The first time that I came across the book called "Traction - How any Start-up Can Achieve Explosive Customer Growth" by Gabriel Weinberg and Justin Mares, was through a quote on Twitter by venture capitalist Fred Wilson at Union Square Ventures.
The entrepreneurs who walk out of our offices with term sheets walk into them with Traction. It's a pragmatic guide to solving the entrepreneur's number one challenge.”
Partner, Union Square Ventures
With a recommendation like this, I felt compelled to give the book some further attention. This detailed review is made purely to collect in one place my own thoughts on the great content I've read, and hopefully to spur others to purchase the book and benefit like I have from its contents.
Why I decided to delve into this book
I had actually come across Gabriel Weinberg before as I had read about his product - a search engine that that defines itself essentially as "not being Google i.e. not tracking your search results"-previously on Twitter. DuckDuckGo is a search engine that emphasises user privacy by not tracking its users on over 3 billion searches in 2015.
So it was with interest that I came to understand that not only was a Weinberg a successful entrepreneur but he was in fact two time successful entrepreneur. This was a further impetus to read his book.
"Traction" is an interesting word.
When I think of the word traction at several images come to mind:
- the idea of your shoes getting a good grip on a slippery surface;
- the notion of a conveyor belt moving relentlessly forward;
- and the etymological association with the good old-fashioned tractor, which shares the same word route in Latin as does the word traction-that being the Latin verb trahere, meaning, "to drag/pull".
That notion of:
- a mechanical force
- carrying out monotonous but functionally critical movements
- to plough a farmer’s field,
- to allow that same tractor to distribute seeds which after some time allows the same farmer to return on the same tractor,
- in order to harvest the crops that have grown from the seeds that have been planted in the furrows created by his tractor
is an interesting concept and one that has some parallels in my view with the broader concept of traction that the author Gabriel Weinberg goes on to explore in his book.
What I liked about the book Traction, was that the authors were not pretending, in my view, to be reinventing the wheel.
Rather, they had simply applied a clear structure to pre-existing patterns of customer acquisition.
Purpose of the book
For me, it was very helpful when I came to understand that the authors were breaking up what they describe as the 19 different distribution channels and were intending to examine them one by one in the course of the book.
They define these as a traction “channels”.
In their words "traction is a sign that your company is taking off".
Helpfully they point out that traction isn't limited to technology companies; rather that it is relevant to any business that is looking to grow itself at an exceptional rate.
Indeed, "traction is basically quantitative evidence of customer demand".
Or, as Paul Graham, of the founder of YCombinator, puts it,
“the only essential thing is growth. Everything else we associate with start-ups follows from growth” (p.2).
So the essence of Traction is the delineation and description of the 19 separate traction channels that have been identified by the authors.
(A quick structural improvement for version 3)
(As an aside it, in terms of the structure of the book, I think that the authors have potentially missed a trick by not more clearly highlighting the fact that the book is a summary of 19 different traction channels.
Even in the structural layout of the text and chapters I think that for version three they could more clearly highlight the 19 distinct traction channels.
For example, in version two (the copy in my hands), at page 3-7, they list, in paragraph by paragraph format, the 19 traction channels.
This may sound pedantic, however it would be more useful if the authors numbered the traction channel paragraphs (e.g. Traction Channel # 1).
Even flicking through the index at the start of the book the first traction channel comes in at chapter 6 ("targeting blogs") and there is no way for you to know in the index, or indeed the chapters, that you are at the start of the 19 different traction channels that are in fact the core subject matter of the authors’ book.
Bearing in mind (I think) that the purpose of an index is to quickly highlight to the reader chapters of interest (particulalry relevant to busy entrepreneurs and those in charge of businesses getting off the ground).
Flagging more easily for the reader the ability to dip in and out of relevant traction channels would be a significant improvement to the next release of the book).
The 19 Traction Channels
So, for my own purposes I'm going to list out now the 19 distinct traction channels:
1. Targeting blogs
3. Unconventional public relations
4. Search engine marketing
5. Social and display ads
6. Off-line ads
7. Search engine optimisation
8. Content marketing
9. Email marketing
10. Engineering as marketing
11. Viral marketing
12. Business development
14. Affiliate programs
15. Existing platforms
16. Trade shows
17. Off-line events
18. Speaking engagements
19. Community building
If you are anything like me, then you may find yourself either mentally (or in my case, actually doing this with ten of them!) ticking off the distribution/traction channels listed above with which you have some confidence or experience to date.
This is quite a useful exercise itself as it highlights areas you're comfortable with but also those which you need to get out of your comfort zone if you're going to successfully achieve traction for your venture.
Bearing in mind that one of the reasons why I like to blog is to essentially create an aide-memoire for myself of particularly useful reading materials, I’m simply going to follow the authors' structure, chapter by chapter, giving a brief description of my own thoughts of the traction channel described.
The 50% Rule
Actually, now that I think about it, probably one of the defining thoughts that I came away with I having read this book was what is inscribed at the start of chapter as the 50% rule.
What is the 50% rule?
The 50% rule is simply this:
Traction and product development are of equal importance and should each get about half of your attention. This is what we call the 50% rule: spend 50% of the time and product and 50% on traction
Traction Channels, p.9
Now before you read on, re-read that quote above. It’s the whole purpose of the book. If you ‘get it’, then it’s worth you reading on in my review.
If you don’t ‘get’ what they mean, don’t bother reading on as you’ll just be wasting your own precious time!
Re-read it? Good! The authors go on to explain that part of the reason why people are reticent about exploring unknown traction channels is precisely for that reason: they are unknown to the individual, therefore outside of one's comfort zone - as well as being outside of the vision of the entrepreneur.
The advice of the authors is clear: don't shy away from those traction channels which are unfamiliar to you.
To be clear, splitting your time evenly between product and traction will certainly slowdown product development. However it counterintuitively won’t slow the time to get your product successfully to market. In fact, it will speed it up! That's because pursuing product development and attraction in parallel has a couple of key benefits"
Traction Thinking, p.10
(I know this may sound funny possibly to you, however that description of the 50% rule felt like the authors were actually speaking to me, giving me permission to proactively dedicate time, attention and resources to those traction channels.
My own software technology start-up company, Complyfile, has just emerged from the initial product development cycle, and the traction journey is one on which we are now embarking - therefore the "50% rule" is a helpful 'permission slip' for me when I think I should be focusing more on product to the detriment of pursuit of the best of the 19 traction channels).
Straight away the authors use the image of a "bucket" into which you are quite literally pouring money as part of your traction channel testing strategy.
Their advice to the reader is clear: just because your bucket "will be very leaky", don't despair!
The reason why it is "leaky", is precisely because your "product is not as sticky as it could be".
This is why "much of the money you are spending on traction will leak out of your pocket".
But this is where the rubber hits the road: for the authors point out that most founders commit a major mistake here:
They think because this money is leaking out that it is money wasted. Oppositely, this process is telling you where the real leaks are in your bucket [product]".
If like me you had to read that I just quoted more than once then I suggest that you, like me, just take a second and try and understand what the authors are saying here: which is, as I understand it, that it is through failure (the leaks in the bucket) that you identify your probable routes to traction success (traction channels that don't become a leaky bucket).
Goal-setting is important whatever area of business you are involved in.
The authors recommend that "you set a traction goal".
What does this mean? Well they describe as "moving the needle". i.e. producing measurable, significant impact on your traction goal.
The 3 Phases of Traction
Don't skip over page 13 of the book. This is where they identified the three phases of getting traction
- Phase 1: making something people want
- Phase 2: marketing something people want
- Phase 3: scaling your business
Phase 1 is essentially product development/the search for product market fit
Phase 2 is essentially once you have achieved product market fit and your "traction bucket is no longer leaky", allowing you to "fine-tune" your marketing and positioning messages;
Phase 2 is essentially once you have achieved product market fit and your "traction bucket is no longer leaky", allowing you to "fine-tune" your marketing and positioning messages;
Phase 3 is, in my words, simply a case of throwing more fuel on the fire that you have generated as you emerge from phase 2 and your achievement of product market fit.
(There is a small hat-tip to Paul Graham again of Y Combinator, quoting his ground-breaking essay "Do things that Don't scale" - where the authors remind the reader that founders of start up companies generally must recruit new customers/uses manually, by doing things that in the long term of the business wide scale, but will help them get that initial sense of getting off the ground").
I underlined a sentence on page 16 of the section called "To Pivot or Not To Pivot":
We strongly believe that many start-ups give up way too early
I read that comment and was immediately reminded of the comment by Jason Lemkin, one of the most influential venture capitalists with a particular focus on software as a service, who, as I recall, believes that if you can gain unaffiliated 10 customers (who aren't related to you or your best friends), then you simply must (indeed owe a duty to your future customers) to persevere in your driven search for product market fit. His hypothesis (proven, in his view) is that if you can persuade 10 and unaffiliated organisations/people to become customers of your nascent software/start-up company, then there is simply no reason on this good Earth of ours why that same company cannot obtain 20 customers.
And if 20, why not 50?
And if 50 why not 100?
And if 100 why not 1,000?
And if 1,000 why not 10,000?
And I think that the point that both Lemkin and the authors of the Traction book are making here is that it is simply not good enough - if you have a vision, a product, and a market to serve – you must not allow yourself to be dispirited by the slow increments of traction growth.
Or to put another way, don't give up: keep on fighting, stay in the ring.
It is very likely that one "traction" channel is optimal. Most businesses actually get zero distribution channels to work. Poor distribution - not product - is the number one cause of failure"
Not the words of the authors, rather the words of Peter Thiel, early technology entrepreneur and PayPal founder.
So the notion of the Bullseye is simply this:
- Explore what’s possible as a traction ring (this is your Outer Ring in your bullseye)
- Delve into the traction channel most probable to work for you (this is the Middle Ring of your bullseye)
- Drill into what actually works for you (this is the Inner Ring of your bullseye)
The Outer Ring: what’s possible (p.20)
I loved what the authors said here which was to make sure that you identify "Your traction channel biases". The purpose of this ring is to "systematically counteract your traction channel biases".
Basically, don't dismiss as a potential traction channel, a channel with which you have zero experience to date.
(Actually again here I would just flag something that I would love to see in the next release of the book. On page 20 the authors talk for the first time about a "channel strategy". Now to sophisticated readers I am sure that it is abundantly clear what a "channel strategy" is.
(But for those of us less sophisticated readers, it would be super helpful to have an easy definition of what a channel strategy is.
Because the notion of a "traction channel" so clearly runs through the veins of this book, that to introduce a supporting concept such as a "channel strategy" without clearly assisting the reader with an understanding of what the authors in fact mean by "channel strategy", is in my view, leaving value on the table not being delivered to the reader).
The Middle Ring: what’s probable (p.21)
Again, I think the authors could usefully highlight the process for the reader as to how to promote a traction channel from the outer ring to the middle ring: they do, to be fair to them, flag it on page 21 (I just think it could be made clearer!)
Go around your outer ring and to promote your best traction channel ideas to your middle ring"
Once you have identified the traction channels in your "inner ring" then you should apply the authors' three tests to those traction channels that you have put in to your inner ring:
- 1. How much will it cost to acquire customers through this channel?
- 2. How many customers are available through this channel?
- 3. Are the customers that you are getting through this channel the kind of customers that you want right now?
The point simply here is that the authors want you to find if one of these channels that are now in your "inner ring", is one of the channels that "move the needle" for you.
The Inner Ring: what is working for you
At any stage in a start-ups life cycle, one traction channel dominates in terms of customer acquisition"
The comment that I scribbled on the side of the page was this: "focus on the over-achieving channel, even where two other of your traction channels are performing well for you".
As the authors say:
"When we looked at a companies really taking off, they were usually employing under-utilised channels and channel strategies".
At the top of the start of chapter 4-traction testing-I drew/scribbled a picture of a traction channel, out of which flowed three separate channel strategies.
Why did I do this?
For me it was to embed the idea that channel strategy flows out, like a stream, of each of your distinct traction channels.
What does this look like?
Well if one of the 19 traction channels (#6), is "off-line ads", then the following are distinct "channel strategies" flowing out of the broader "traction channel" that is made up of "off-line adds":
- Ads on trucks
- Magazine ads
Inner Ring tests have two purposes:
· To find your very best traction channel strategy
· To discover further better traction channel strategies
(A lot of this seems to revolve around A/B testing. Using existing online tools is recommended by the authors stop - don't simply look where your competitors are looking for customers - look where they are not looking!)
Chapter 5: Critical Path
Again this comes back to the authors idea of moving the traction needle! They’re basically saying aim for something which would "change things significantly for your company’s outcome" (page 36).
What I liked here was the fact that Gabriel Weinberg, one of the authors, focused in on his own current company on a traction goal of capturing 1% of the global search engine market.
I paraphrase here, but when he defined this as his company traction goal, basically it seemed like an almost impossible task (with many scoffing at the ambition of the target as being pie-in-the-sky unrealistic). But through both accident and design (more of the latter than the former), they hit that traction goal.
Question: would they have achieved it without it? The authors think clearly they wouldn’t have – or it would have taken much, much longer to achieve.
So, what do the authors mean by the phrase, finding your traction "critical path"?
The path to reaching your traction goal with the fewest number of steps is your critical path"
Critical Path, p.37
(Another quick aside: I think the book could benefit from some illustrations here, especially around the idea of the Bullseye / Outer Ring / Middle Ring / Inner Ring / Critical Path).
The bulk of the book is the exploration and detailing of the 19 Traction Channels - but the concepts of Bullseye / Outer Ring / Middle Ring / Inner Ring / Critical Path are the framework by which the authors suggest readers examine those 19 Traction Channels.
I felt like they could have had a conclusion to the book, prior to the Appendix, where they tied up the 19 Traction Channels with their concepts of Bullseye / Outer Ring / Middle Ring / Inner Ring / Critical Path).
Back to Critical Path: the authors basically tell you to spell out, step-by-step, each stepping stone required to get you to the far side of the river (and those steps are your stepping stones across the turbulent waters that engulf the majority of start-ups on their failed journey to traction).
In other words, Critical Path is a framework to help you decide what not to do. Everything you decide to do should be assessed against your critical path. Every activity is either on path or not. If it is not on the path, don't do it!"
Critical Path, p.38
Traction Channel 1: Targeting Blogs (ch.6)
In this chapter the authors explore a company called Mint.com and their successful attempts to gain traction through the first of the 19 attraction channels identified by the authors: Targeting Blogs.
Well, that’s all well and good, but how do you find out which blog to target?
Usefully, on page 46, the authors list a number of tools to enable you to find influential bloggers in your area:
- Search engines
- Social mentions
- Just talking to people!
Again, one of their tips, is simply to run a number of A/ B split tests on smaller blogs, offer to advertise/ sponsor on smaller plots, and try and offer something in return of value to the bloggers whose blogs you’re attempting to target.
Traction Channel 2: Publicity (ch.7)
This is messaging the old school way.
The advice in this chapter pertains to both on-line and off-line content; however, it is of particular relevance to online content in my view.
The authors help the reader understand the value exchange created in the provision of online space on an online news platform.
An online news platform discusses your business and the story about you; in return for which, and, critically, assuming your company deserves / warrants the attention of their readers, more page views are created for the online publisher (therefore making the job easier in terms of generating revenues from e.g. online advertisers).
Or, to put it the way the authors do:
Most sites make their money from advertisers, so they want to drive as many pages as possible”
Again, the authors point out that unlike the traditional model where local/smaller news agencies obtained their stories from the large media channels, today, in the Internet driven world, the opposite can be said to be true: large media organisations now obtain much of their content from the popular articles contained on smaller blogs which are shared through social media.
Another way of getting media attention is to contact a reporter/journalist directly. But how do you do this given that presumably many others are trying to do the same thing?
Basically don’t simply "pitch" your product to a journalist: they're inundated by such requests. Instead, only contact them when you hit your milestones of e.g.
- Raising money
- Launching a new product
- Breaking a usage barrier
- A PR stunt
- Sealing a big partnership
- Or releasing a special industry report
And here’s a quote worth highlighting:
A good press angle makes people react emotionally. If it’s not interesting enough to elicit emotion, you don’t have a story worth pitching”
A good tip that the author highlight is to connect on Twitter with reporters/journalists; and how you may be surprised how some very influential journalists/reporters can in fact have very few followers Twitter – and that you shouldn’t correlate their number of Twitter followers with their industry reputation.
Traction Channel 3: Unconventional PR (ch.8)
While the authors do not focus that much attention on this traction channel, they helpfully segmented it into two parts:
- Publicity stunts
- Customer appreciation
For publicity stunts, this is about propelling an organisation from anonymity to national recognition in an instant. A number of highly amusing examples are given (including Gabriel Weinberg’s placement of a large advert for his search engine DuckDuckGo right in the backyard of Google in California!).
On the customer appreciation side, the authors again give a number of excellent examples of non-scalable gestures of appreciation by a company to its customers. Without going into details and examples, a great line in the book is this:
“Good customer support it’s so rare that, if you simply try to make your customers happy, they are likely to spread the news of your awesome product on that basis alone” (p.61)
Traction Channel 4: Search Engine Marketing (SEM) (ch.9)
- Paid search
- CTR (Click-Through Rate)
- CPC (Cost Per Click)
- CPA (Cost Per Acquisition)
These are critical concepts to get right as and when you choose to explore the world of SEM. Your keyword strategy (namely, your strategy in identifying those words which are key to bringing you success in online SEM) can be further refined by digging deeper into “long-tail keyword” searches (sidenote: check out https://www.hittail.com/ - recently sold by Rob Walling, which specifically explores this area of long-tail key word searches).
How do you know when SEM is a successful traction channel for you?
When your CPA is less than the amount of money from each customer acquired.
Execution of your SEM campaign comes down to running separate groups of ads that enable you to test the success/efficiency of those keywords / the copy contained in.
Again I will leave you to enjoy the details yourself; suffice to say that the point made is that a successful SEM strategy can become a major competitive advantage.
On the surface it can appear/feel as if you are simply tinkering with ads, but in reality you are instigating a major business improvement because the potential gain on finding the right keywords can drive major revenue improvements to your business.
The main takeaway from the SEM traction channel? If you can get close to break even on an SEM campaign, SEM could be the traction channel for you.
Traction Channel 5: Social and Display Ads (ch.10)
So what’s a ‘Display Ad’?
Basically these are the ads you see on the websites you visit over the Internet. There are basically two approaches you can take:
- Place ads directly on websites by contacting the site owners themselves
- Go through an ads aggregating agency that can place your ads on a number of different sites
Social Ads: these are ads that are more around creating an awareness of your product/service rather than directly leading towards a purchase. They tend to be placed on ‘social platforms’ like Facebook, Twitter, Instagram etc.
Why placed there? Because social platforms are less business/purchase orientated and are folks on focusing there on entertainment / leisure: you want your ad to reflect the environment in which it is placed.
Interestingly, this is where you can add value by placing in your social ads output (e.g. links to blogs) generated under a different traction channel such as content marketing (Traction Channel 8).
By pushing out your content through paid ads on social platforms, you widen the audience for that content.
As to potential ‘social platforms’, you’re spoiled for choice, as the authors show: (pp.79-80):
Traction Channel 6: Offline Ads (ch.11)
Even today, advertisers spent more on offline ads than they do on online”
So, what is an off-line ad? Well, you see them all around you as you go in and out of work and as you go about your daily life:
Newspapers, magazines billboards, direct mail etc
A nice tip here when it comes to offline ads, from the authors: look for “remnant advertising”. What’s that? Its ad space currently not sold.
The closer you get to an advertising deadline, the more likely it is that you can place your ad in an offline publication for a price well below that published in the advertising rate card.
Another pro-tip here: on your off-line ad, place some form of URL specifically tied to an offer (so that you can track the uptake of specific off-line ads).
Advertising in newspapers and magazines, or buy direct mail or going even more micro by advertising in church/parish newsletters and community newsletters can really help get you in front of your target audience. (That is, of course, assuming that they read the publications which you intend to advertise in offline. If they don’t, then don’t bother advertising there).
Billboard advertising - as well as advertising on the sides of buses and on bus shelters etc - is probably not an area that many consider accessible to them. But consider this: I bet when you drive home from work tonight, or dropping the kids to school, you immediately notice prominent ads in this format!
Radio and TV advertising
You learn something new every day. According to the authors, radio ads are placed on a “cost-per-point basis (CPP)”, where each point represents the monetary “cost to reach 1% of the radio” station’s listenership. Therefore the higher your CPP, the higher your cost to you to run an ad on the station.
According to the authors, buying TV ad space is a more “opaque process”, but one that maybe worth exploring, depending on the target market and the budget available.
Traction Channel 7: Search Engine Optimisation (SEO) (ch.12)
SEO allows you to amplify all of the good things you’re already doing in other traction channels”
Straight out of the box the authors tell you that the most important thing to know about SEO is that the more high quality links you have to a particular website or webpage, then the higher that website or webpage will rank in the search engine results.
In other words, you have optimized your website or web page at the top of the rankings for the search engine. Hence: ‘search engine’ ‘optimisation’.
Fat-Head or Long-Tail?
Approximately 30% of all searches that are carried out by people on the main search engines are for one word and two word searches (e.g. “fast cars”, “blue suede shoes”).
The other 70% of searches that are carried out are searches comprising multiple words and, as a result, while they do not get searched as much on their own, when you add all of these long word searches up, then in aggregate they add up to the majority of searches.
These searches for multiple words are called long-tail keywords. This contrasts with the searches including simply one key word or possibly two key words. These are called ‘fat-tail’ keyword searches.
(In my own mind I imagine a tadpole, which has a fat-head and a long tail).
Why is this important?
Your ability to rank high on the first page should be a deciding factor whether to pursue a particular SEO strategy”
Firstly, using tools such as Google Keyword Planner, the authors recommends you find one-word and two-word search terms for which you could conceivably gain 10% of the total search results, in order to be meaningful in terms of chasing the fat-head strategy.
Why? Because you’re going to be spending real resources on your attempts here so you want to get a decent return in terms of ranking very high up for that search term. If you can’t get that 10%, then you’re not going to rank highly enough (arguably) to make it worth your time and resources to pursue that fat-head SEO strategy (for that particularly combination of one-word and two-word search terms).
Secondly, work out how tough it’s going to be rank high for each of your desired terms.
Thirdly, narrow down your keyword searches (and check they’re relevant in your geographical area!).
Fourthly, put your chosen keywords into action, and build into your site the chosen keywords (titles, headers, sub-headers, images etc).
Fifthly, get other websites to link back to your site (and in an ideal world the authors recommend that the link back to your site includes, in the body of the words of the link, your chosen keywords!).
Yes, it looks like it gets as granular as this!
No wonder it’s not easy, this must require a serious level of attention to detail and perseverance to execute your SEO strategy effectively and without flagrant disregard for your budgets.
(That’s why, presumably, people can reasonably call themselves ‘SEO experts’).
The pistons driving your SEO engine are two-fold:
- Good quality content
- Links back to your site (and content)
You know how to create content.
But how do you get links back to your site?
- Through publicity, by building the links into your product (in a way in which people share your product links cf: LinkedIn)
- Content marketing
- Product widgets (something that people embed on their site that links back to yours)
An interesting and key tactical differentiator here on content creation:
- Fat-head SEO: top quality content is required.
- Long-tail SEO: this is where freelancers can come in handy
What’s the return on investment for inbound leads generated by SEO? Well as Mike Volpe from HubSpot is quoted as saying in the book,
Inbound leads are 50% cheaper [than paid leads] and close 100% more than paid leads"
And that, ultimately, is the return on your time and monetary investment in SEO.
Traction Channel 8: Content Marketing (ch.13)
The most common hurdle in content marketing is writer’s block. To overcome it, simply write about the problems facing your customers… the secret to shareable content is showing readers they have a problem they didn’t know about, or at least couldn’t fully articulate”
Traction Channel 8: Content Marketing, p.105
A nice benefit about executing quality content marketing as a traction channel is that you get positioned as a leader in your field. And here’s the rub from the inter-weaving of the traction channels:
Having a strong company blog can impact at least eight other traction channels – SEO, publicity, email marketing, targeting blogs, community building, offline events, existing platforms and business development” [emphasis added]
Traction Channel 8: Content Marketing, p.107
And the words of Paul Graham are echoed again: do things in content marketing that don’t scale.
Reaching out to guest bloggers, or owners of other influential blogs in your field, creating videos and infographics (which are easily shared), staying the course and not quitting on your content marketing efforts; and perhaps most importantly, creating top quality content: these are your goals.
Traction Channel 9: Email Marketing (ch.14)
Finding them (content marketing is linked to this – inviting people to give you their email address (something of value to you and your business) in exchange for something of value to them (your valuable content that will help shed new light on an issue that’s of interest and relevance to them). This is the free market exchange.
Another way of using email marketing for finding customers is to create a mini-email course. I’ve personally learned the most (admittedly I’m only a beginner here) from Rob Walling who has a great email course about creating – an email course! See Drip.com and lifecycle emails in general that he explores as a concept.
Also: check out advertising for customers by placing an in-email advertisement on a complementary product/service’s email list (p.110)
Engaging your customers
Customer activation is a critical and often-overlooked component of building a successful product. “Activating” a customer means getting them to engage with your product enough that they are an active customer”
Traction channel 9: Email Marketing, p.111
First you need to determine the critical steps a customer needs to carry out in your product, which you judge that they need to carry out in order to have become engaged successfully in your product.
Then, make sure people carry out those steps you judge necessary, by tailoring emails to help them do just that.
(By the way, this is where messaging automation comes in real handy – we use Intercom in Complyfile, creating specific ‘events’ in the onboarding/product use workflow, which causes the triggering of an email to our customers to both congratulate them on successful deployment of a key part of the product, and also to guide them on the next useful step).
Retaining your customers
The ‘retention email’ is a great one. It’s an email that’s closely linked to the engagement emails described above, but for example what it does is send a weekly or daily summary of to-do items or actions recently taken.
This is a great ‘sticky’ actionable email, as in and of itself it can become a to-do list, generated by the product, is of value to the customer, but it’s also outside of your product, sitting in the email inbox of your customer.
Intercom do this as well, for new users who’ve either signed up to your website, or software product. So does our CRM provider, OnePageCRM.
Creating revenue & customer referrals through email
Basically this is by creating upsell opportunities for existing customers, educating them about the value offering in the subscription / product package at the next higher level than the one they’re on at present, and creating an easy opportunity for them to avail of an opportunity to upgrade.
The same applies for referrals. By asking your existing customers to make a referral of your business to someone they know, you can in return offer them something of value to them – either an upgrade to a higher package, or a time-limited offer, or a free month’s usage of your product.
The key part here is to get specific on the type of referral you’re looking for e.g. something along the lines of ‘we find the type of people who appreciated getting a referral work in X industry, at Y job role, and are experiencing Z issue in their workplace’.
Guide your customer and help them make a successful referral.
In return, make it super easy for them to avail of the discount / offer / free month that you’ve promised in return.
If not, you’re not keeping your side of the agreement: honour both the letter and the spirit of the transaction. (DropBox and Groupon are cited by the authors as being supremely successful exponents of this use of email).
Tactics and Targets
Explore and ensure you do this thoroughly:
- email deliverability (in Complyfile we use Mandrill, a scalable API for delivering transactional based emails),
- A/B split testing,
- the email address used to send your email from (as this communicates a lot about the message being delivered)
Traction Channel 10: Viral Marketing (ch.15)
Every user you acquire brings in at least one other user”
Traction Channel 10: Viral Marketing
To achieve exponential growth is extremely difficult (outlying consumer start-ups such as Facebook, twitter and WhatsApp achieved it), however “meaningful growth” can be achieved, even if that growth isn’t exponential like the companies mentioned above.
Remember, counsel the authors:
Viral marketing strategy begins and ends with viral loops”
Traction Channel 10: Viral Marketing, p.119
So, what is a viral loop?
It’s simply where a customer is exposed to your product or service, and that customer tells other potential customers about your product or service; the potential customers then become exposed to your product or service, becoming customers themselves.
Or, in other words, “word of mouth”.
But the secret sauce is where you build the potential for virality into your product through either:
- building a network effect (think: Skype’s of value when you know others have Skype)
- encouraging collaboration (think: Google Docs)
- embedding virality into your communications (think: ‘Sent from my iPhone’)
- incentivizing customers from within your product to create a viral loop (think: extra storage on Dropbox for a successful referral)
- creating embeddable buttons/widgets for placement on third party sites (think: YouTube on other sites)
How do you know if you have a viral loop that is working?
To do this you must understand two concepts.
- The viral coefficient
- The viral cycle time
It’s easiest to simply quote here from page 121. The authors reference heavily Andrew Chen in this chapter, who’s one of the world experts in this traction channel:
The viral coefficient, or K, is the number of additional customers you can get for each customer bring in.
The viral coefficient formula is:
K = i * conversion percentage
- "K" is the viral coefficient
- "i" is the number of invites sent per user, and
- "conversion %" is the % of customers who sign up after receiving an invitation
For example, if your customers send out an average of three invites and two of those people [who you are invited] usually convert to [become] new customers, your viral coefficient would be:
K = 3 * (2/3) = 2
In practice what does this mean?
Simply that if you have 100 new customers then, assuming that they each send out three invitations to use your product, and assuming two out of every three people who were invited take up the referral made by your existing customers, you would gain 200 users/customers to your service- for free.
So what’s a good viral coefficient?
Anything over 1 equates to exponential growth, and anything ever 0.5 is seriously helpful as well.
The two main variables that you can control are in achieving a decent viral coefficient number:
- "i" = the number of invites sent per user, and
- "conversion %" = the % of customers who sign up after receiving an invitation
Remember we mentioned the viral cycle time? This is simply the measure (p.123) of:
how long it takes a user to go through your viral loop… two viral loops with the same viral coefficient [number] but [with] different viral cycle times will end up with dramatically different outcomes: the shorter this time, the better”.
Viral cycle time
How do you shorten your viral cycle time, if that’s so important?
- Create urgency
- Incentivise movement through your viral loop
- Simplify every step in the viral cycle
Put another way, to increase your viral coefficient number in an upwards direction, work on decreasing the time part of the viral cycle time in a downwards direction.
(Speaking personally I loved the clarity and quality of content in this chapter).
On the tactical side the authors strongly encourage readers to test and optimize all aspects of the sign up funnel for your product/service simply on the basis that:
Viral growth is impossible if you have a low signup percentage because then you have no chance of a decent viral coefficient”
Traction Channel 10: Viral Marketing
There is a very helpful a list of such items to test on page 125.
The final takeaway from this chapter, for me, was: think about the virality as an inherently deep part of your product strategy, and not simply a tactic or marketing strategy.
Traction Channel 11: Engineering as Marketing (ch.16)
The case for spending engineering resources on marketing becomes much stronger when you think about the resultant tools as assets. These tools have the potential to become a continual source of leads that make up the majority of your traction”
Engineering as Marketing, p.132
In interviews with the founders of HubSpot (marketing automation software), WP Engine (WordPress hosting), and Moz (SEO software), the authors explore how these companies built useful free tools/websites which were of significant value to users and which produced qualified leads as a result.
The authors and advise the reader to put such micro sites on their own domains for two reasons: it is easier to share a simple site, and you can leverage the site for SEO as well.
A very useful checklist is provided by one of the interviewees, Zack Lynford, founder of Optimozo and Voodoo:
- Provide something of true value for free no strings attached
- Make that offering extremely relevant to your core business
- Demonstrate that value ASAP
The authors reiterate that while, yes, engineering resources are precious and expensive, it is also critically important to attempt to resist simply using those valuable engineering resources on only building the product. (This is what most companies do).
Traction Channel 12: Business Development (ch.17)
I read a great quotation recently about the tie-up between Facebook and Uber: it was a great business development deal:
In Facebook's first foray into the transportation business, the firm has agreed to work with Uber to allow users to hail Uber cabs directly from the Messenger app”
Facebook tie-up with Uber
Or as the authors say:
Business development is like sales with one key distinction: it is primarily focused on exchanging value through partnership, whereas sales primarily focuses on exchanging dollars for a product"
Business Development, p.137
The following are the major types of business development (“BD”) partnerships:
- Standard partnerships
- Joint ventures
- Distribution deal
- Supply partnerships
Understanding a partner’s goals is key to creating a mutually beneficial relationship” (p.140).
Business Development, p.140
Creating an exhaustive list / pipeline of potential BD partners is recommended by the authors on the advice of Charlie O Donnell, a venture capitalist at Brooklyn Bridge Ventures).
And once you have that pipeline of potential BD partners, use your network of contacts to get warm introductions.
And once you have a mutually beneficial BD deal set up, then just draw up a simple one page sheet of terms (p.144) covering:
- Lifetime of the deal
- How payments work
- Revenue shares
Remember, the reason why a larger organization might want to enter into a business development deal with a smaller company like yours is due to your laser-like focus on a niche area that is of relevance to a problem that they also share with you. Also: don’t get distracted by the lure of a potential big-name BD deal if that deal does not help to materially push you forward towards your traction goal.
Traction Channel 13: Sales (ch.18)
Entire libraries of books have been written about this particular traction channel. The business of creating and implementing a repeatable sales model, is the business of sales (p.147).
One simple but effective hack suggested is to make a list of everyone with him you have worked on a project, reach out to them and simply say this is what we are doing, do you know someone we should talk to that make sense?
The authors recommend the approach outlined by Neil Rackham in his book SPIN Selling (where SPIN = Situation, Problem, Implication, Need-payoff):
- Situation questions (learning about the buying situation of your prospect)
- Problem questions (clarifying your buyers pain points)
- Implication questions (making your prospects aware of the implications that stem from the problems that they are facing)
- Need-payoff questions (how do you feel the solution will help you? What impact do you feel it could have for you over the next few months?)
The chapter goes on to explore the challenge of making outbound calls, reaching the correct decision-makers, and in that process making sure you identify answers for the five areas listed below:
- Process - how does the company buy solutions like yours?
- Need - how badly do they need a solution like yours?
- Authority - who has the authority to make this purchase happened?
- Money - can they afford what you’re selling? How much does not solving it cost them?
- Estimated timing - what are the budget/decision timelines for purchase?
A good idea is to try and create a way in which to drive leads into the top of your sales funnel, by effective use of marketing awareness of your product created through other traction channels (p.153). That way your prospects are qualified when they hit your sales funnel.
The entrepreneur and venture capitalist Mark Suster recommends adopting a three bucket approach:
- Bucket A is for deals that will take between 0 to 3 months to close;
- Bucket B for deals that will take 3 to 12 months to close;
- Bucket C would take 12 months plus to close.
Bucket A deals should take a 66%+ of your time; Bucket B should take up the balance; and Bucket C should be left to marketing - not sales.
The job of the sales professional is to answer all of the buyer’s questions, and then create a trigger giving the prospect of a strong reason to buy. This also involves removing friction in the sales funnel – there’s another great list on page 156 of blockages that should be minimized.
Traction Channel 14: Affiliate Programmes (ch.19)
What is an affiliate programme?
An affiliate program is an arrangement where you pay people or companies for performing certain actions like making a sale or getting a qualified lead for you”
Traction Channel 14: Affiliate Programmes, p.159
Much of the focus of this chapter is on the largest affiliate networks, the different categories of affiliate networks and the different types of products sold on those networks. Note well:
Your ability to use an affiliate program effectively depends on how much you are willing to pay to acquire a customer. After all, with this channel you are paying out of pocket for the lead or sale”
Traction Channel 14: Affiliate Programmes, p.162
The recommendation of the authors is to go to an existing affiliate network to enable you to immediately gain access to this particular traction channel.
(The alternative is to create your own affiliate program independent of an existing network. This requires a lot more work but can have its own rewards. For example, you can pay your affiliates in use of your product instead of in cash (a bit like Dropbox giving people free storage space)).
The advice of the authors (p.165) in terms of what you should pay an affiliate as a start-up company is:
- a flat fee for the conversion gained through an affiliate network, or
- to pay an agreed percentage of the conversion that takes place
They finish the chapter off with a nicely challenging quotation from one of their interviewees who basically points out that you could spend the same amount on a Google AdWords campaign (with zero guarantee of conversions) as you could pay to your affiliate programme (the difference being with the affiliate programme that you have a guarantee that you only pay out for successful conversions; whereas you could pay a large GoogleAdWords campaign spend for a bunch of clicks, but with no actual conversions to new customers).
The risk rests with you in your Google AdWords campaign; compared to the affiliate programme where the risk lies with the affiliate, until such (happy) time as you have the converted lead.
Traction Channel 15: Existing Platforms (ch.20)
Existing platforms are websites, apps, or networks with huge numbers of users –sometimes in the hundreds of millions – that you can potentially leverage to get traction”.
Traction Channel 15: Existing Platforms
The chapter focuses on two primary platforms:
- App stores
- Social (networking) sites
In the app stores, ratings are one of the primary drivers to user adoption.
They matter to users, editors, press, makers.
Browser extensions or add-ons are also very useful ways get highly up the app stores’ rankings.
As for social sites on the authors point out there tends to be a gap for products that can provide a feature for an existing social site like Pinterest or Instagram that the social site has not built to date.
The danger/vulnerability in this approach is that they can simply build the future/product themselves and in one fell swoop a significant proportion of the market has gone.
But the authors give enough examples to show that this is a valuable strategy to potentially follow. (There is a great in-depth case study involving Evernote that is well with reading).
Traction Channel 16: Trade Shows (ch.20)
A couple of important questions to ask yourself in deciding what tradeshow, if any, you should attend include (p.176):
- What is your purpose in attending the show?
- Who do you expect to see at the tradeshow?
- How busy/crowded was it last year?
- Are the goals of the trade show aligned with your traction goals?
- What is your budget (if any?) for tradeshows for the upcoming year?
All of the above questions help you to clarify the return on investment you will need to justify attendance at any given number of shows.
I liked this line:
Your preparation for a trade show will determine how successful you will be”
Traction Channel 16: Trade Shows
- Schedule meetings ahead of time with key attendees.
- Send one-pagers with information about your service/product.
- Identify editors of key publications and arrange to meet them at the tradeshow stop your competitions/partners/bloggers.
- You can even host a dinner (hat tip to Mark Suster again), ideally with a recognized industry figurehead joining you which will enable you to easily attract other attendees to your hosted dinner.
Giveaways, getting people on the floor to come and visit your booth, videos: all of what you do you should have a specific call to action (page 181). Almost like a sales strategy, you need to have both inbound and outbound mechanisms for piquing people’s interest.
Traction Channel 17: Offline Events (ch.22)
Organising an off-line (“real world”) event is a great way to engage with potential customers about their problems, especially those customers not prone to actually normally meeting in one place or likely to engage with online advertising (p.183).
For those engaged with enterprise sales, often events can be especially helpful in terms of building relationships.
Organising your own conference, if there is sufficient interest, is a great potential traction channel. Your aim here is to facilitate the coming together of thought leaders in your industry, with a keynote speech, a follow-up discussion or two and possibly a breakout session; some form of panel discussion and an audience Q&A.
Remember here that you are looking to create something of value for your customers and potential customers, something which they cannot get elsewhere.
You can also play a key role in enabling such a group to network with each other professionally, building relationships and links that help everyone in the industry.
The scale of such an event can range from small modest event (like a meetup) of a couple of dozen people, to lavish conferences with thousands of attendees.
Don’t underestimate the logistical challenge of organizing an event stop good ones don’t happen without a ton of preparation. The authors highlight Rob Walling’s about his and Mike Taber’s MicroConf (conference for self-funded startups) and interview Rob about the benefits of investigating distraction channel.
Rob points out, in words that again echo Paul Graham, while this is a channel that does not easily scale, that is exactly the reason why start-up should be exploring it.
(An alternative, suggest the authors, to creating your own event is to sponsor an existing one).
Traction Channel 18: Speaking Engagements (ch.23)
This channel works well wherever there is a group of people in a room that - if you pitched them right - would move the needle for your business”
Traction Channel 18: Speaking Engagements, p.192
Waiting to be asked to speak is a bit like the “build it and they will come approach” to product development.
Like any other partner channel, you need to understand that organisers of events needs speakers to fill time at those events. So just get in contact with them with your idea for a talk. Even better, find out subjects/topics that they want to speak for!
Remember that you can focus on local, regional, national, and ultimately, international speaking events - but but that the larger the speaking event, the longer the lead time will be to have your proposed talk accepted by the event organizer (p.193).
Don’t be afraid to start small here, and build your way up as you build on your burgeoning speaking reputation.
And remember something critical as well.
(This is my personal opinion rather than that of the authors).
Most speakers fail to engage with or excite their audience.
Either they read out a prepared text (boring), or they take for granted the privileged opportunity given to them by the audience to teach them something in a very small window of time.
So, just capture your audience’s attention and tell them a story!
I remember when, during my training as a lawyer, the law firm I worked for in London invited in an eminent senior court advocate (Queen’s Counsel) to teach us on a discrete area of shipping law.
She quite literally for over one hour read out her prepared talk to the small group of young lawyers. We looked at each other not quite believing that our time was being wasted in this way!
I’ve always thought it better that you simply give me a copy of your talk (if you’re going to simply read it out word for word) and let me read it in my own time rather than force me to sit there listen to the soporific tone of your voice!
Three excellent tips that the authors give in this attraction channel include:
- try to make sure your talk is recorded (this could simply be on your phone if sophisticated recording facilities aren’t available)
- invite your audience to tweet / share on social media during your talk, providing them with an agreed # for your topic
- give them a specific call to action the end of your talk (p.195)
I have today ordered a book entitled “Present! A Techie’s Guide to Public Speaking” by Poornima Vijayashanker and Karen Catlin. I have heard rave reviews about it and I think it will help take readers (myself included) a step further in the traction channel identified here by the authors of Traction.
Traction Channel 19: Community Building (ch.23)
In some ways this is arguably one of the hardest traction channels - but all the more valuable if you can make it work for you:
Community building involves investing in the connections among your customers, fostering those relationships and helping them to bring more people into your start-ups circle”
Traction Channel 19: Community Building, p.198
Community building involves encouraging your product/service evangelists (those people who both love your product/service and are keen to tell others about it).
It also involves having a clear mission around which others can congregate stop transparency and listening actively to your community.
It’s also a two-way street.
Communities can be local, regional, national, or international in scale.
A great example here in Ireland of a national online community are the online forums in one of the businesses I’ve worked for, WeddingsOnline.ie, where users of the service can – through the forums on the site - connect with, learn from and share with other brides and grooms to be.
As Chris McCann of StartUp Digest says, and is quoted by the authors in this final traction channel:
When a company’s underlying value is in bringing people together, and where people matter in the system, that’s where this community stuff can really take off”
Traction Channel 19: Community Building, p.203
Appendix: Middle Ring Tests
Don’t ignore the Appendix!
The authors take the reader through each of the 19 different traction channels contained in their book and suggest a number of quick and easy-ish tests for each traction channel.
'Traction' is one of the books that should in my view have, in not much of your time owning it, thumbed pages, a creased spine, dog-eared page corners and coffee-cup marks here and there. It's not academic, but actionable.
It's clearly presented and structured (with some v3 possible improvements to come I hope), but it's also accessible to both the beginner, the technical and the non-technical.
Readers from both the the entrepreneurial community and the technology community will, along with any businesses looking to achieve significant growth, benefit from purchasing the book and acting on the authors' advice.