Glossary

Traction

What is Traction for an early stage startup?

Traction for an early-stage startup are indicators of growth, including measurable progress, momentum and market adoption. It shows that the startup's product or service is gaining traction with customers and building interest in the market.

Why is traction important for early stage startups?
Traction serves as validation for both yourself and external stakeholders, such as investors, partners, and co-founders and can be critical in securing funding. By demonstrating tangible market demand for your product or service, traction confirms the potential viability of your venture as a genuine business opportunity in its early stages.

How can early stage startups demonstrate traction?

Revenue is usually the clearest indicator of traction. For an early stage startup, or one that is post MVP / pre revenue, there are common  traction metrics that can be used instead:

  • User/customer acquisition: The number of users or customers that the startup has acquired over a specific period of time can demonstrate that there is a legitimate demand for the product or service.
  • Engagement and retention: High engagement and retention show that the product is providing value and retaining its users.
  • Partnerships or integrations: The establishment of strategic partnerships, collaborations, or distribution agreements with other companies or influential individuals. Such alliances can provide access to new markets or enhance the startup's credibility.
  • Media buzz or other recognition: PR, awards, or industry recognition can indicate growing awareness and validation of the startup's product or service.

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