“Almost every failed startup has a product. What failed startups don’t have are enough customers.”
Traction by Gabriel Weinberg and Justin Mares: Short Summary
All successful startups have a story involving millions of customers and insane valuations. But what separates the successful from the rest? Traction by Gabriel Weinberg and Justin Mares is a book that shares secrets of what makes some startups experience massive growth while others die out. They identify 19 traction channels that, if properly utilized, can lift any startup to stardom.
Traction: The sign that your company is taking off based on quantitative demand.
The goal of a startup is to grow rapidly. To get traction, you need to move your growth curve as rapidly as you can.
The pursuit of traction defines a startup.
The 19 Traction channels:
- Targeting blogs. Examples of startups that targeted blogs include Reddit, Code Academy, and mint
- Publicity. This involves getting your name out there with the help of traditional media, TV, media, and so on
- Unconventional PR. Includes publicity stunts that garner attention Richard Branson of Virgin Group is known for his publicity stunts
- Search Engine Marketing. Involves advertising to consumers who use search engines
- Social and Display ads. These include Facebook ads, Reddit ads, Youtube ads
- Offline ads. These include radio spots, TV spots, billboards, flyers, and newspaper
- Search Engine Optimization. Making sure that the website shows up for key search results.
- Content marketing. Using blogs to gain an audience and to market a product
- Email Marketing. Sending emails to prospects
- Engineering as marketing. Microsites, widgets, and free tools that drive thousands of leads a month e.g. Hubspot
- Viral marketing. Growing the customer base by encouraging other customers to tell their friends and family
- Business development. An example of business development is a strategic partnership with an established brand
- Sales. Creating processes that directly exchange the product for dollars
- Affiliate programs. Cost-effective profit-sharing programs that allow companies to reach hundreds of thousands of people
- Existing platforms. Leveraging the power of mega-platforms such as Facebook
- Trade Shows. Gives opportunities to specific companies to show off their latest projects
- Offline Events. Meetups and conferences can get you traction for your product
- Speaking engagements. Speaking engagements can raise a startup profile
- Community building. Forming passionate users and communities. Examples include Stackexchange and Wikipedia
Almost every failed startup has a product. What they don’t have is customers.
“Having a product or service that your early customers love, but having no clear way to get more traction is a major problem. To solve this problem, spend your time constructing your product or service and testing traction channels in parallel.”
Traction and product development should get 50-50 of your time. This might slow the product development timeline but it will help product sales in the future.
Before setting to get traction, begin by defining your traction goal.
From the perspective of traction, working on a product happens in three phases:
Phase I – Making something that people want
Phase II – Marketing something people want
Phase III – Scaling the business
“The better your prospective investors understand what you’re doing, the less traction they will need to see before they invest because they are more likely to extrapolate your little traction and believe it could grow into something big. On the other hand, those investors who have little real-world experience within your industry may find it hard to extrapolate and may demand more traction initially before they invest.”
Brainstorm every single traction channel to see which one works for you. Start by imagining what success would look like for each traction channel, and write it down in your outer ring.
“Compile your brainstorming ideas for each traction channel in a spreadsheet with educated guesses that you can confirm through testing. Even after you’ve chosen your core channel, you should keep these ideas around for future runs of Bullseye.”
Run cheap traction tests in the channels that seem most promising. These tests should ideally tell you how much it would cost you to acquire customers through a specific channel.
Find the most dominant channel in terms of customer acquisition. Quantify your marketing efforts especially when deciding the traction strategies that you need to pursue.
Always have an explicit traction goal that you are working towards. The goal should align with your business strategy.
The path with the least number of goals is the critical path. Enumerate the intermediate paths to get to your traction goal.
Actively work to overcome your channel biases. As a startup founder, you are likely to think more favorably of some traction channels over others.
If you are unsure of which traction channel to use, seek a mentor to help you with the choice.
The best way to get publicity is to start small. Focus on small sites especially if you want large media outlets to find your story.
Build relationships with reporters who cover areas of your startup market.
When you make a pitch, keep it short, and sweet. Avoid large blocks of text and create an eye-catching email header.
Search Engine Marketing
Use search engine ads to test the right product positioning and messaging. Don’t expect early profit from search engine ads. You can only get the full picture after a few weeks.
Measure conversion so that you can test SEM variables against profitability. Areas to test include keywords, ad copy, landing pages, demographic targeting, and CPC bids.
Use longer keywords (also know as long-tails in SEO). They offer less search volume but they are less competitive and it is clearer what a person wants.
“Red yoga pants for sensitive skin” is much more specific than “yoga pants”. You will not get as much traffic, but it will be highly targeted. If you offer yoga pants for sensitive skins, this is keyword gold.
Monitor your ad quality scores. High-quality scores get you better placement and better pricing on your ads.
Offline advertising includes TV ads, billboards, direct mail, radio, and so on.
When doing offline advertising, begin by running cheap tests on the local market. After testing locally, you can then scale internationally.
To test the effectiveness of different offline ad campaigns use unique codes or different web addresses.
Search Engine Optimization
“The most important thing to know about SEO is that the more high-quality links you have to a given site or page, the higher it will rank.”
In SEO, there are two high-level strategies to choose from: Fat-head and long-tail.
Fat-head strategies involve trying to rank for search ranks that directly describe the company.
A company selling wooden dolls might want to rank first for the search engine query “wooden dolls”.
Long-tail strategies involve ranking for more specific terms with lower search volumes.
The same wooden doll company might also want to appear in searches for “wooden dolls for five-year-olds”
“Whether you pursue a fat-head or long-tail strategy, SEO comes down to two things: content and links. The more aligned your content is with the keywords it’s targeting, the better it will rank. Similarly, the more links you can get from credible and varying sources, the better your rankings.”
Traction channels such as SEO or content marketing can help you build your email lists.
One way to build an email list is to create short free courses that are related to your area of expertise. These can be geared towards educating potential customers about the product, or your problem space.
Over the last 5 years, I grew my email subscribers by providing the best content on productivity every week. Whenever I have a new product on productivity and knowledge retention, I share it in my weekly emails. One other way I built the list was by offering valuable content to my readers for free.
Apart from your own email list, consider advertising on email newsletters that are complementary to your own.
“Email marketing is a great way to improve your customer activation rates. A popular approach is to create a sequence of emails that slowly exposes your new customers to the key features in your product. Instead of throwing everything at them right away, you can email them five days after they’ve signed up and say, “Hey, did you know we have this feature?”
Viral Marketing Strategy
A viral loop is a three-step process in its most basic form:
- A customer is exposed to a product or service
- The customer shares the message with someone else
- Some portion of the people exposed become your customers as well
It is called a loop because the process begins all over again.
“The oldest form of virality occurs when your product is so remarkable that people naturally tell others about it—pure word of mouth. Word of mouth drove Facebook’s early growth among college students, before they started building in more explicit viral hooks (email invites, adding your friends via address books, etc.). Word of mouth also causes many movies, books, diets, and TV shows to take off.”
If you understand how and why users are clicking links on your site, or signing up you will easily find ways of improving your viral loop.
Engineering As Marketing
Engineering marketing: Building useful tools and resources in a way that attracts customers.
Hubspot offers a free marketing review tool called Marketing grader that has been used by 3 million people so far.
“Engineering as marketing creates lasting assets that can serve as the engine for your growth.”
Business development involves exchanging value through partnerships.
The major types of business development partnerships are:
- Standard partnerships. Two companies work together to work on one or both their products
- Joint ventures. In joint ventures, two companies work together to create a new product
- Licensing. Happens when companies charge a fee to anyone using their brand
- Distribution deals. Distribution deals work when one company provides a distribution channel to another company
- Supply chain partnerships. Connections help secure key inputs that are essential for certain products.
“For business development to work well, you must have a clear understanding of your company objectives. What metrics do you need to hit in order to maximize your chances of success? How can partnerships help you get there? Good BD deals align with your company and product strategy and are focused on critical product and distribution milestones.”
“Talking to prospects about their problems is not only a necessary sales tactic, but also necessary for good product development.”
SPIN (Situation, Problem, Implication, Need-payoff) Selling Strategy has four components:
- Ask Situation questions. These questions will help you understand the prospect’s buying situation. An example of a situation question is how is your organization structured?
- Problem questions. This kind of questions clarify the buyer’s pain points
- Implication questions. These kinds of questions are meant to make the prospect aware of why they need to solve the problem they are facing ASAP.
- Need-payoff questions. This kind of questions get the buyers thinking of the benefits of solving their problem
Build a repeatable sales model. Keep the buying process as simple as possible.
Using Existing Platforms
Figure out where your potential customers spend their time online and advertise on the platforms.
If the platform allows it, add features to the platform by filling gaps within the platform
If you are launching an app, try giving it away for free first before charging your customers. Free apps are more appealing than premium ones.
Focus on new and untapped platforms. The competition is less.