When does a startup have "traction", anyway?
When we think about startups and traction, the first thing that comes to mind is sales. After all, that's the ultimate traction we're looking for. But what about when revenue isn't the right metric yet?
We often think of startup traction in a fairly limited way: are customers buying our product yet?
In the strictest sense, this is the traction that ultimately matters, because it answers the fundamental hypothesis we set out to prove: are we delivering the right product to the right customer in the right way at the right time for the right price?
Yet, built into the Lean Startup ethos is the idea that the important things to measure in an early innovation effort aren't the things we find on financial statements. It's not sales; not yet.
Stepping back, we can think of traction like the automotive metaphor from which it comes: is the rubber grasping the road with sufficient friction to propel the vehicle forward? To limit traction to only the growth stage of the startup lifecycle implies no forward momentum prior to that point, but that's ridiculous. We've made lots of progress — just not sales.
We need a broader definition of "traction" that allows us to measure the progress we're making in the marketplace, regardless of our stage:
Traction is the acquisition of compelling confirmatory data in support of the most important business model hypothesis.
Late in the startup lifecycle, the most important hypothesis is that people will buy it, and so traction is sales. It's customer acquisition. It's market share. Duh.
But all the way at the start of the journey, the most important hypothesis might be that the problem we're trying to solve is important to the customers we want to serve. Early traction might look like qualitative research showing the intensity of the pain our customers experience. Traction is compelling evidence they really want us to solve this problem.
Later in the journey, that critical hypothesis might be whether our solution or value proposition resonates. In that case, traction might be pre-revenue customer acquisition (e.g. from a landing page offer).
In short, wherever we are, let's measure the next link in the chain of milestones that, if they all hold, will result in that ultimate market domination we're seeking.
So, what's the most important hypothesis for this moment in your innovation effort? What's an assumption about your business model that is the least supported by data and the most harmful if wrong?
That's what you need to test, and that's where you'll find traction.
Published 8 months ago
Josh David Miller
Managing Director // The Right Box
JDM is the founder of The Right Box, where he facilitates the process of innovation with startups and Fortune 100s alike. He and his team help get new ventures to market, innovate on business models, and establish a culture of intrapreneurship. JDM spends his free time as a startup ecosystem builder, connecting founders and funders in the Sacramento area — where is known as that guy wearing unusually colourful shoes.