What is traction for a startup?
There is a lot of talk about it out there online and in startup circles. You know you need it. Yet, there is a lot of confusion about it. Why is traction so important? What does it really mean? How can you get it?
What Does Traction Mean For Startups?
When you are figuring out what is traction for a startup, note that at its most basic ‘traction’ means making progress or getting attention. Going deeper into the dictionary it can mean gaining a grip and pulling something forward. Like putting snow chains on car tires or using a tractor to pull a stuck vehicle. It means progress, but also often progress that you have to create and use the right tools and techniques for.
When it comes to business, traction means you are getting somewhere. You are really gaining some momentum and moving along.
Via Entrepreneur.com, angel investor Martin Zwilling defines traction as “evidence that your product or service has started that hockey- stick adoption rate which implies a large market, a valid business model and sustainable growth.” For investors that shows “that the dogs are eating the dog food, and your financial projections are not just a dream.”
Clearly, every entrepreneur and business owner wants traction. Though it is not just nice to have a bonus. It’s a must.
Traction will be a must of your story as well if you are looking to raise capital. When it comes down to fundraising keep in mind that it is all about storytelling. For a winning deck, 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.
Why Is Traction So Important For Startups?
When figuring out what is traction for a startup, remember that traction is vital for a variety of reasons.
In life and business, you are either growing or shrinking. You can’t just maintain the status quo or stay static. If you try, you’ll soon be surpassed by someone else. Traction is evidence that you are really progressing and growing.
Proof Of Concept
Traction is proof of your concept and business idea. In the early days, this isn’t just about proof and evidence for investors and partners, or your team and cofounders, it is for you too. It is validation that there is a real demand for your product or service and that there may actually be a real business here.
A Path To Revenue & Profits
Many types of traction are a sign that you are on a path to revenue and profitability as part of understanding what is traction for a startup. Today, this is more important than ever. Big goals and going fast can still be great, but more than ever founders and all those around them are recognizing that revenues and real profits are vital and sexier than ever.
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