring water into a leaky bucket. At first your bucket will be very leaky because your product is not yet a full solution to customer needs and problems. In other words, your product is not as sticky as it could be, and many customers will not want to engage with it yet. As a consequence, much of the money you are spending on traction will leak out of your bucket. This is exactly where most founders go wrong. They think because this money is leaking out that it is money wasted. Oppositely, this process is telling you where the real leaks are in your bucket (product). If you don’t interact with cold customers in this way, then you generally spend time on the wrong things in terms of product development.

Startup growth happens in spurts. Initially, growth is usually slow. Then it spikes as a useful traction channel strategy is unlocked. Eventually it flattens out again as this strategy gets saturated and becomes less effective. Then you unlock another strategy and you get another spike.

Put half your efforts into getting traction. Pursue traction and product development in parallel, and spend equal time on both. Think of your product as a leaky bucket. Your early traction efforts are pointing you toward the holes worth plugging.

Poor distribution—not product—is the number one cause of failure. If you can get even a single distribution channel to work, you have great business. If you try for several but don’t nail one, you’re finished. So it’s worth thinking really hard about finding the single best distribution channel.

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.

How much will it cost to acquire customers through this channel? How many customers are available through this channel? Are the customers that you are getting through this channel the kind of customers that you want right now?

If, unfortunately, no channel seems promising after testing, the whole process should be repeated. The good news is you now have data from all the tests you just did, which will inform you as to what types of things are, and are not, resonating with customers. Look at the messaging you’ve been using, or dig deeper to see at what point each channel failed to deliver customers. If you go through the process several times and no traction channel seems promising, then your product may require more tweaking. Your bucket is still too leaky.

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

For example, offline ads is a traction channel, and billboards, transit ads, and magazine ads are all channel strategies within offline ads.

How much does it cost to acquire each customer through this channel strategy? How many customers are available through this channel strategy? Are the customers you are getting through this channel the ones you want right now?

At a minimum, include the columns of how many customers are available, conversion rate, cost to acquire a customer, and lifetime value of a customer for a given strategy.

Most channels will yield you some customers, and so they are all tempting to some degree. The operative question then is, “Does this channel have enough customers to be meaningful?” A simple spreadsheet calculation can go a long way!

Once that is defined, you can work backward and set clear quantitative and time-based traction subgoals, such as reaching one thousand customers by next quarter or hitting 20 percent monthly growth targets. Clear subgoals provide accountability. By placing traction activities on the same calendar as product development and other company milestones, you ensure that enough of your time will be spent on traction. We hope it is at least half of your time!

In DuckDuckGo’s case, the traction goal was to get to 100 million searches a month. The team believed the milestones they needed to hit included a faster site, a more compelling mobile offering, and more broadcast TV coverage (from the publicity traction channel).

In other words, Critical Path is a framework to help you decide what not to do. Everything you decide to do should be assessed against your Critical Path. Every activity is either on path or not. If it is not on the path, don’t do it!

Dropbox used to hold a similar contest with its annual Dropquest competition. In Dropquest, users who successfully completed an intellectually challenging online scavenger hunt were rewarded with online recognition, Dropbox-themed items, and free Dropbox packages for life. In the first year of the competition, almost half a million people went through the quest.

Hipmunk has run similar events, like its Mother’s Day Giveaway. For this promotion, company staff asked customers to tell them why they love their mothers more than Hipmunk. They received hundreds of submissions via Twitter and sent flowers and chocolates to the moms of the lucky winners. For $500, Hipmunk generated a lot of attention, increased its follower count, and made several customers (and their moms) Hipmunk fans for life.

Hipmunk has run other contests as well, including flying customers home for Thanksgiving and hiring a cartoonist to draw “chipmunked” versions ...

It may surprise you to learn how effectively you can target customers through direct mail. You can build up a list of customers on your own or buy a list from a mailing organization. Simply do a Web search for “direct mail lists” to find companies selling such information. Beware that buying lists can be perceived as spammy, and can be a complete waste of money if they are untargeted.

The best infomercial marketers will often test their messaging, calls to action, and bonuses by running radio ads in advance, seeing what works well, and then incorporating those bonuses and messages into their commercial.

They have a lot of landing pages. You can see what types of pages they are producing by searching site:domain.com in a search engine. For example, if I wanted to see how many landing pages Moz has created targeting long-tail keywords, I could search site:moz.com and get a sense of how many landing pages they have.

Rand suggests using infographics, slideshows, images, and original research to drive links, as these are all things people naturally share.

Email marketing is a personal channel. Messages from your company sit next to email updates from friends and family. As such, email marketing works best when it is personalized. Email can be tailored to individual customer actions such that every email communication is relevant.

Any sort of communication telling your customers how well they’re doing is likely to go over well. Patrick McKenzie, whom we interviewed for SEO, calls this the “you are so awesome” email.

For feature-based freemium products, emails that explain a premium feature a customer is missing out on can have high conversion rates. For example, if you run a dating Web site, you can explain that upgrading to a premium plan will lead to more dates. If you have a subscription product, ask them to upgrade to annual billing, which guarantees they will not cancel within the next year.

Timing is especially relevant to get higher open rates: many marketers suggest sending emails between nine a.m. and twelve p.m. in your customer’s time zone or scheduling emails to reach them at the time they registered for your email list (e.g., for people who signed up for your list at eight p.m., email them at eight p.m.).

Here are some of the more common items to test and optimize: Button vs. text links Location of your call to actions Size, color, and contrast of your action buttons Page speed Adding images Headlines Site copy Testimonials Signs of social proof (such as pictures of happy customers, case studies, press mentions, and statistics about product usage) Number of form fields Allowing users to test the product before signing up Ease of signup (Facebook Connect, Twitter login, etc.) Length of the signup process (the shorter you can make the process, the higher your conversion percentage will be)

Andrew mentioned that he sees companies making the same mistakes: Products that aren’t inherently viral trying to add a bunch of viral features Bad products that aren’t adding value trying to go viral Not doing enough A/B tests to really find improvements (assume one to three out of every ten will yield positive results) Not understanding how users are currently communicating/sharing, and bolting on “best practice” strategies (Just add Facebook “like” buttons!) Not getting coaching/guidance from people who’ve already done it Thinking about virality as a tactic rather than a deep part of a product strategy

HubSpot, a marketing automation software company, has reached tens of millions in revenue in a few short years. One key to its success is a free marketing review tool the company created called Marketing Grader.

Another company that nails engineering as marketing is Moz, the leader in SEO software. Two of its free SEO tools, Followerwonk and Open Site Explorer, have driven tens of thousands of leads for Moz. Like Marketing Grader, each solves a problem that an ideal Moz customer has. Followerwonk allows people to analyze their Twitter followers and get tips on growing their audience. Open Site Explorer allows people to see where sites are getting links, which is valuable competitive intelligence for any SEO campaign.

One way to boost your efforts in this traction channel is to take advantage of cyclical behavior. Take Codecademy’s Code Year microsite, which launched at the beginning of 2012. Many people claim to want to learn how to code, but don’t follow through. Code Year addressed that issue by asking people to enter their email address to receive a free lesson about programming each week during 2012. More than 450,000 individuals signed up on CodeYear.com, nearly doubling Codecademy’s user base at the time.

To really maximize impact, put your microsites and tools on their own domains. This simple technique does two things. First, it makes them much easier to share. Second, you can do well with SEO by picking a name that people search often so your tool is more naturally discoverable.

In the case of querymongo.com, RJMetrics built a tool that translates SQL queries to MongoDB syntax (two database technologies). This is useful for developers or product managers starting to use MongoDB but who are still more familiar with SQL. It also drives leads for RJMetrics, because anyone doing data analysis is a potential customer for its main product. Querymongo is RJ’s highest-trafficked microsite and drives hundreds of leads per month.

Building noteworthy tools that your target audience finds useful is a solid way to gain traction that also pays dividends down the road by helping build your SEO. A simple roadmap to executing this technical strategy includes: Providing something of true value for free, with no strings attached. Making that offering extremely relevant to your core business. Demonstrating that value as quickly as possible.

PayPal, the leading online payments platform, used a similar strategy when it targeted eBay users as its first customers. In the beginning, PayPal itself purchased goods from eBay and required that the sellers accept payment through PayPal. This worked so well that PayPal proved more popular than the payment system eBay itself was trying to implement!

Final tip: picking a killer venue is one of the best ways to bag high-profile people. Everybody loves to eat somewhere hot. However, sometimes a dinner can be too expensive for an early-stage company. So why not go in on the dinner with two other companies? That way you’re all extending your networks and splitting the costs.

Schedule meetings and dinners ahead of time. Identify your top targets and find a way to engage them individually at the show. Investigate the efficacy of shows before committing. Attend shows this year you might want to exhibit at next year. Reach out to previous exhibitors. Have an inbound and outbound strategy for your booth. Do something proactive and creative. Include a strong call to action on every item you give out.

Eric Ries wanted to broaden the audience for the Lean Startup principles he was promoting on his blog. However, he was afraid his message would get lost at a large conference like SXSW. Instead, he organized his own conference and invited founders of successful companies to talk about how Lean principles worked in their startups.

To get traction through offline events, Enservio went all out to organize the Claims Innovation Summit. They held it at the Ritz-Carlton in beautiful Dove Mountain, Arizona, for multiple days. They made sure the event didn’t feel like a sales pitch for their services. Instead, they pulled in prominent figures from major consulting firms, respected individuals in the insurance industry, and founders of hot startups to come speak. They then used this group of speakers to attract the industry executives who were their prospective customers. Not only could the executives learn from the speakers, but they could network and vacation at the same time.