Its all about Traction - lessons from Silicon Valley

Maybe you’ve heard that song, “It’s all about that bass, bout that bass, no treble” by Meghan Trainor, well it’s a catchy tune. What I learnt at the two-week action-packed Kingson Startup Bootcamp in Silicon Valley with Flamelink co-founder Marsh Middleton is that it’s all about Traction.

If you are looking for funding for your next big idea, be mindful that many investors in the valley are diving into the metrics, not wanting to invest in good ideas alone but ideas that show potential via traction with end-users. Traction is your gold. It will validate your efforts and reveal whether you are on your way to a solid product/market fit.

Perhaps you have heard of MVP (minimum viable product), however, in the startup world, there is growing credence for the term MVT (minimum viable traction). A good question to ask is "How can I show success with my target market?"

Here are some key metrics, which are indicators of traction for our SAAS product, Flamelink: 

• MRR & Growth Rate (Monthly Recurring Revenue and how is this growing month to month),
• Churn Rate (customers leaving your platform), 
• Addressable size of the market (working from the bottom up, how many customers can you realistically reach), 
• Lifetime Value (lifetime value is a prediction of the net profit attributed to the entire future relationship with a customer).

If you are in the SAAS market, integrating a tool such as profitwell, will automatically give you this info realtime. A nifty feature is the benchmark graphs that indicate how your metrics compare to others in your industry.

To get you started on your traction journey, take a leaf from "Traction: Get a Grip on Your Business” by Gino Wickman and ask some focusing questions:

• What is your 1-year plan? (Break your long term vision down to 1 year and make it real)
• What are your quarterly rocks? (Narrow your vision further to what really matters in the next 90 days. These rocks are your priorities)
• What are your issues? (What are the obstacles that could prevent you from reaching your targets?)

In Summary, do everything in your power to show traction. More than investor confidence it will prove to you that you have a viable business on your hands and in turn, it will give you the confidence you need to navigate the journey ahead.