Summary: 19 min
Book reading time: 5h09
Book published in: 2014
- There are 19 marketing channels you can use to grow your startup.
- At any moment in time, one channel will drive most of your growth at your stage.
- You find the best channel by doing small tests.
- Once you found the right channel, you should invest everything you have got into it until it dies out.
- Then find a new channel.
What Traction Talks About
Traction: How Any Startup Can Achieve Explosive Customer Growth is a marketing book written by Gabriel Weinberg and Justin Mares, two entrepreneurs. The book is an exhaustive guide on the nineteen traditional marketing channels startups can use to start selling their product and grow. It taught me that if your business doesn’t have traction, it won’t work.
If you plan on building a company and don’t know yet how to get customers, this book is a must.
Summary of Traction Written by Gabriel Weinberg and Justin Mares
Chapter 1: Introduction to Traction
Traction is a sign that your company is taking off. Traction is growth.
Traction for a free product means that your user base is growing. On a paid product, it means that your customers are buying.
Traction trumps everything. Without traction, you don’t have a business.
There are nineteen different channels through which startups can grow. Many startups tried several channels until they found the right one.
- Most founders only consider using traction channels they already know. That means that far too many people focus on the same channels instead of focusing on the right ones. They are biased.
- It’s impossible to predict which channel will work best. You have to run tests.
Get one channel working that your competitors dismiss, and you will grow.
Here are the nineteen channels:
- Viral marketing: encouraging your users to get other users to sign up.
- PR: appearing in newspapers, TV, traditional media.
- Unconventional PR: Richard Branson in his balloon, celebrity marketing, etc.
- SEM (search engine marketing)
- Social and display ads: ads on social media
- Offline ads (TV, radio, billboards, newspaper, flyers, etc)
- SEO: Search Engine Optimization
- Content marketing (blogs)
- Email marketing
- Engineering as marketing: fixing problems for yourself, then selling/giving out for free that solution to other people that have the same problem.
- Targeting blogs: writing content in blogs where your potential customers hang out.
- Business development: partnering with other companies.
- Affiliate programs
- Using existing platforms: Facebook, Twitter, Reddit, TikTok, IG, YT, the Apple App store, etc
- Trade shows
- Offline events: small meetups, large conferences, webinars, festivals, etc
- Speaking engagement: speaking at conferences
- Community building: building communities around your product and services.
Chapter 2: The Bullseye Framework
The Bullseye framework helps you choose among one of these nineteen channels. The process is in five steps:
- Focus on what works.
Come up with a way to advertise for all of the nineteen channels. This step helps you beat the bias you may have for one channel or another.
To do so, build a spreadsheet with nineteen columns, each with a different acquisition channel. Afterward, write in each row ideas of how to advertise using that channel specifically. Add for each acquisition channel:
- The probability that it works
- The expected cost
- How many customers can you expect to acquire at that cost
- The timeframe needed to run the test.
You can download the spreadsheet here.
Get another spreadsheet and rank each of the channels in three different columns:
- First column: the most promising channels right now.
- Second column: some that are less promising
- Third column: the ones that are the least promising
If you have more than three channels in the first column, then get rid of enough channels until you only have three to rest.
Test to find out which channel is worth pursuing.
To know that, you should pay attention to:
- How much it will cost to acquire customers
- How many customers do you think are available through this channel
- Are the customers you’re getting the ones you need right now?
Find the channel that works best and use it.
Keep on experimenting to find what works and what doesn’t. At some point, an ideal channel will stop working -> you’ll have to choose a new one suiting the situation where you are then.
Research how startups like yours usually get traction.
Go talk to founders who failed (or succeeded) at what you are trying to do.
Chapter 3: Traction Thinking
All startups have a product. What differentiates successful from failing startups is the number of customers.
The number one cause of startup failure is a lack of customers.
This is why you should focus on getting customers as much as you focus on developing the product.
A startup with a crappy product and a lot of customers can survive and improve the product. A startup with a great product and zero customers will die.
Most startups think they only need to build something people want. It’s not enough.
You also need to make money from it. Sometimes, there is no market for your product, the market is too small, too hard to reach, or too competitive.
The product trap: fallacy expressed when a startup thinks the product alone will attract customers and fail to build traction as they build their product.
This explains the 50% rule: spend 50% of the time on getting traction, and 50% on product development. Get them to feed each other (adapt the product according to market feedback).
If you focus on product first then traction, you may need to go through yet another cycle of product development.
Working on a product is done in three phases:
- Phase 1: make something people want.
- Phase 2: market something people want.
- Phase 3: scale your business.
In Phase 1, you should work 50% of the time on your product, and 50% of the time on getting traction. You will most likely NOT get traction in a scalable way.
As Paul Graham explains: “in the beginning, you are forced to do things that don’t scale and recruit your users manually: calls, send emails, do speaking engagement, write guest posts…”
Startups that take off, take off because founders make them take off.
Must-do of Phase 1: get the first few customers.
Phase 2 is reached when you reach market fit. Your product works and your customers like it. You can then position yourself in the market and boost your marketing. Must-do of Phase 2: getting enough customers so you can be cash-flow positive.
Phase 3 is when you have an established business model, a significant position in the market, and a focus on scaling and dominating. Must-do of Phase 3: increase your earnings, scale your marketing, build real sustainability.
Traction channels will evolve along with the different phases. Growth is like an exponential curve. The beginning is slow, but as time goes on and traction channels open, the number of users explodes, then the channel becomes saturated, and you need to find a new channel to unlock.
The needed traction to get financed depends on your market and the competitiveness. Furthermore, you should talk to investors that understand what you are doing, so they’ll be more lenient if you don’t have too much traction.
A startup can be awesome if you believe in it. If not, it can get old pretty quickly.
Adopters VS outliers: The first like your product, the second like you as a person. Both of these people will be your first customers.
How to choose whether to give up or not?
Find bright spots (people that really engage with your product) and find out why they like your product. See if you can expand them. If you can’t, it’s time to pivot. Also, find out if you are too early or not, and if yes, why you would be.
Chapter 4: Traction Testing
Step 1: test channels in your inner circle.
Step 2: when you find one, tweak it until you find something that works.
The law of crappy click-through rate: at some point, any channel will be oversaturated. To combat that, you should be continually experimenting with testing different marketing channels and strategies, find one that works before it becomes saturated, then hop on to the next one.
Focusing on one channel and optimizing takes time and resources.
You should only do it AFTER you tested the channel and got proof it could work.
You optimize a marketing channel by running split tests. Making split test a habit will improve your efficiency in a traction channel by 2-3x.
Embrace online tools to understand the efficiency of your ad strategy.
As you are running with your three different channels, you should add the numbers in a spreadsheet to compare.
Metrics to keep in mind:
- Cost per customer acquisition
- The lifetime value of a customer
- Cost per click
- Buy/click ratio
Chapter 5: Critical Path: Deciding What To Work On: The One Thing
What you choose to do should directly be related to getting traction.
You should always have a traction goal to work towards. It can be 1000 free users, 100 paying users, or 10% more users.
The critical path is the path that defines reaching traction goals with the fewest and minimum steps.
Work on the first step and nothing else until you reach it. BTW, your original plan to get traction will likely end up wrong.
Define the critical path of your company as much as you define the critical path of your employees.
Three reasons why founders ignore some potential traction channels:
- They are out of their field of vision.
- They refuse to consider some channels they see negatively, like sales or affiliate marketing.
- Bias against schlep (annoying things that seem to be time-consuming).
Which traction channels are you currently biased for or against? Make sure you take each channel seriously.
When you consider weird or untried channels, you often end up competition-free, and can grow quickly.
We will now have a look at the nineteen traction channels.
First Traction Channel: Viral Marketing
Getting existing users to get their friends to use your product. What fueled Twitter, Facebook, and WhatsApp. However, as good as your product may be, it is unlikely that true viral marketing only works by itself.
To use this channel, you have to create viral loops:
- A user uses a product.
- That user tells their friends about it
- They become users and tell their friends about it.
- It repeats.
There are several ways to achieve viral marketing.
- Word of mouth
- Inherent virality: network effects
- Collaboration: valuable on its own but even more so as you encourage adoption (Google docs).
- Incentives: Dropbox gives you more free space if you get other people to sign up
- Embedding content: Reddit and Youtube
There are two factors that drive viral growth: viral coefficient and viral cycle time.
Viral coefficient, k, is how many additional users you bring for each user.
k=i X “conversation percentage”
i is the number of additional users that are invited, and cp is the number of users that sign up.
Eg: a new user sends an invite to three of his friend, and 2 sign up.
k= 3*(2/3)= 2.
Any viral coefficient above 1 is exponential. Any above 0,5 helps you immensely.
Viral cycle time: a measure of how long it takes a user to go through the loop. The shorter, the better.
It is important to create a target number of users and work to reach them.
Loop design: all of the ways your customers can get into the loop: ads, Facebook pages, tweets, etc. Draw a map of the entire process and cut off unnecessary steps to decrease friction.
To be successful, users need to like and repeatedly use your product.
Distribution mechanisms: the most common are email and social media platforms. Try new platforms where it is not so crowded yet. Marketing is constantly becoming more saturated.
Invitation: when users who signed up invite their friends. Invitations are short, and sometimes contain incentives.
Understanding why people are clicking on your link will help you improve your invites.
Things to test:
- Button VS text links
- Location of your CTA
- Size, color, and contrast of your action buttons
- Page speed
- Site copy
- Signs of social proof (logo of media brand, pics of people, companies)
- Number of form fields
- Allowing users to test the product before signing up
- Ease of sign-up (FB login, for example)
- Length of the sign-up process
All optimizations are worthy to test: sometimes, changing one word in the headline can have a big impact.
Viral pocket: where users grow fast (Eg: growing fast in South Africa and nowhere else).
Seeding: get new users in your viral loop.
Viral mistakes not to make:
- Adding viral features to a product that is not viral
- Bad products not adding value going viral
- Not enough split testing
- Not understanding how users share your product
- Not getting coaching from people who have done it
- Considering virality as a tactic and not as an important part of the strategy.
The best way to create a viral loop is to copy someone else’s and tweak it until it works.
Second Traction Channel: PR
Big media read small media and pick up stories from there -> seek to appear in the media that the big media read. Blogs compete to get stories first, newspapers compete to confirm, and tv competes to airtime it.
When the NYT writes about you, they are doing you a favor because there is a finite amount of space in the paper. When Business Insider writes about you, you are doing them a favor because more content = more money because it is a blog.
Events that get people’s attention:
- raising money
- launching a new product
- breaking a usage barrier
- a PR stunt
- big partnership
- special industry report
When you have small announcements, bound them into one big.
When you pitch to media outlets, it is your job to present it in a way that makes a story compelling. You need to sell that story.
After pitching small blogs, go to bigger ones.
Follow influencers in your industry and pitch blogs they often link to.
Once you get your story: submit it to community sites (Digg, Reddit, Hacker News); share it on social networks; send it to influencers; ping blogs in the space.
Third Traction Channel: Unconventional PR
Do something crazy or funny that gets media attention. WePay, the PayPal competitor, installed a giant block of ice at a PayPal conference because PayPal froze some customers’ accounts. Half.com renamed the town of Halfway into…half.com.
Be nice: send cookies, cakes, handwritten notes, or whatever to your customer when they buy from you, or to people that mention your product on Twitter, give free swags (t-shirts, etc), send personal emails thanking users, etc.
Viral videos: a blender company started a Youtube show called “will it blend”, and they started blending pretty much anything.
Organize contests and giveaways.
Be exceptionally caring to your customers. When you do something nice, it is picked up by the media.
If you go to a city for an event or anything else, email your customers and invite them out for dinner.