How to get traction for your startup?
Traction is one of the most important factors for all startup businesses. It can also be one of the toughest metrics to achieve and maintain. Without it, your venture is in real trouble.
So, just how critical is traction for your company? How do you measure it? How do you get more of it?
The Ultimate Guide To Pitch Decks
What Is Traction In Startups?
Traction means progress and business growth. In startups, it often specifically refers to the speed and velocity at which your company is growing, and is seeing improvement in key metrics.
You’ve got to have traction. You won’t survive long without it. So, it is vital to know the different ways you can get it, keep it, and craft a strong plan to make it happen.
The Role Of Traction In Startups
There are only two directions for a company, and especially startups. You are either growing or shrinking. You certainly can’t afford to shrink for long as a startup.
There is no such thing as just standing still in business. Even if you could just tread water forever, someone else is going to be surpassing you and eating up your business.
They will have the advantage of constantly compounding their gains and gaining strength. Even if you never aspire to taking over the world or raising a dime in outside funding you have to be growing.
In contrast, a business that is growing, and when a startup is able to master traction, everything else becomes easier. Everything gets exponentially better for you.
A growing business with traction is one that will attract the best talent in your space. People want to work for the winner.
If you don’t have it and are bleeding your best talent, everything will get harder and harder.
Compare that to being able to attract all of the best talent in your industry away from your competitors.
Customers see the news too. They want to align with the growing and winning brand, not the failing option. Make sure to understand how to get traction for your startup in the early stages.
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Traction is perhaps most notably important when it comes to gaining investment and fundraising. Investors demand traction. They want to see high-speed growth.
If you don’t have traction, then something is wrong. Either you haven’t found a match with your product to the market.
Or you aren’t serving your customers well enough, or just not able to manage and sustain growth as an executive team. None of those things are going to attract investment.
The reverse is also true. Traction suggests that your startup has hit product-market fit. It shows you know how to create and manage growth. That is a fantastic indicator of an investment that will be multiplied.
Even to get into a good startup accelerator, partner with strong vendors and business partners, and enroll the best advisors can all rely on traction.
How Much Traction Do You Need?
How much traction you need will depend on why you want it.
As a business, it is good just to know that you are growing in line with the overall market, economy, and benchmarks of your competitors.
There may also be specific requirements for getting into different startup accelerators and investors. That may be 10% per month. Or it could be 20% to 50% week over week in the earliest stages.
Expectations for tractions are speeding up too. Especially in anything to do with technology.
The world is an open map now, and businesses are able to grow faster than ever as more new technology enables startups to work smarter and more efficiently.
Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Ways To Measure Startup Traction
There are a variety of ways to measure and show traction for startups.
Others may be focused on specific metrics. Once you nail one, you may see others naturally benefiting from that as well.
Though, as you already know, succeeding as a startup is all about focus. Make sure you pick the traction metric which is most important to you and really hone in on that.
Make sure your whole team is centered around that, and it’s the one you consistently make all the noise about in your pitch deck and when out there fundraising.
Here are some of the common ways to measure growth in a business. You’ll need to understand them when figuring out how to get traction for your startup.
Many experienced entrepreneurs will warn newer entrepreneurs not to get too caught up in valuation. Especially when it comes to funding.
Valuation is certainly a highly volatile number to base anything on at a given moment. Yet, at some point, a startup’s valuation and stock price do become important.
It may not be the best metric for the customers or mission, but it is almost inevitable once you bring in investors or go public.
Market share is a big data point that can reveal traction or a sharp decline in it.
How much market share is considered good can vary depending on your type of company and your space.
You may just need 40% of the market to be the leader in some industries. Or you may only need low single digits to become a unicorn. In others, you may need a lot more than that.
By many traditional business measures real profits are the most important metric and in turn the most important to gain traction in.
This may not be important to all startup investors. In fact, many would happily have losses instead in exchange for more traction in other metrics.
Next to profits is revenues. That means you are bringing in real money. Customers are paying real money for what you are providing.
That is what differentiates a hobby from a real business. Plus, when you have revenues you can map a path to profitability.
If things change and you need to get profitable fast, you should be able to make planned changes to get there.
Whereas if you have only been running on a freemium model it can be hard to get profitable on the fly.
The precursor to both revenues and profits is sales. It is how many units you are selling. For this metric, it is the volume of units being sold that is important.
Regardless of whether you are bringing in $1 to $1M per sale. This can be a more telling metric if you have a product that customers are likely to buy multiples of.
Getting those sales can also mean setting up even more success as you add on additional products later.
When it comes to startups customer acquisition is often the focus of traction and the big data points used in pitch decks.
If you are punting worrying about revenues and profits down the road, then this may be the closest thing you have to show how you are really growing as a business.
Some founders like to use headcount as a proxy for traction too. It can be an indicator of how much a business is growing.
You would think that a business that is doubling its team size year over year is really doing something great.
Of course, it can also mean they are just spending a lot of money and taking on a lot of overhead. Make sure you know the difference.
Ways To Achieve More Traction In Your Startup
Grow As The Leader
If you want to grow your business, then start by growing yourself as the leader. And learn how to get traction for your startup.
For you to be able to manage your business well at the next level you have to have already evolved yourself as the leader.
Don’t be the cog in the wheel that is holding your own traction back.
Investing in constant learning, enhancing your skills in fundraising and HR. Leverage the years of knowledge and experience others have as consultants and advisors.
Content, Content, Content
The biggest and fastest-growing companies in the world are now content companies in some form or another.
They are building, maintaining, and making leaps in traction with their content. This is true even of Apple, Google, Facebook, and AT&T.
Whether it is whitepapers, podcasts, articles, blogging, social, or video, there are plenty of ways to do it. Get busy churning out more interesting and quality content.
Mergers and acquisitions are a powerful way to make big leaps in business growth fast.
They can be used to supersize and augment your traction through acquiring teams, technology, market share, branding, and the traction of other startups.
All it may take to make big leaps in traction is a few key strategic partnerships. You can do this by creating exclusive or non-exclusive agreements to sell your products.
Imagine the difference of having your product on the shelves of Walmart tomorrow. Or having Google selling for you. That means getting in front of billions of new customers overnight.
Licensing, franchising, and bundling of products with others can be ways to achieve this too. Use these strategies when looking for ideas for how to get traction for your startup.
Automation & Optimization
Sometimes the keys to scaling your traction are about improving your internal operations.
Ask how you can streamline and automate your processes. That can free up teams and resources and speed up your business so that you can handle more business.
So that you can handle more leads, close more sales, and serve customers better.
There are probably many areas of your business in which you can optimize.
Even just optimizing your advertising and website to generate more leads and improve the conversions on your current marketing spend can make a huge difference in accelerating traction.
Branding & Rebranding
Your brand alone can make a huge difference in traction and your overall results. In the early days, a lot more focus can be given to direct sales and just hustling away on selling.
Yet, the brand can make all the difference in the value and appeal of your product too. Perhaps it is time to invest more in your brand and brand visibility.
Or maybe to get to the next level you need to rebrand your startup.
Introduce New Products
Get more sales, even from current and past customers by unleashing new products and services.
You may even be able to simply create new upgrades to old models, or role out new higher and lower level pricing models to appeal to a much broader range of customers.
Are you ready for more in-depth information about how to get traction for your business? Check out this video I have put together explaining some pointers you’re sure to find helpful.
Marketing & Sales
Often traction simply comes down to your marketing and sales efforts. Maybe you haven’t really invested in a professional marketing strategy and plan yet.
Maybe you just need to ramp up and start investing a whole lot more in your monthly marketing budget.
Or you could be doing a lot better with the quality of your marketing and your funnels.
You may also want to consider ideas like offering financing to customers, including stronger calls to action, investing in making sure your customer service is more responsive, and be more intentional about wielding the power of the press.
Recast Your Goals
When was the last time you reset and scaled up your goals? When was the last time you spent time casting the vision for your teams?
This, and assessing any need to upgrade your infrastructure and organization is just as important to traction as simply wading in and trying to grind it out.
How to get traction for your startup? Traction is vital for startups and businesses of all sizes.
You have to grow, or die. As a startup, being able to show strong and consistent traction will make or break you.
It will determine the talent you have on board, influence your customers, and be a pivotal factor in getting funding.
Check out these ways to measure and achieve more traction for your own startup.
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