Book review on Traction:A startup guide to getting customers. An entrepreneur’s perscpective
Traction: A Startup Guide to Getting CustomersTraction is the best book on marketing strategies for tech startups that I have read. I have even considered adding it to our library at the Goshen Institute. Technology entrepreneurship and marketing in that space has interested me for a very long time. Most of the marketing books out there are focused on selling offline products and services but thank God for Marc Ioli for steering me towards Traction. I read this book strategically using my inspectional reading template before I read it the regular way.
Context
I wanted to know more about marketing in the tech world and how what strategies growth hackers are using to build billion dollar businesses in Silicon Valley and other parts of the world. Remember that most of my business reading is a search for value that I can give not just to the entrepreneurs I consult for but for the businesses I run. Authors The authors are both founders of tech companies. Gabriel is the CEO and founder of DuckDuckGo; an alternative search engine to Google and Justin run growth for a company that recently got bought by Rackspace.
Value of the book and my notes The book’s real value is in the strategies(traction channels) and real life testimonies from entrepreneurs and founders who have made money using these methods. The book highlights that
“Traction is a sign that your company is taking off. It’s obvious in your core metrics: if you have a mobile app, your download rate is growing rapidly. If you’re a search engine, your number of searches is skyrocketing. If a SaaS tool, your monthly revenue is blowing up. If a consumer app, your daily active users are increasing quickly. You get the point.”
Traction trumps everything. If you are not thinking about growth then you are probably distracted by something less important. Do not major on the minors, concentrate on getting results. The Bulls Eye framework is to traction what the Lean Startup framework is to product development. This works by picking a traction channel and testing it on a small group of customers. If it achieves the desired result then repeat. If it does not then consider trying another approach. Do not waste time on a traction channels that does not move the needle far enough for it to matter. It’s absolutely important to always have a traction goal that the whole business is working towards. This could be 1 million appstore downloads, 10000 active monthly users or 50% of the market in 10 months or less. Choosing the right traction goal is highly dependent on your type of business because it should align with your overall strategy. Reaching your traction goal should have a significant impact on your business such as profitability or double digit market share. (I talk more about market share and monopoly at this post.)
Examples of traction channels are
A summary of three of these traction channels are : 1. Sales This is the process of generating, qualifying and converting leads in paying customers. Your first customer is usually someone you know. Stuff to think about What’s the process — How does the company buy products or services like yours? What’s the need — Is there a serious need for the product/service/solution we are offering? Who has the authority? — Which individuals in the company have the authority to make the purchase? In consulting we call this the buyer. This is the individual who usually authorizes these purchases. How much money? — Does the prospect have the funds to buy what we are selling? How much will not solving this problem cost them? It is important to have the answer to the second question because it is something you should absolutely add to your pitch. Telling me “Jeffrey, by not using our company’s offering, you are leaving $1million on the table every month”, will definitely perk up my ears. What is the time commitment? — What budget are we looking at? How long is the sales cycle? When will the decisions be made?
2. Affiliate Marketing An affiliate program is where you (as an individual or company) pay people or companies to perform certain actions (such as making a sale or getting a qualified lead). For example, whenever you see Marie from Hello Sassy Naturals recommend a product, there is a chance that she is going take a cut when there are sales through her blog. In this case Marie is the affiliate. Companies like Macys, Zappos, eBay, Amazon, and Netflix use affiliate programs to drive what the book says are significant portions of their revenue. It is said that, affiliate programs are known to be the main traction channel for many ecommerce stores, info products and membership programs. You can also have affiliates selling or getting you leads by giving them a cut whenever they provide such services. Websites such as Clickbank and Gumroad have become a goldmine for thousands of affiliates worldwide. Some of these affiliate marketers receive over $1 million dollars a year by selling other people’s products to their list of leads. Some affiliate marketers have hundreds of thousands of prospects waiting to be marketed to. A VP of growth at a public company worth over $100 billion once suggested that I look seriously at affiliate marketing since it holds such good rewards and is a crash course on marketing online. James Idayi is also an expert in the field.
3. Business development This is almost like sales BUT with one key distinction: the primary focus is to exchange value through partnerships, whereas most sales focuses primarily on exchanging legal tender (dollars or cedis etc) for a product or service. Sales is focused on selling to the customer, whereas BD is partnering to reach customers in a way that is mutually beneficial. Google used BD early on to gain traction. They did this by partnering with Netscape to be the default search engine in the browser and also with Yahoo by powering their searches.
Conclusion Traction: A Startup Guide to Getting CustomersThe book deserves 4 out of 5 stars for focusing on the reason most people will pick it up. There is less than 10% of fluff in my opinion and it reads more like a textbook than a business or marketing book. If your goal is to learn how to market in this digital age or if you desire to work in sales, BD, marketing or growth at a startup, this is a must read. You can get it Traction: A Startup Guide to Getting Customers here. Have you already read Traction: A Startup Guide to Getting Customers?
Do you recommend any other books on marketing for startups in this digital age?
Originally published at www.growingstartup.com on July 1, 2015.
