Traction: The Key to Startup Success

November 29, 2023

By Graham McFarland, VAULT COO

Traction is the ultimate validation that your startup is on the right track. It's not just about revenue from selling your product or service, but also the confirmation that someone sees value in what you offer. Whether it's a paying customer or someone investing their time to help you validate your idea in front of their own customers, each instance of traction is a step forward for your startup.

Control the Narrative

One of the best things about traction is that it gives you control over the narrative. It's a powerful tool that puts you in a position of strength, as no investor can discount the value of real customers. Traction gives you currency and confidence, reducing the risk for all stakeholders and providing early momentum to build upon. It's like having bullets in a gunfight, protecting you from detractors who may doubt your idea. With traction, your hypothesis becomes a proven result, and you can confidently challenge naysayers to explain why your customers are wrong.

Traction versus Revenue

I hear many angel and venture investors say that a business’ traction is a key decision point for making an investment. Why – because it provides proof that the business has legs. It reduces the risk for all involved and provides early momentum on which to build. Once I had an investor who just didn’t understand traction. At the time, we had a dozen subscribers paying us $39 monthly for our new service and two enterprise customers who were piloting our service. He immediately discounted the two pilots because in his mind he heard the word “free” instead of inquiring further. When I stopped him and let him know that one of the pilot programs in progress has a dedicated team that invested over 200 hours last month in integrating, evaluating, and providing feedback, he changed his tune. Although we generated no revenue during the pilot, this company provided valuable feedback that improved our product, not to mention they became our first $1M customer the next year.

Game changer

The morale of the story is that YES, traction is and should be your number one priority. It is required for success, but not just for fundraising but for your own independence. Your best investor is a customer! Traction is a result of selling, however, may not always immediately come in the form of revenue. Your customer's investment in time, energy, and resources is just as valuable as a deposit into your bank account.

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At Vault Innovation Group, we’re more than just another custom software development company — we’re a partner in your success. We specialize in helping companies ideate, build, and develop technology solutions across multiple industries. For over a decade, we’ve solved design challenges, shipped purpose-driven products and software, and have successfully helped launch more than 60 tech companies. With a proven track record of results, VAULT uses technology to grow your business according to your specific goals. 

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