Diary of a Financier

Bookshelf update: Traction

In Bookshelf on Tue 3 Feb 2015 at 06:45

Four takeaways from Justin Mayer & Gabriel Weinberg’s Traction: A Startup Guide to Getting Customers, as embodied by the following excerpts…

~~~~

1. The product trap:
The biggest mistake startups make is assuming ‘if you build it they will come.’  Focusing entirely on improving your product at the sacrifice of marketing is folly:

“Failing to pursue traction in parallel with product development. Many entrepreneurs think if you build a killer product your customers will be a path to your door.”

The three phases of developing a product:
i. Product:
Building something people want; doing things that don’t scale like getting feedback to refine a product

ii. Marketing:
You’ve made it to product/market fit, and now you’re fine-tuning your deliverable; something people want

iii. Scaling your business:
You have a proven product and significant market share, and now you’re focused on profitability

This alludes to Marc Andreessen’s “product/market fit,” and Peter Thiel’s “poor distribution—not product—is the number one cause of failure.”

Paul Graham also echos a counterintuitive philosophy mentioned explicitly above: “do things that don’t scale,” at least to start.  For example, manual user acquisition isn’t scalable, but founders who start with small, hand-to-hand combat engage a valuable core group of guinea pigs — a loyal community of evangelists who support their mission.  That’s the exact experience of the Slack founders, who so carefully recruited and collaborated with their early users that their highly responsive product improvements became part of their marketing process.

2. “The Bullseye Framework”:
A process for determining your product’s optimal marketing channels is an exercise that also prepares you for contingency plans (Plan B – Z) if your go-to fails:

The five step method:
i. Brainstorm:
Consider every one of the 19 traction channels (listed below), determining one way you’d Traction channels- Customer & business-oriented selection mapsimplement each with an estimate of their outcomes (e.g. costs/revenues/time-table); don’t skip any channels here so as to control for your biases

ii. Rank: The Bullseye Framework
Organize all of those traction channels into the three concentric circles of the Bullseye, including “most promising,” “potential,” and “long-shot” groups

iii. Prioritize:
Pick your top three, “most promising” ideas

iv. Test:
A soft roll-out of these top three ideas (e.g. buy 40 Facebook ads instead of 4,000) to empirically determine the outcomes you estimated in Brainstorming, including…

  • Cost to acquire customers?
  • How many customers are available?
  • Are these the right customers for you?

v. Focus:
Pick the dominant channel

3. Untraditional PR:
Uncommon marketing ploys like publicity stunts, customer appreciation campaigns, promotions, or competitions are attention-grabbing because they’re not as saturated as other channels:

“[This channel] doesn’t suffer from the crowding that other traction channels face… few [companies] focus on stunts that generate buzz.”

4. Platform-based growth:

“Some of the most successful startups grew by making bets on emerging platforms that were not yet saturated, where barriers to discovery were low. Betting on new platforms means that you’ll likely fail if the platform fails, but also dramatically lowers distribution risks…
i. Figure out where your major customers are hanging out online

ii. Figure out a strategy to target these niche platforms”

A good example is Evernote launching on Android in the OS’s infancy.

This reminds me of Chris Dixon’s observation of the “Push & Pull” eras of the internet, wherein meta derivative winners ride on the back of major platforms. Two examples are Travelocity:Google (in the active “pull” era) or Zynga:Facebook (in the passive “push” era more recently).

~~~~

The 19 key sales/marketing channels to gain traction (non-obvious ones in bold):

  • Viral Marketing
  • Public Relations (PR)
  • Unconventional PR
  • Search Engine Marketing (SEM)
  • Social & Display Ads
  • Offline Ads
  • Search Engine Optimization (SEO)
  • Content Marketing
  • Email Marketing
  • Engineering as Marketing
  • Targeting Blogs
  • Business Development (BD)
  • Sales
  • Affiliate Programs
  • Existing Platforms
  • Trade Shows
  • Offline Events
  • Speaking Engagements
  • Community Building (Evangelists & Meta websites)

More information can be found in the comment chains of the book’s online message board: Discussion; Supplemental resources

A more comprehensive synopsis can be found here: Book review

–Romeo

#Entrepreneur #Startup

Advertisements

Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s