What is traction?
Traction is a term that startup founders misunderstand quite often. And simultaneously, traction is the most important term because, depending on whether or not your startup has traction, it will either develop or kill it.
So, traction is MARKET evidence that somebody needs what you are doing. Talking about the market, I mean clients and startup users, of course.
According to this definition, what will be the traction for a B2B startup?
– Verbal agreement with clients about pilots/purchases (it is a bad traction, just in case)
– Letters of intent from clients
– Contracts with clients
– Money in your bank account that you received from clients
– Re-purchase (it’s almost zen)
– A number of cold requests from clients
What is not a traction for the same startup?
– Market research
– Articles in media about a startup and its founders
– Products that founders created for some reason
– A number of wasted own money on a startup
– Raised investments
– Famous and not really names of investors
What is the difference between the first and second blocks? That’s right, in the first one, the MARKET REPRESENTED BY CLIENTS shows us that it needs our product. In contrast, there are no clients in the second block. However, founders, media, etc. make a lot of ritual movements and nothing there tells us that clients are ready to buy and use our product.
And never, just never call a traction the product you’re working on!
The existence of a product is only a demonstration that your team can create a product, which is good, but it does not have any relation to the fact that somebody needs this product.
A traction can have a different depth.
For instance, the letter of intent that you received from the client is not a serious traction because your client can change his mind. And moreover, probably he had a good mood, he likes you, and this is why he decided to send such a letter.
Preorder, vice versa, is a very good traction because your client guaranteed his interest in your product with his money.
The best traction is a second purchase, since clients buy promises first, and the second time they buy value.