How does a start show the traction?

Buzzwords and interesting facts:What is really meant by “traction”

It is important for measuring success, pitches and media interest - but when can a startup show traction?

"If ideas or experiments show little traction, we end them again." Felix Haas from Amiando once put it. What exactly is meant by that?

There is no really apt German translation for this favorite word of startup bloggers and anglophile investors.

With “traction” the approximate direction of the term can be made out, but the entrepreneurial definition means more: It's about you quantitative evidence of customer demand, either the existing one or the one to be created. Well-known variables, for example with online services, are for example:

  • registered users
  • New registrations within a period of time
  • active users
  • revenue
  • Website traffic
  • Social media following
  • Etc.

These are general measures, depending on the type and market segment of the startup, more specific variables are more important. For an e-commerce startup, the returning customers are perhaps particularly relevant, for a community platform the recommendations per user or the time spent by the average user. The core is the meaningfulness of the size for the present business model. This can then be used, for example for a pitch, to demonstrate demand and, in particular, its increase. The term traction also includes the question, how well a startup can generate demand. Depending on how important it is to identify demand, traction can even become a decisive element when presenting a business idea.

In the discussion, traction usually appears as one of the central success criteria, along with team, product and business model. The traction sometimes results from the other factors, but it can also become a decisive competitive advantage in itself. As is well known, there are a number of online storage solutions, of which Dropbox is now clearly ahead in terms of user numbers. Not only the technology was decisive here, but also the way in which the founders brought their product to the people quickly and effectively.

With convincing evidence for traction, the success story that is so important for start-ups can also be told. Something is immediately relevant for the media when founders can show tons of new registrations for their business. And this reporting itself may in turn generate new interest.