3 Ways To Get Traction Tor Your Startup
We’ve already talked about making your startup lovable with Happy Startup Canvas and today we’d like to discuss another vital matter: startup traction. According to Naval Ravikant (AngelList), traction is a quantitative evidence of market demand. It is what investors are looking for in startups and what helps you, as a founder, to identify that you should stick to your current course. In this article we are going to talk about traction method fundamentals and discuss 3 channels that will help your startup get traction it deserves.
Why Traction Is Important
Startup projects don’t make it because they fail to identify the right problem or market their solution. While the first is often caused by lack of testing with minimum viable product and pivots, the latter is often connected with spending too much time on building and not allocating enough time and resources to distribution and attracting users.
In his book “Traction: A Startup Guide to Getting Customers” Gabriel Weinberg suggests that as many as 50% of your time should be spent on gaining traction for your startup. He also offers to use a method called Bullseye framework for identifying traction channels for your company.
With Bullseye framework you focus on one traction channel at a time transitioning to another only after the first one is no longer working for you (or if it turned out that it’s not giving the desired results). But first you need to find channels to start with and test them. Here’s how to do it:
- Brainstorm traction channels by finding ideas for each of them, evaluating their probability of working for your company, estimating time needed to test them and the number of leads you can acquire through them.
- Put the ideas you got by putting them into one of the categories: Inner circle (A), Promising (B), Long-shot (C).
- Test each of the ideas in the A category. Don’t go berserk with testing — you only need to find out whether a particular idea could work for you. So don’t buy too much diversified Facebook ads. Get 4-5 and see how it goes.
- Repeat, if you haven’t found a satisfactory channel.
- After identifying what works, focus on that channel alone since in a startup cycle only one traction channel dominates at a time. You would also want to optimize it with A/B testing such as launching two different ads or posting two different types of posts about the same topic to see which one is working better.
Evaluating Traction Channels
To see if the traction channel you’re currently working with is performing as expected, monitor the following metrics:
- Customer Acquisition Cost (how much does it cost to acquire a single customer with this channel?) which is calculated as the amount of money spent on traction channel divided by the number of customers acquired. If you spent $200 on a traction channel and acquired 20 customers CAC would be $10. Is it good or bad? Well, it depends on what you’re selling. If each of those customers buys a subscription package worth $150 each, it was worth it but if you sell pro version of the app worth $7, this channel is not what you are looking for.
- Lifetime Value is a metrics showing how much the customer is going to buy from you (net profit) minus all the costs you incurred in association with that customer. You can calculate historic or predictive LTV. Historic can be used to identify the type of customers that tend to buy more and predictive is used to check whether your startup is moving in the right direction.
Read How to define the true needs of the target audience with the impact mapping tool.
Traction Channels Overlooked By Startups
In his “Traction” book Gabriel Weinberg names 19 traction channels, including SEO, viral, email and content marketing, online and offline ads, social sites, etc. Which channels to check first is highly dependent on the type of your business and monetization model but we find that these 3 channels are often overlooked by the founders trying to get traction for their startups:
- PR (publicity via traditional channels)
- Business development
- Engineering as marketing
Don’t underestimate the press coverage
In the world of tweets, snaps and Product Hunt press doesn’t seem to be that much of a deal. But remember what you do before thinking of buying something: you google. And reputable sources like Entrepreneur or Lifehacker show up at the top of your search results.
And what if you don’t exactly have an opinion on something? You mind automatically comes up with something you’ve read from a reliable media source and before you have actually developed your own opinion you rely on that source to guide you. Building relations with press is crucial to presenting your startup in the right light and helping customers to understand what is your offer about.
Wilson Peng has shared a story on getting press coverage for Daily Pulse by sending smart cold emails and being helpful. We’d like to also add a few PR tips:
- Understand what is newsworthy and what is not when preparing a press release. The launch of the unique feature is newsworthy. Your startup changing logo is not (unless you’re Uber).
- Send the right press release to the right journal. Say, if you’re creating a hardware startup aimed at making solar energy batteries available to everyone, press prelease for a popular tech journal and for a web-site covering social initiatives would be different.
- Have a press kit available either right on your website or on request. Be ready to provide any additional information to the reporter.
- Choose the right time for sending your press release. If the big event is expected that can easily overshadow your story, don’t be afraid to wait. It can make a huge difference.
Working with press helped our UARoads startup get traction. 40 website wrote about it in just a week! (Note: we were targeting Ukrainian media only.) And here’re the results of getting traction with press:
- Website traffic grew 5.3 times.
- App download grew as well: 4 times for iOS and 2.5 times for Android.
11 websites out of 40 provide statistics for their articles. According to it 12,000 users saw, liked or shared news about UARoads on Facebook. We owe success to the high quality of content we offered, newsbreak element, usefulness and... a personalized letter we sent together with the press-release. Attractive topic and short and to the point email will improve your chances to get noticed by the editor, so do work on them.
Remember about business development
Business development role is not easy: on early startup stages business person might be responsible for all things from marketing to getting customers on board. While the team is working on the product, BD specialist is meeting with people. It is especially hard on the early stages of startup development when deals can’t be closed since there’s no actual product in place and revenues can’t be generated as well but it’s the right time to:
- Better understand the ecosystem you startup is working in and how other companies are approaching a problem you solve.
- Start building relationships you will use when the startup scale.
- Determine the companies that can help your startup to reach its goal (and whom you startup can help).
Later on, when you have actually found and validated your target audience, your startup becomes attractive to potential partners. Those deals are often hard to close, especially with bigger companies, so starting early will pay off here. Check out Forbes article by Ron Hirson to learn about startup tips on closing deals with Goliaths and here’re three examples of business development done right:
- Foursquare and AMEX. In 2011 Foursquare managed to partner with American Express and offer discounts to card owners buying from a participating stores if they checked in there. Foursquare got its check-ins, American Express — increase in card usage.
- Twitter and Gnip. In 2010 Twitter partnered with Gnip and made its data available through company’s Social Media API. Gnip was able to provide Twitter statistics to its subscribers and Twitter became more attractive for companies who wanted to use Twitter but lacked analytic tools for it.
- Uber and Google. In 2016 Uber partnered with Google and now some Google Maps users see walking vs. Uber option when checking time required to get to a particular location. Uber became visible to more users and Google extended a number of transport options it provides in Google Maps.
Give something useful away for free
Engineering as marketing basically means that members of your startup team create useful tools and resources that you are giving away for free to reach more people. It can be app, widgets, libraries, addons, whatever is connected with your main product.
With free products you get in front of potential customers. They will get a sense of what your paid product feel like. We have ourselves successfully build several open source solutions and can assure you that this kind of contribution to the community pays off, both in terms of sales and publicity.
And we ain’t alone here, Fairpixels open sourced their rejected logos for anyone to use attracting attention to their main service and Crew team says that they survived thanks to their free offer. So what happened in Crew is this: the team needed quality photos for their website. Since they haven’t found anything decent and fairly-priced online, they hired a photographer and made a lot of photos in the coffee shop. After choosing the photo for the home page they have a lot of quality photos left so they’ve decided to share them with anyone who needs them and posted them online on a Tumblr blog they put together for this purpose.
What happens next is pure magic. Their Tumblr called Unsplash ends up on the first page of HackerNews and the traffic is growing for the Crew website too! Plus, a lot of people are showing appreciation for what they’ve done.
Innovative startups don’t get traction, social proof and become fundable by simply being innovative and launching a product (even though that’s how it probably look like for an outsider). Getting traction is work. Apart from doing advertising, community-building techniques, SEO and content marketing, your startup needs to:
- Work with press to get coverage in order to have influence over your startup narrative.
- Start with business development early.
- Offer useful goodies for free (widgets, libraries, media content, white books, etc.) or contributing to open source.
Have a startup idea? Contact studio stfalcon.com! We create MVP for startups as well as mobile and web apps and will be happy to help you.