Traction

Traction

How Any Startup Can Achieve Explosive Customer Growth

Gabriel Weinberg (10/10)

Summary

Two successful startup founders offer a comprehensive overview of the various ways startups can achieve strong, sustainable growth, and a guide to choosing the ones that will make the difference.

Review

This changed my perspective on marketing strategy.

I've been struggling with the general aim "how do I get more podcast listeners" and this book helped break that down into a really digestible answer.

It took me a while to read because I had to stop and jot down ideas every few pages (a good thing!)

Notes

Preface: Traction Trumps Everything

  • "Traction is the best way to improve your chances of startup success. Traction is a sign that something is working. If you charge for your product, it means customers are buying. If your product is free, it's a growing user base."
  • "I made two large traction mistakes here. First, I failed to have a concrete traction goal... Second, I was biased by my previous experience."
  • "We've hit the bullseye repeatedly, and so can you."

Chapter One: Traction Channels

  • "Traction is a sign that your company is taking off."
  • "Traction is basically quantitative evidence of customer demand."
  • "The only essential thing is growth. Everything else we associate with startups follows from growth."
  • Traction channels are "marketing and distribution channels through which your startup can get traction: real customer growth."
  • "Until you start running tests, it's difficult to tell which channel is the best one for you right now."
  • "The right channel is often an underutilized one. Get one channel working that your competitors dismiss, and you can grow rapidly while they languish."

Chapter Two: Traction Thinking

  • The 50% rule: "spend your time constructing your product or service and testing traction channels in parallel."
  • Doing traction and product dev in the short term might slow short term results but will help grow long term results.
  • You need a traction goal. Early on, this is either making enough to be profitable or enough to get investors.
  • There are three phases to growing a product or service. First, make something people want. Second, market something people want. Third, scale your business.
  • In phase 1, you do "things that don't scale." Give talks, write guest posts, email people. This is manual user acquisition.

Chapter Three: Bullseye

  • It is very likely that one marketing channel is optimal
  • "Poor distribution--not product--is the number one cause of failure."
  • Bullseye forces you to take all traction channels more seriously than you would otherwise.
  • "focus on successive rounds of parallel tests."
  • "What Lean is to product development, Bullseye is to traction"
  • Talk to founders a few steps ahead of you. (Always a good idea)
The Three Step Bullseye Framework

1- The Outer Ring: What's Possible

  • Brainstorm every single traction channel. Imagine what success would look like for that channel and write it down in the outer ring.
  • You should be able to think of at least one idea for every channel.

2- The Middle Ring: What's Probable

  • The second step is running cheap traction tests in the channels that seem most promising. You can run multiple experiments at the same time.
  • When testing, you are not trying to get a lot of traction in a channel just yet. You are simply trying to determine if it's a channel that could move the needle.
  • Your main consideration is speed. Getting data to test assumptions.

3- The Inner Ring: What's Working

  • Focus exclusively on the channel that will move the needle then wring every bit out of it.

Chapter Four: Traction Testing

  • "Over time, all marketing strategies become saturated."
  • Use a spreadsheet to track and compare tests on fields like conversion rate, acquisition costs, lifetime value of a customer

Tests should be designed to answer three questions

  1. How much does it cost to acquire each customer through this channel strategy?
  2. How many customers are available through this channel strategy?
  3. Are the customers you are getting through this channel the ones you want right now?

Inner ring tests have two purposes

  1. Optimize your chosen channel strategy to make it the best it can be.
  2. Uncover better strategies within this traction channel.

Chapter Five: Critical Path

  • You should always have an explicit traction goal. Pick a target such that hitting the mark would change things significantly for your company's outcome.
  • Explicitly set intermediate milestones.
  • Only make product updates that are most necessary to reach the milestones that are part of the critical path.
  • "A major function of this book is simply helping you overcome your biases against particular traction channels by educating you about them."
  • Lay out your milestones and "quantify traction subgoals and put them on a calendar so you can properly monitor your progress over time."

Chapter Six: Targeting Blogs

  • Target blogs that your prospective customers are reading.
  • Using tactics that don't scale is one of the best ways to get your first customers. (Paul Graham)
  • Mint (the budgeting app) used this strategy extraordinarily well when they first launched by partnering with/ getting press from many of the top personal finance blogs.
  • Places to find these blogs
  • Search Engines, YouTube, Delicious, Twitter, Social Mention, 1 on 1 interactions with real humans.
  • Also consider link sharing communities like HackerNews, Reddit, Product Hunt.
  • Offer to write guest posts. Make special offers exclusively for readers of the blog.

Chapter Seven: Publicity

  • Getting featured by large publications like The Huffington Post or TechCrunch are great marketing tactics early on. These days, media funnels bottom up. Small publications find and validate stories and larger publications find out about new and interesting stories from the smaller publications.
  • "If you have a fascinating story with broad appeal, media outlets now want to hear from you because you will drive visits and make them more money."
  • "Blogs have an enormous influence on other blogs, making it possible to turn a post on a site with only a little traffic into posts on much bigger sites"
  • Follow reporters in your niche on Twitter and add value to their content.

Chapter Eight: Unconventional PR

  • These are the creative [[The Third Door]] strategies that can move the needle.
  • It's Blendtec creating the "Will It Blend" series.
  • It's WePay putting a block of ice outside of Paypal's big conference.
  • It's exceeding customer expectations and overdelivering.
  • "Doing these types of things has worked so well for Grasshopper that it has hired two full-time employees whose sole responsibility is to delight customers."
  • "Holding a contest is a great, repeatable way to generate publicity and get some word of mouth."
  • "Zappos classifies customer service as a marketing investment"
  • "Do something big, cheap, fun, and original."
  • "Be awesome to your customers and good things follow."

Chapter Nine: Search Engine Marketing (SEM) (Paid Ads)

  • "online marketers spend more than $100 million each day on Google's AdWords platform."
  • "SEM works well for companies looking to sell directly to their target customer. You are capturing people who are actively searching for solutions."
  • Click-Through Rate (CTR) - the percentage of ad impressions that result in clicks to your site.
  • Cost per Click (CPC)
  • Cost per Acquisition (CPA)
  • CPA = CPC/ conversion percentage
  • Consider driving traffic to landing pages before making large investments in product. This way you can cheaply test and validate ideas.
  • "The basic SEM process is to find high-potential keywords, group them into ad groups, and then test different ad copy and landing pages within each ad group."
  • "Long-tail keywords are less competitive and have lower search volumes, which make them ideal for testing on smaller groups of customers."
  • "You will also want to include the keyword at least once in the body of your ad."
  • "someone just starting out in this channel should begin testing just four ads."
  • "You should also consider luring people back to your site by retargeting through Google AdWords."

Chapter Ten: Social and Display Ads

  • "The goal of social ads is often awareness oriented, not conversion oriented."
  • "Instead of directing people to a conversion page, direct them to a piece of content that explains why you developed your product and your broader mission."
  • "If you've invested time and energy creating a great piece of content, spending a little bit of money to ensure that content gets wide distribution makes sense."
  • "In one case, after spending just $15 on Twitter ads, they [Airbrake] received hundreds or organic retweets, tens of Facebook likes, and two submissions to reddit and Hacker News."
  • "LinkedIn ads allow targeting by job title, company, industry, or other business demographics."
  • "Facebook offers companies the ability to buy targeted ads based on user's interests, pages they like, or even people they're connected with."
  • "When you buy a Facebook ad, you're buying more than just a targeted fan; you're buying the opportunity to access that person's social graph. With the proper incentives, fans will share and recommend your brand to their connections."

Chapter Eleven: Offline Ads

  • "To get really cheap offline ads, look for remnant advertising. Remnant advertising is ad space that is currently being unused."
  • "If you are not sensitive to location or timing, you can get substantial discounts by committing to buy remnant inventory."
  • "Transit ads are placed in or on buses, taxis, benches, and bus shelters." These ads "can be effective as a direct-response tool because people in transit are a captive audience."
  • "Run cheap tests by first targeting local markets"
  • "Seek out remnant ad inventory for the highest discounts."
  • "Use unique codes or Web addresses to track the effectiveness of different online ad campaigns."

Chapter Twelve: Search Engine Optimization

  • "SEO is starting with a content strategy and finding a way to attract relevant visitors through search engines."
  • "SEO allows you to amplify all the good things you're already doing in other traction channels."
  • "Only about 10 percent of clicks occur beyond the first ten links, so you want to be as high up on the first page as possible."
  • You want to find terms that have enough volume such that if you captured 10 percent of the searches for a given term then it would be meaningful."
  • "Using tools like Open Site Explorer, examine the number of links competitors have for a given term."
  • "You can further test keywords by buying SEM ads against them."
  • "For ten to twenty dollars per search term, you can pay someone to write an article that you won't be embarrassed to put on your Web site."
  • "Another way to approach long-tail SEO is to use content that naturally flows from your business... what data do we collect or generate that other people may find useful?"
  • Creating useful widgets for other sites that contain useful functionality can be a good approach to SEO.
  • Sketchy tactics only ever work in the short term.

Chapter Thirteen: Content Marketing

  • Ping influencers in your niche on twitter to get feedback about your writing.
  • Engage with target customers on link building forums like Quora or Reddit.
  • Grow email lists and blog traffic by giving out good content like e-books and infographics.
  • "The most common hurdle in content marketing is writer's block. To overcome it, simply write about the problems facing your target customers."
  • "The secret to shareable content is showing readers they have a problems they didn't know about, or at least couldn't fully articulate."
  • "One of the best methods of growing your audience is guest posting."
  • Having a strong blog can positively benefit at least 8 other traction channels: SEO, publicity, email marketing, targeting blogs, community building, offline events, existing platforms, and business development."
  • If you blog, dedicate at least six months to it. Do things that don't scale early on. Produce in-depth posts you can't find anywhere else. Only good content succeeds.

Chapter Fourteen: Email Marketing

  • "A popular approach to building an email list is creating a short, free course related to your area of expertise."
  • Many companies now use ads to get leads to a page that just asks for an email. Then, they will use email marketing over the course of a month to sell a prospect.

Chapter Fifteen: Viral Marketing

  • "Viral marketing is the process of getting your existing customers to refer others to your product."
  • "literally "going viral" means that every user brings in at least one other user"
  • Big examples of this are social media sites, Dropbox, Uber, and Skype.

Chapter Sixteen: Engineering as Marketing

  • Build cool (often free)stuff related to your product that gets attention.
  • An example could be a digital marketing software company creating a free widget that tells you how much traffic you get.
  • Another example is https://playingwithfire.co/retirementcalculator/ they give you a free FIRE themed calculator and that leads you to buy the book/watch the documentary.  
  • Make great free tools that make people want to buy your paid tools.

Chapter Seventeen: Business Development

  • Exchange value through mutually beneficial partnerships with other businesses.
  • Focus on the incentives of the other business and on what your partnership would do that helps them.
  • "The most important thing is to find out who is in charge of the metric you've targeted. If you think your partnership will help your partner sell more T-shirts, be sure to talk to the person most in charge of selling more T-shirts."
  • THINK WIN-WIN.
  • Have a pipeline of deals going at once.

Chapter Eighteen: Sales

  • The authors recommend the SPIN Framework by Neil Rackham for being effective on cold calls. SPIN stands for situation, problem, implication, need-payoff.
  • Make sure the person you are selling to has enough decision making authority.
  • Don't rule out cold-calling. Build a repeatable model. Get the buyer to commit to timelines. Keep the customer's perspective in mind.

Chapter Nineteen: Affiliate Programs

  • Have people sell your product for you for some reward. This could be a flat fee per sale, a % of sales, or other benefits (swag, exclusive product features).
  • You can join existing networks of affiliate marketers to jumpstart your potential in this channel. If it goes well, you can justify customizing your own program later on.
  • This is a low-risk channel, if someone violates your affiliate rules (assuming the rules are clearly stated and fair) you don't have to pay them.
  • Keep your payouts simple. Don't overlook your current customers as potential affiliates.

Chapter Twenty: Existing Platforms

  • Apps and Browser Extensions
  • Making apps can tap into the huge existing markets of the app store (and other platform's marketplaces)
  • Don't write this off as a way to get users.
  • Social Media and Other Sites
  • "First figure out where your target customer hangs out online. Then create a strategy to target potential customers on these existing platforms."
  • Often it makes sense to focus on platforms that are just taking off.

Chapter Twenty-One: Trade Shows

  • Going to trade shows and conferences can be great ways to meet potential customers or business partners.
  • Be intentional about what conferences you want to go to and why you want to go them. Ask for a list of attendees and start making appointments for meetings or dinners ahead of time.
  • "Have an inbound and outbound strategy for your booth. Do something proactive and creative. Include a strong call to action on every item you give out." Tote bags are usually a good default give-away item.

Chapter Twenty-Two: Offline Events

  • Attending or hosting conferences can be extremely rewarding. Conferences can be as simple as one-day meetup or a group of people meeting for Pizza.
  • Events could include throwing hackathons, hosting parties, bringing in speakers in the industry, or getting a group of likeminded people to just show up and chat.
  • "One of the reasons that offline events are effective is that so few startups are doing them"
  • "Early on when you're trying to get those first one thousand customers, you have to do things that don't scale. You have to take more risks."

Chapter Twenty-Three: Speaking Engagements

  • Start by giving free talks to small groups of potential customers or partners.
  • "We recommend trying to give at least one talk even if you choose not to pursue this channel."
  • "If you have a good idea for a talk and see an event that aligns with an area of your expertise, simply pitch your talk to the event organizers"
  • "Getting valuable early speaking experience is not difficult. Start by speaking for free at coworking spaces, nonprofits, and smaller conferences or events. Use there smaller-scale appearances to refine your talks and build your speaking reputation."
  • "To become a speaker you have to speak once. If you speak and you're good, people in the audience will ask you to speak at other events. That's just how it happens."
  • Record your speaking engagements. They can be useful to have for future marketing purposes.
  • "The best talks I've ever seen are where each slide is essentially a seven-minute story with a beginning, middle, and end."
  • "At most conferences there is a speaker's dinner, where presenters get to meet one another and network. If there isn't one scheduled" take the liberty of scheduling one.
  • "Remember that you are doing organizers a favor by presenting. Event organizers need to fill their time at events"
  • Submit proposals far in advance. "Tell a story on stage."

Chapter Twenty-Four: Community Building

  • Examples are Wikipedia, Stack Exchange, Yelp and Reddit.
  • When users generate valuable content for other users, there is massive potential for growth.
  • Be sure to set and enforce high standards to keep the community high quality from the start.

Appendix:

  • A middle ring test in phase I should take less than one month and cost under $1000.
  • Target ten niche blogs asking for reviews.
  • Contact five local reporters and try to get press.
  • Host a contest.
  • Run four search ads.
  • Try a small Facebook/Twitter ad campaign.
  • Offline Ads. Try to advertise on a podcast.
  • Make some content rich pages and try to get links to them on Google.
  • Content Marketing. Start a company blog and write one post every week for a month.
  • Email Marketing. Try to get a mention in some newsletter in your industry. Paid or free.
  • Make a simple free tool semi related to your company.
  • Business development. Reach out to 6 potential companies it might make sense to partner with.
  • Ask to speak at 3 local meetups.
  • Put together a mini-conference.
  • Join 3 online forums where your customers hang out and engage on at least twenty threads in each (do this over the course of a month to avoid looking spammy)