Traction is the 3rd in all the levels of any startup business. Traction simply means to have a set of clients who can potentially serve as an investor for your startup to gain movement. This is the stage that can decide the future of the popularity your startup might get.
Making progress in your ventures; getting attention for your products; all fall under gaining traction. In terms of business, traction indicates that you are gaining momentum and moving from your stagnant spot. So, how can you gain traction for your startup?
That is exactly what we will be providing insight into through this article.
What is Traction for a startup?
Startup businesses are basically entrepreneurial ventures that are just starting in their journey of reaching each milestone of any successful business company. Gaining traction for startup initiatives takes hard work and perseverance. It is necessary to do research and decide on target clients and markets.
Traction gains your customers and users. It gets you people who are interested in your company and your products. Traction is necessary because it is bound to get people to talk about your innovative solution to the identified problem.
All startups start from a similar point but they do not end up at the same point. While there is a wide variety of businesses and enterprises, the basic factor remains the same- finding investment opportunities and earning back the revenue. Traction is a major concept here that may just be the very thing that helps you reach from point A to the next.
Having a concept and the inception is easier than the rest of the race to survive in today’s competitive market. If people do not know about your product and your innovation, how are they supposed to impact your fundraising and attract more clients as well as investors?
Therefore, it is safe to say that traction works as the water for your seed of a business.
Significance of Traction for Your Startup
The vitality of traction is most important to remember. There are a myriad of reasons to keep an eye open for potential traction since the conception of your startup. With the limitation of budget and availability of resources, it is tough to see a way out of the obstacles and to proceed and focus on the business and the products itself.
Rome was not built in a day. No successful businesses are built in a day either. There is no such thing as an overnight success. That is where traction helps you pave the road towards your goal.
Development and Conceptual Proof
Traction is the evidence of your startup having evolution and growth. Any business goes through a growth and shrinking process. But it is a curve which fluctuates. What determines the success rate is how much difference there is between the earlier stages and to the point you may count your business in the present time.
Traction is not only proof of the fact that your innovation and entrepreneurial venture really works, it is also a validation to you. It is necessary to know that there is an actual demand for the innovation and product you are working hard for. This also indicates that you can make this startup into an actual business.
Recruitment
Recruitment is a crucial stage for any startup business. It so happens that in the labour market, employees’ to-be search for a job that has the highest wages for the talents and skills they offer. The problem is, startups mostly cannot afford to pay their employees high wages because of a lack of funding.
That is where negotiation comes in and also other factors. Startups then take the risk of taking in new recruits with no to low experience but filled to the brim with potential talent. So, it takes a leap of faith for both parties.
Raising Fund
From the earliest to every other stage of a startup business, funding is mandatory. Seed money indicates the basic investment that starts the business up. Then comes in the angel investors. Angel investors are mostly the primary investors of a startup company; they are mostly acquaintances and family of the entrepreneurs themselves.
There are also many angel investment networks now. These firms help budding entrepreneurs and their potential businesses start their ventures. Gaining traction then helps the newly conceived company to move towards major investment and expansion projects.
Variations of Traction
Although the general term covers what it means to have traction for a startup, there happens to be several types of tractions.
Possibility of Gaining Profit
Profitability is one of the best types of traction. It is easier to show and to achieve any real business should have the primary goal of earning as much profit as it can.
Profitability is also the end goal and peak of validation. It asserts that you are moving in the right way. It is also an indication that you are holding your success in several other areas of the initiative that you took. It is also important to see the improvement in the consistency of earning higher profit margins.
Amount of Revenues
Revenue is one of the most critical factors involved in a startup before earning profits. You need to gain revenue because otherwise, you will not earn profits anyway. The cash flow is missing here. It is not possible or okay to keep paying bills while being on a payroll.
Without traction in revenues, growth, and expansion of your business is next to impossible. Other capital injections are necessary here. Traction is very important to show in these cases. If you have revenues but no profits, you could rise back to profitability.
Traffic Generation and Engagement
Another metric of traction is the ability to track and control traffic. It’s a forerunner to set everything else in place. With the help of traffic, you can acquire all kinds of revenues and profits.
While it is thought to be easier to generate traffic, in reality, that isn’t the case. But gaining traffic and engagement from your clients and users is necessary to gain traction for your startup.
Number of registered users and active users
User numbers have proven to be an impactful metric. The lack of revenue or engagement can definitely use the increasing count of registered and active users. This could be a good factor to highlight in terms of understanding the market for your startup.
The reason why it matters that you have a registered user versus active user analysis is that you can track why people are registering your product and how many are actively using it. Active users indicate that your startup business has been found intriguing and they are interested to take action to register.
Of course, activeness does not imply the direct relevance of the clients, profit margins, or revenues. The ratio of registered and active users has a lot to do with engagement in your business.
Otherwise, it just seems like a huge liability. It is possible to crunch up the extensive distinction in the numbers. It is even better if the majority comes involuntarily.
How Can You Gain Traction for Your Startup
Once your startup business is up and running, you need to make sure that your target market and clients know about it. It is difficult but obviously not impossible to figure out the ways to bring in primary users for your business.
The following measures may help you there-
Build the perfect product
I know how it sounds. No product is perfect on the first try. There are bound to be a lot of hurdles. But why should that mean that you must hold back? You should work on the flawed but potential product and build on it.
For instance, Elon Musk created Tesla and he did not have to advertise it as well as any product is supposed to be advertised at a minimum level. He didn’t even launch the product but had a demonstration that got the market to start talking about it.
Therefore, your products could definitely use having that “awe” effect with it that gets the introduction done by itself. But keep testing it for improvement before you officially launch.
Branding
Branding implies directly the ways of your marketing strategy. Your products are not only the product you are offering, it is what you are selling. Allow me to elaborate.
Branding or marketing yourself, as well as your product, means using the means of influence to actually influence the target market and its members (users, clients, participants). It doesn’t only mean managing the dos and don’ts. It also implies creating logos, creating a website design as well as a presence in social media.
Kevin Barber, states your “brand is the experience you deliver customers.”
A slogan or a light-hearted yet memorable or catchy marketing strategy like Nike’s “Just Do It” can be really good for your business and help you gain traction.
Do not Scale
Paul Graham wrote: “One of the most common types of advice we give at Y- Combinator is to do things that don’t scale.”
You need to push your product and your company manually rather than waiting for something to happen. Stripe, the financial services company (Fintech) had great potential with its app. But the company went in too strong and recruited users too early. NASDAQ has called it “The Internet’s Most Undervalued Company”
Chasing email leads, marketing through newsletters, and advertisement- whatever could possibly get your startup the edge. It is necessary to do whatever it takes to help your startup get a lift-off. You may worry about the amount of time it takes but plenty of smart strategizing and work can make it happen.
Get Partners
Partnering up is given in startup ventures. It is a known fact that joining forces with already established brands can gain traction for your own startup.
In business, fame is considered to be a valuable asset. So, it helps your brand to team up with another well-known brand with a similar consumer pool and automatically start gaining fame as well, thus getting more traction.
Hence, “How can you gain traction for your startup?” simply put, the answer is, to get busy and fully committed and with a little bit of perseverance. You need to have hope and trust the process.
It isn’t always necessary to colour within the lines of corporate strategies. You can obviously attempt unique and unusual strategies to gain traction. That takes a little bit of thinking out of the box and looking from a different angle. So, why not go for it?