Traction: How Any Startup Can Achieve Explosive Customer Growth [Book Summary]
Any business owner will tell you that one of the most difficult parts of sustaining and growing a business is getting people to know that your company exists and keeping customers happy enough that they want to tell others about your product or service.
This is why we took the trouble of summarizing some of the best advice from the book “Traction: How Any Startup Can Achieve Explosive Customer Growth” and compiling it into the free downloadable business starter kit below.
Based on insights from interviews with more than 40 successful startup founders — including Paul English (Kayak), Jimmy Wales (Wikipedia), Dharmesh Shah (HubSpot) and Alexis Ohanian (reddit) — ”Traction” will teach you how to:
- Find and use offline ads and other channels your competitors probably aren’t using
- Get targeted media coverage that will help you reach more customers
- Boost the effectiveness of your email marketing campaigns by automating staggered sets of prompts and updates
- Improve your search engine rankings and advertising through online tools and research
You can read key concepts from the first 14 chapters in this post or download the entire audio and text book summary (as part of our free business starter kit) below:
Chapter 1: Traction Channels
What is traction?
It is quantitative evidence that your company is growing rapidly due to customer demand for your product or service.
After interviewing 40 different successful startup founders, Gabriel Weinberg and Justin Mares identified 19 different “traction channels” you can use to obtain rapid growth. While most startups focus only on those they have heard before, the most successful ones leverage a combination of these, especially channels ignored by the competition:
- Targeting niche blogs
- Media mentions
- Unconventional PR
- Paid search
- Social and display ads
- Offline advertisement
- Content marketing
- Email marketing
- Widgets, microsites and free tools
- Customer referrals
- Strategic partnerships
- Affiliate programs
- Existing platforms
- Trade shows
- Offline events
- Speaking engagements
- Community building
Chapter 2: Traction Thinking
One of the major challenges startups face is having a great product that people love but not getting enough traction. This is why it is important to focus 50% of your time on developing your product and the other 50% on testing different traction channels (The 50 percent rule).
Working on both of these fronts in tandem has several advantages:
- You will get a large amount of feedback that will help you further refine your product so that it fully meets customers’ needs.
- You can test different channels and learn what works and what doesn’t. This way, when launch time comes, you can move full speed ahead.
To start, you need to first define your traction goal: How many new customers will you gain and at what rate?
To put this into context, think about the three phases of startup growth:
- Phase 1: Developing a product that has customer demand
- Phase 2: Marketing a product that people want
- Phase 3: Scaling your startup
- In the first phase, you refine your product until you achieve product-market fit, evidenced by a high retention rate.
- In the second phase, now that you have a product that actually satisfies customers’ needs in a way that no other alternative does, you can ramp up your traction efforts and adjust your marketing messages based on what you observed in the first phase.
- In the third phase, once you’ve established a viable business model and attained a significant position in the market, you can focus on scaling your business to increase profits and market share.
Since startup growth happens irregularly — there will be peaks and valleys along the way — it is best to test all the different traction channels available to you. Once you’ve exhausted one, you can move on to another until you hit the growth spurt you’re looking for.
How Much Traction Are Investors Looking For?
Begin by reaching out to those who already have real-world experience in your industry and have a clear understanding of what you aim to do.
Investors who can grasp and envision the potential of your product are much more likely to invest in it, even if you still don’t have a lot of traction just yet.
And if you don’t get much of a positive response, remember that even if you have a small amount of clients, a significant and constant rate of increase in the number of customers who engage with your product over time is always a positive sign for investors.
When Is It Time to Pivot?
There are many startups who throw in the towel too early. Much of startup success depends on going after the right market at the right time.
To find out if it’s time to pivot, make an honest assessment of whether there is real engagement with your product. Even if there are only a few enthusiastic adopters of your product, the fact that they exist provides a glimmer of hope. Ask yourself: Are they outliers? Or early adopters? If they’re the latter, then you might just be a bit ahead of the market and should wait it out.
Chapter 3: Bullseye
Many startups make the mistake of wasting valuable marketing dollars on every distribution strategy they can think of, instead of zeroing in on the one channel that can generate the most ROI for every dollar spent.
The name Bullseye refers to the framework used to identify your single most successful traction channel. The first step to do this is to think of at least one viable idea for each of the 19 traction channels.
One way to identify viable marketing strategies for your specific startup is to do some research into what has worked (and not worked) for other successful companies in your industry that offer similar services or products.
Zeroing in on the Target
To zero in on your one successful channel, start by experimenting with low-priced traction tests to identify those that have the most potential. The ones that generate the best results can be moved from the outer to the middle ring.
Next, continue your traction experiments with those in the middle ring to determine which channels you should focus on by answering the following questions:
- What is the cost of customer acquisition for this channel?
- How many potential customers can you reach through this channel?
- Are these the kind of customers you want to target in this phase of your startup development?
Finally, Weinberg and Mares recommend focusing on the one traction channel that can bring the most growth for your particular startup phase. One you’ve zeroed in on your target, keep experimenting to further optimize your strategy and scale it until it is no longer generating significant growth or costs too much.
Chapter 4: Traction Testing
According to startup adviser Andrew Chen, “over time, all marketing strategies result in shitty click-through rates.”
Since all successful marketing strategies will eventually become saturated, Weinberg and Mares suggest brainstorming innovative tactics others haven’t tapped into yet for reaching new customers.
To scientifically determine your most effect channels, use online tools such as Optimizely or Unbounce to run A/B tests, which are nothing more than showing one version of a page or post to one half of your audience and another version to the other half.
In order to make decisions based on concrete numbers rather than assumptions, keep track of all your numerical results in a spreadsheet and compare them before deciding on a specific channel strategy.
Chapter 5: Critical Path
To ensure that you don’t get off track anywhere along the way, make sure to clearly define a traction goal that is aligned to your business goals. For example, if your goal is growth rather than profitability, then an example of a traction goal could be 100 new users per day.
Once your end goal is defined, you can then work backwards and set specific, quantifiable subgoals, along with milestones or steps needed to get to those subgoals.
In the end, what you have is the Critical Path you should follow to reach your end traction goal. Anything that doesn’t move you further along your Critical Path should be ignored for now.
To make sure you’re making progress, you can incorporate periodic assessment of these goals into your management processes and even plot them out on the same calendar where you have visualized your product development milestones.
Root Out Channel Bias
One of the ways to exploit underutilized channels is to analyze each of the 19 traction channels mentioned in the first chapter of this book and determine which have been ignored by your team for whatever reason.
Almost all founders have an inherent bias against certain traction channels because they believe they will not be successful, but this is precisely why this tactic can lead you to channels and tactics that are being ignored by your competition.
Start by identifying those traction channels, especially the ones you know least about. Mentors who have had success with these channels can provide advice that can lead you to a cutting-edge channel strategy.
Chapter 6: Targeting Blogs
One of the best ways to acquire your first customers is to target blogs read by potential customers.
Basic Strategy & Special Tips
- Identify relevant blogs using a variety of tools, including Twitter, Google search, StumpleUpon, Delicious, Social Mention, YouTube and Google Alerts.
- Sponsor small, niche blogs by offering money in exchange for displaying a small advertisement on their sites. Or get influential bloggers on board by offering VIP access in exchange for getting the word out.
- Offer something of unique value to top blogs, such as a special offer, bundles or freebies.
“The need to do something unscalably laborious to get started is so nearly universal that it might be a good idea to stop thinking of startup ideas as scalars. Instead we should try thinking of them as pairs of what you’re going to build, plus the unscalable thing(s) you’re going to do initially to get the company going.”
Chapter 7: Publicity
Getting covered by traditional media sites like The Washington Post or The New York Times can help you not only gain significant traction, but also boost your credibility and reputation in the eyes of your users and followers.
- Start by targeting smaller sites and blogs and then work your way up to the major media sites.
- Since these sites usually look to smaller blogs to find story ideas, it is a good idea to first get featured on these to increase the chances of getting picked up by sites like TechCrunch and Huffington Post.
- Play the long game by cultivating relationships with reporters who cover your market. Follow them on Twitter, regularly read and comment on their work, and offer to provide some expert advice to use in their articles.
- Tap into emotions that will make readers want to share your story with others. Package your startup’s milestones into a newsworthy, emotional narrative that will make your story more compelling.
- Journalists receive hundreds of pitches a day, so make yours clear and concise. Make the value of your proposition easy to understand at a glance, relieving the journalist of as much work as possible as they read and decide whether your story is newsworthy or not.
“The news has fundamentally changed. Think of The New York Times. When they decide to publish an article about you, they are doing you a huge favor. Blogs are different, as they can publish an infinite number of articles and every article they publish is a chance for more traffic (which means more money in their pockets). In other words, when Business Insider writes about you, you are doing them the favor.”
Chapter 8: Unconventional PR
One way to garner attention is to experiment with unconventional PR tactics.
Basic Strategy & Special Tips
- If you are ready to experiment until you find a stunt that sticks, you should do something ostentatious and creative yet inexpensive. Successful startups have tried everything from viral videos and billboards to competitive stunts.
- Treat your customers exceptionally well, e.g. startups like Zappos and Hipmunk are well-known for going above and beyond the call of duty to serve their customers by sending gifts and handwritten notes to them and running creative contests.
- Find a brainstorming and selection process that allows you to select the most promising ideas, but be aware that not every idea will be a success.
“Customer appreciation is a simple way of saying ‘be awesome to your customers.’ The goal is still generating publicity. However, if you fail to get press coverage, you still have happy customers and a stronger, more relatable brand, which significantly increases word-of-mouth effects.”
Chapter 9: Search Engine Marketing (SEM)
Buying ads related to keyword searches — these ads come up along with the organic links when a word or phrase is searched for. Payment is made for each click by a user on the ad (pay-per-click).
- CTR — Click-Through Rate is the percentage of ad appearances translating to clicks.
- CPC — Cost per Click is the amount paid for each click on the advertisement.
- CPA — Cost per Acquisition is the price of acquiring a customer after a click. This is a measure of actual purchase.
- CPA = CPC/conversion percentage
- The first step is to identify the keywords that can be most effective in attracting customers using tools like Google Keyword Planner.
- This is followed by testing these keywords on a platform like Google AdWords.
- Then create eye-catching ads, which also include a call to action.
- Different keywords have different rates, and an analytics tool can be used if the cost and conversion rates are in sync.
- A small-scale test at the beginning can let you know if SEM is the right channel for you.
- The channel can be further optimized on different metrics to improve the ad quality scores.
- After establishing a profitable campaign, consider expanding to the Google content network
- Use advanced tools like retargeting, conversion optimization, negative keywords and programming scripts
- Aggregate long-tail keywords, which are cheaper as they have low search volumes
Case Study (Inflection)
The genealogy service used AdWords even before building its product to identify the most desirable product features, and then continued with it as the core traction channel to drive customer acquisition.
“Over time, all marketing strategies result in shitty click-through rates.”
Chapter 10: Social and Display Ads
Social ads involve advertising on sites like Facebook and Twitter, while display advertising is seen across the internet on websites. These are not only great for creating awareness, much like conventional advertising, but can also be used to push sales and drive greater customer engagement.
- These ads can be bought through large general networks like Google and Advertising.com, through niche networks that target specific audience categories or directly from publishers of sites and blogs.
- It is important that the location of advertising matches the requirements of your product.
- This method requires well-designed ads to generate customer awareness and interest, rather than an immediate conversion.
- Depending on intended audience one or more social networking sites can be used, or you can partner with networks that promote content on popular media sites.
“Content only goes anywhere if people care about it… With social, it’s word of mouth on crack.”
Chapter 11: Offline Ads
This is conventional form of advertising as done via media like TV, radio, magazines, newspapers, billboards and direct mail. The exact form chosen depends on the age of the target demographic, its mindset, etc.
- Run a cheap test ad for a small market and then scale up according to budget and product phase if it works.
- Long contracts and buying remnant ad inventory are two ways to save money.
- Offline ads are difficult to track, and require innovative means like specific call to action or unique discount codes.
- For magazines, depending on the target demographic, choose one of the three types: (i) consumer, for large population; (ii) trade, covering a particular industry; and (iii) local, targeting a small market.
- Newspapers can be local or national too, but generally serve the 30-plus age group.
- Direct mail campaigns can be strengthened using smart tactics like handwritten cards and envelopes, inclusion of self-addressed envelopes for better response, and bulk email option for reduced pricing from the postal service.
- Local print ads, calendars, yellow pages, etc. are inexpensive ways to test print advertising.
- Unorthodox strategies like hanging flyers where potential customers get together can also be used effectively.
- The cost of billboards depends upon GRP score (Gross Ratings Points), decided by factors like ad size, type, location and number of impressions.
- Advantages include chance of the ad staying up for a long time and captive audience provided by effectively placed transit ads.
- Downside is that immediate action is not possible with many billboards as people are likely to encounter them while on the road.
Radio & TV Advertising
- Radio ads are priced on cost-per-point, each point equaling the cost to reach 1% of listeners.
- TV ads provide powerful branding, but can be expensive to buy and to create.
- Same for infomercials, which generally work for a select category of products.
“One thing I learned at Smart Bear is that I have zero ability to predict what’s going to work.”
Chapter 12: Search Engine Optimization (SEO)
It involves use of a variety of tools to improve ranking in search engine results. This is one of the main forms of inbound marketing.
- Basics include having a large number of high-quality links to your site and using the right keywords in page titles and headings.
- A ‘fat head strategy’ involves trying to rank for broad search terms that have high search volumes, while a ‘long-tail strategy’ involves ranking for more specific terms that have lower search volumes.
- The key to choosing a strategy is the ability to rank high on the first page in the search results.
- Targeted articles with useful content are useful in case of the long tail strategy.
- High quality content aligned with the targeted keywords and high quality links to your site are the two most important factors for successful SEO.
- Publicity through popular websites, content marketing and widgets with backlinks are some ways to build links.
- Avoid ‘black-hat tactics’ that can earn links in the short term, but can be penalized later.
“The problem with Uber is that there’s not a lot of search demand for it. I mean nobody searches for “alternatives to taxicabs that I can hire via my phone.” It’s just not a thing. And this is a problem with a lot of startups that are essentially entering a niche where nothing had existed previously. . . . There’s just not search volume.”
Chapters 13 to 24
You can access the full audio and text summary of the Traction book here, as part of our free business starter kit: