Traction Solves Everything

Make all your problems go away, through traction.

May 8, 2023

When building your early stage tech company and you are talking to investors, there are a dozen of factors you need to nail simultaneously to succeed at raising capital. The most important of which are team, timing, product, market, and positioning. At this stage, most of the things you know about these factors are assumptions at best. Hence, during the conversations you have, investors will attempt to find the weaknesses in your assumptions to assess the risk that is connected to an investment in your company. And it is very easy for anyone to find hypothetical reasons why your assumptions are wrong or why some thing might not work out. Luckily, there is one cheat code that allows you to bypass all of the potential factors speaking against an investment in your company: traction.

Traction solves everything. If you created something people love, it will show in your traction. No matter whether it's revenue, or interaction on a product, the most convincing way to prove what you are building should exist is backing it up with traction. If you can show your Northstar metric is growing significantly week-over-week, you don't need to convince people of team, timing, product, market, or positioning. The numbers speak for themselves. Yet, this is also the hardest thing to achieve. Traction acts like the bottom-line total of all the work you are doing and decisions you have made. There is no way to cheat it. So naturally, the tricky part is raising capital before you can show significant traction. And this is the case for almost all early stage companies at some point in their lifecycle.

If I had to translate the "traction solves everything" advice into practical terms, I would say "focus on building a working business". It sounds obvious, but it's easy to lose focus by working on things that seem important but don't ultimately move the needle on your core business. This includes fundraising, getting press, hiring people, attending conferences, and all sorts of other vanity metric increasing activities that don't have real impact on building a working business before you hit product-market fit. The good news is that if you focus on the right things, and are patient and persistent, traction will come. And traction solves everything.