What If Getting Traction For Your Startup Was This Easy?
This story originally appeared in my book club. Since I recently sold the company I launched at 19 years old — we did $5m in sales and raised $2.5m in VC- I’ve shifted my focus to reading a book a day. Join my book club now to see what a 26 year old with one exit under his belt is reading.
There are way too many “wantrepreneurs” in silicon valley raising millions of dollars without a single dollar in sales.
That money should be going to smart thinkers who have revenue, and Traction.
It’s Thursday morning here in Austin and I just finished reading this book called Traction: A Startup Guide to Getting Customers
The book is super strategic and breaks down 21 specific ways to get traction for your business.
Click here to buy the book on Amazon now.
Here are my 3 big lessons.
Hitting the Bullseye
To find the channel that will get you traction, start with a naive brainstorm. Keep your mind totally open and simply list as many growth channels as you can in 5 minutes.
Do that now.
Ok, now rank them into three categories:
A Inner Circle: Which channels seem most promising?
B Potential: Which channels seem like they could possibly work?
C Which traction channels seem like long-shots?
Lastly, prioritize and test each channel. Set yourself a finite budget and sample size (Eg: I’m spending $100 on Facebook Ads with goal of getting at least 100 clicks as sample size which’ll help me determine if I can profitably acquire customers in this channel).
That’s how you find your bullseye traction winners.
Bright Spot Expansion
“The number one reason we pass on entrepreneurs we’d otherwise like to back is they’re focusing on product to the exclusion of everything else” — Mach Andreesen, founder of Netscape and VC
Spend your time building product and testing traction channels in parallel. When you see a channel that has a bright spot, double down hard.
This is where most entrepreneurs miss the boat. Something works, and they wait until their friends tell them how smart they are (or worse, they build a freaking infoproduct around the success and sell the infoproduct instead!).
When you hit a bright spot, triple your time and money investment and exploit it. It will not last forever. Remember what AOL did when the company realized they could use frozen steaks to get people on the internet.
Traction Trumps Everything
Traction makes board meetings smoother, team members happier, and customers more sticky.
The book highlights 21 potential traction channels for you but reminds you that you must qualify which ones work for you and hone in. Using the viral coefficient to do that is a smart approach.
The viral coefficient (K) is the number of additional users you can get for each user you bring in.
For formula is: K = i * conversion percentage
where K is the viral coefficient, i is the number of invites sent per user, and conversion percentage is the number of users who sign up after receiving the invitation.
For example, if your users send out an average of 3 invites and 2 of those people usually convert to new users, your viral coefficient would be:
K= 3 * (⅔) = 2
If you were to add 100 users in a week, you could expect them to send out 300 invites and 200 more users to sign up for your platform as a result. That’s viral growth! Anytime K is greater than 1 you have viral growth.
Those are my 3 big takeaways.
Click here to buy the book on Amazon now.
If you liked these book notes, you’ll probably like these too:
Billionaire Red McCombs: “You Either Make Dust, Or Eat It”
The Most Persuasive Man Ever That You’ve Never Heard Of
Hey there! Quick favor: if you click that heart ❤ button below, it means more people will see these lessons for free. Would mean the world to me. Thanks! -NL :)
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