First, what is traction? Traction is evidence that a company is taking off. A clearer definition would be quantitative evidence of customer demand.

Founders typically choose traction channels they’re familiar with. This behavioral pattern leads them away from choosing other channels that could produce definite results. And in many cases, less frequently used channels turn out to be the most effective channels in that industry. Also, you don’t know which traction channel will work best until you try.

The book introduces a total of 19 traction channels, and the key is to achieve rapid growth through one of them while creating a gap from competitors.

Traction Thinking

Almost all failed companies had a product. What they didn’t have was customers. Traction and product development have equal importance, so they should be given equal attention.

This is what we call the 50 percent rule: spend 50 percent of your time on product and 50 percent on traction.

Building what people want is essential for traction. However, this alone is not enough. There are 4 scenarios where companies fail to develop into a business even after building what people want.

Scenario 1: No real market

Money doesn’t accumulate. In other words, people don’t pay.

Scenario 2: Too small a market

The number of customers is too small to be profitable. The market is too small, making scaling difficult.

Scenario 3: Hard-to-reach market

The cost to reach customers is ridiculously expensive. This applies when selling relatively cheap products through direct sales personnel.

Scenario 4: Hypercompetitive market

Numerous competitors are also making similar products. In this case, it’s extremely difficult to acquire customers.

Naturally, thinking about traction alongside the product will delay product development. However, paradoxically, this effort will reduce the time it takes to actually reach the market.

Through this traction development, you can secure a stable flow of “cold” customers. Only through these people can you know if the market is accepting your product.

In Dropbox’s case, they tried search engine marketing while developing the product but found it wasn’t working. The cost to acquire a customer (CAC) was $230, but the product price (LTV) was $99. So they developed a new traction channel through viral marketing. They built a referral system into the product, which became their most successful growth engine.

To Pivot or Not to Pivot

We strongly believe that many startups give up way too early.

If you are starting out, are you ready to potentially do this for the next decade?

A startup can be awesome if you believe in it: if not, it can get old quickly.

If you’re considering a pivot, you should first look for evidence of product engagement. Even if it’s just three or four dedicated customers. If you find such engagement, it might be too early to give up.

… startup founders are usually forward thinking and as a result are often too early to market …

Bullseye

Peter Thiel said the following about finding channels for traction:

Engineers frequently fall victim to this because they do not understand distribution. Since they don’t know what works, and haven’t thought about it, they try some sales, BD, advertising, and viral marketing---everything but the kitchen sink. That is a really bad idea. It is likely that one channel is optimal. Most businesses actually get zero distribution channels to work. Poor distribution---not product---is the number one cause of failure. If you can get even a single distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.

Bullseye is a 3-step methodology for finding that one successful traction channel.

Outer ring: What’s possible

Write down how you could create successful traction through each of the 19 channels.

Since everyone starts with biases, this is a step to break through them. Therefore, it’s important to generate at least one idea for each traction channel.

Middle ring: What’s reasonable

Validate at low cost the channels that seem most likely to succeed.

At this stage, you don’t waste time by running multiple experiments in parallel. However, if you do too many things in parallel, it can reduce focus, so finding the right balance is necessary.

How should experiments be conducted?

How much does it cost to acquire customers (through this channel)?
How many customers can you acquire?
Are the customers coming in the kind of customers you want right now?

The most important thing at this stage is speed. Collect information quickly and validate your hypotheses.

Inner ring: What’s working

Focusing on a single core traction channel is the final stage of Bullseye.

Focusing on one channel is often confusing because there are cases where you leverage other channels. For example, let’s say you found that you need to focus on SEO. A good strategy for this is getting those links to become famous (getting publicity; another traction channel). Another example is viral marketing, which often happens through email marketing or platforms like Facebook (email marketing and platforms, 2 traction channels). However, the key is that you’re only leveraging other channels for the success of that one channel.

The 19 Channels