Past 5 Solutions Inc.

How to Create the Right Environment for Traction


Avatar of Sev Geraskin

by Sev Geraskin

Wed Feb 09 2022

  • Are you struggling to generate traction for your startup?

    Over the last couple of months, I chatted with over 100 startup founders and identified problems that might get in the way of progress.

    1. You could be married to your product idea.
    2. You could have prohibitively expensive user acquisition costs.
    3. You might measure growth using freemium users or headcount.
    4. You might be developing your product in a silo.
    5. You might be over-relying on contractors.

    So what do you need to set the right environment for traction?

    1. A deep understanding of your target market and what problem you are solving.

    As a startup CEO, you are a subject matter expert in your market niche and deeply understand the problems and opportunities. Thus, you are not married to your idea or product. You consider your idea valuable as long as it solves the problem in the market. Once the market shifts or the idea is invalidated, you move on.

    2. A marketing strategy that empowers you to reach the target market.

    Even if you solve a problem in your market, how will you reach your users? Is your product too complicated to explain and spread through word of mouth? Are you paying too much for user acquisition in a business where customer acquisition cost is the differentiator?

    3. A well-defined business model and obsessive focus on revenue.

    Too many startups measure their growth in free users, headcount, or other things. That's bullocks. 0 to 100 employees is not impressive. That's why so many people are getting laid off now. 0 to 1 million free users is also not remarkable. That's a guaranteed way to burn your capital on OpEx without discovering if any will pay for it. You are running a business, not a charity. 0 to $10 million ARR? Now, we are talking.

    4. A development plan that includes incremental milestones and deliverables.

    There is no such thing as development in a silo. You are disconnected from your market if you develop your product without user feedback for three months. Demand demos and transparency from your development team. Get them to partner with your customers and establish the feedback cycle early.

    5. A dedicated team of employees who are committed to your company.

    Are you relying on contractors? Mercenaries aren't going to protect your kingdom once you run out of money, and they sure ain't going to fight for you as hard as your home-grown troops. Read The Prince by Machiavelli. So yeah, you need a team, and to make it happen, you've got to give up some equity.

    By focusing on getting the business fundamentals right, you set the right environment and tilt the odds in your favour to generate traction, increase cash flow, and raise that next capital round.