Build as much traction as early as you can


How much traction do you have?

There’s the golden word that I’m learning VCs want to see before all else. Build as much traction as early you can.

Are at the idea-phase? Tough, but have some metrics to show traction:

  • Number of signups / people willing to test you beta
  • Number of customer interviews and any trends that are showing up

Are you a freemium SaaS business, consider:

  • User Growth
  • Number of paid vs. free users
  • Churn or how many of your users return rather than moving on to the next best greatest thing

For enterprise businesses:

  • Have a pipeline
  • Number of paid customers
  • Maintenance revenue vs. product revenue

Obviously this isn’t the end all be all, but it can’t hurt to have since investors do look for companies with traction since it does imply that the founder has somewhat or will likely achieve product / market fit. But also consider this, if having traction were the ultimate decider, VC returns would a lot higher overall. Traction is just one for VCs to quickly sift through potential investment opportunities.

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