Traction is the life-blood of a startup – as important (or even more important in certain verticals) than a fantastic pitch deck, great hiring, good cash-flow management, proper budgeting, an awesome product or great PR. Traction is dirty, messy, unpredictable, chaotic and ambiguous – yet it is the true fuel of a startup venture. Get your Traction Goals and sequencing right and you will feel unstoppable. Get your Traction Goals and sequencing wrong, and you have failed before you have begun.
Definition: Business traction refers to the progress of a start-up company and the momentum it gains as the business grows. There is no one way to measure traction, however, companies usually relies on customer response and revenue as indicators of their success. The reasoning behind developing traction is to grow the business while meeting specific company goals and objectives. While traction may be a seemingly abstract concept, it is important and helps a company understand where it stands in an industry and where it would like to be.
A startup is not a normal business undertaking – it is akin to Elizabethan Voyages of Discovery where intrepid crews set out into blue waters, not knowing what awaits them. They have a general idea of what success looks like, but they look to their Captain to set the course and lead them to a favorable outcome. A startup is a similar prospecting exercise, as it has be defined by Steve Blank as a temporary organization with the mandate to establish a new way of doing something that creates an entirely new business model or way to capture value. This methodology is then transferred into market after market and geography after geography, until an outcome geared to scale is achieved.
Startups are a Voyage of Discovery – and the founding team needs to be multi-disciplinary in order to handle the ambiguity and open-ended questions that they face every day. Founders establish a fundamental thesis that they get their team, investors and partners to buy into and then formulate this into a vision or set of stage-gates to accomplish. These stage-gates are the company’s Traction Goals. It’s critical for all concerned that the central thesis be a major new idea or perspective that if validated will yield major improvements, changes or disruptions to established markets and companies with an associated redistribution of value to the startup who achieves this new state of affairs. It needs to be a Big Idea.
Accomplishing the Big Idea means getting a series of Traction Goals right, quicker and better than your competition (and there will be competition), and in a more approachable way for the market to accept and adopt it. The right goal for you depends on your chosen type of company, your market strategy and how far along you are in your plans. It is the one thing that the CEO should take his time to carefully consider, and prioritize the entire organization to achieve and report against.
It could be a really big deal that you need to close, a certain active user number, a recurring sales figure or a new product launch. What makes a Traction Goal a Traction Goal is that when you reach this goal, your business will change significantly (for the better) – and your company communication should also.
The GoMetro example is when we moved from only supporting South Africa’s Metrorail to supporting all scheduled public transport in South Africa in the App – that changed our messaging and communication strategy. When we hit 200,000 users last year, we were now in a position to go to the advertising market ourselves and tell our story – hitting Traction Goals move your company forward into new space.
The importance of choosing the right Traction Goal cannot be overstated – hence the capital letters. Are you going for product launch, growth, profitability, or something in between? If you need to raise money in 12 months, how much traction do you need to do so? These are the types of questions that help you determine the right Traction Goal. Once you establish a Traction Goal, you can use it to evaluate what you should be working on. If activities are not related to achieving your traction goal, you should not be doing them. If marketing campaigns won’t move the needle, you should skip them.
The Project Manager in me has always approached Traction Goals through the framework of Critical Path planning. The path to reaching your Traction Goal with the fewest number of steps is your Critical Path.
I like to literally draw this path out, sketching the milestones we need to hit to reach our goal and the concurrent activities that are needed as inputs in the process. Once you’ve defined your critical path, it’s easy to establish the resources that are required to do the work and the associated costs and timeframes required. At this point you need to be sure you have more money than you require per Traction Goal as you are going to need it (more on that later). And then it’s time to implement. A good idea is worth nothing if executed poorly. A poor idea is worth something implemented well. Hopefully you have a Great Idea and Great Execution – but do not get ahead of yourself. Work on the first step and nothing else until that is done. After the first step is complete, re-examine your Critical Path using the knowledge you’ve gained since the last time you sketched it out. You may have to alter your Critical Path at this stage due to the new information.
Be Brave and do not hesitate to do this within the parameters of your original hypothesis – the Big Idea. This method helps you stay focused on your Traction Goal. Everything you do should be measured against your critical path and, in turn, your Traction Goal. Every activity is either on path or not. If it is not on the path, don’t do it!
The only time to deviate from your Traction Goals is when the very existence of your company is at stake or at risk. Aspirational entrepreneurs take note – there is enormous value in fighting with everything you have to ensure you have time in the market. You will need this to give your efforts and plans a little more time to come to fruition and you should do everything in your power to give your company as much time as it needs to accomplish its Traction Goals.
When we launched GoMetro in 2012, one mistake we consistently made was to underestimate how long every component of the business model would take to come to fruition due to dependencies outside of your control (usually people not replying to emails fast enough or making decisions at the speed you need them to). Activities that buy you time to resolve those externalities and get to Yes to reach your Traction Goal are worth pursuing as long as you realize that you have lost ground that you have to catch up on later. It may seem as though you are changing your direction but do not despair that you have failed – every day your company sticks around to move forward on accomplishing your Traction Goals is a win. This unplanned deviation may be in the form of pushing for a new funding round, or perhaps taking on some side-projects that provide consulting revenue, or even down-scaling your team.
Once you have accomplished a Traction Goal, remember that your company will feel different and have changed. Ensure that your internal workplace culture, your external customer communications and your market positioning reflect this changed status – or you lose a lot of the impetus and momentum a Traction Goal is meant to bring you.
GoMetro really believes in Traction Goals. We recently accomplished a Traction Goal by developing a transit mapping technology that allows us to map out all public transport routes (including minibus taxis) in any emerging market city. We proved the value of the technology by mapping out the massive Bellville Public Transport Terminal (buses and taxis) in less than 100 days and launching a map. This was a game-changer for us that has done what any Traction Goal is supposed to do – significantly changed the way we talk about GoMetro. You can read more about this Traction Goal, and see the change in our communication strategy on our blog: http://www.getgometro.com/integrated-transit-map-bellville/
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