Nothing matters but traction. It makes everything easy, but it is the hardest to accomplish.
Too many entrepreneurs focus on working around a lack of traction when they would be better off using that energy to get traction.
A common occurrence is that an entrepreneur comes to me asking for money.
“I need money for marketing so I can get traction.”
Alas, that’s exactly backwards. If you have traction, then raise money to increase your marketing.
My advice to those entrepreneurs is clear and consistent: “No one will invest in a startup without traction unless the entrepreneur has already been wildly successful. For first time entrepreneurs, that means no one will invest in your startup without traction. Period.”
Despite this, some entrepreneurs will persist. They’ll want to show off their product, or try to prove why their company will dominate once it launches.
Fine, I reply, if it’s that good, just launch it, and you’ll get the traction you need.
There is no short cut. Get traction before you try to raise money.
The art lies in figuring out the cheapest way to generate compelling evidence of traction. I’ll leave that for a future post!
It's actually pretty surprising how many entrepreneurs need to hear this. I get asked all the time why my company haven't raised money yet, and I have to tell them that without a track record I need to prove the idea fairly completely for anything more than small seed money.
And since we have a hardware component, we are presented an interesting challenge there. Thanks in advance if you address that twist in your upcoming traction post.
What makes for good traction?
What if the company is all wireframes and ideas. Does it count as traction if industry leaders sent e-mails of support? ("Yes, I want that product.") Or if some number of people signed up for pre-release information?
Or do you need the product to be built, launched, and ready to scale?
Great post Chris, thanks.
Thanks for the comments. I'll try to have the follow-up post up in the near future!