The answer to that question is simple and straightforward, and it’s not the answer that a lot of founders expect. This is because investors have a unique mindset, and the term ‘traction’ can mean different things to an investor than it does it for a founder.
When founders hear the word ‘traction,’ they think ‘customers’. This way of thinking can put a lot of unnecessary weight on a start-up founder’s shoulders. Of course, if you can go to an early or pre-seed round and show an investor that your product or service is already generating consistent and growing revenue, that’s always preferred. However, growing customers and generating revenue is easier said than done if you’re an investable entrepreneur whose business is just beginning.
Related: My Investment Campaign Isn’t Working–What Am I Doing Wrong?
Fortunately, ‘traction’ doesn’t have to mean paying customers as far as investors are concerned.
When you’re looking for investment, it’s much more helpful to think of traction as ‘validation.’ Think: What kinds of validation can you show an early stage investor to prove your idea is worth investing in?
The short answer is that you should show as many kinds of validation as you can!
Anything you can show as proof and evidence that your product is something your industry needs and your customer’s demand is considered validation. And when you can give an investor that ‘validation reassurance’, it will go a long way towards convincing them you’re the right horse to back.
What counts as validation?
There are many different avenues you could explore.
You could do a survey, but that will only work if you conduct the survey correctly. When conducting surveys, you’ll need to ask your audience more than the usual, “Will you buy our product or service when it’s available?” question (although that’s still an essential question to ask.) In fact, you should also include enough questions to identify your audience’s pain points, what solutions they’ve tried so far and why they’ve failed, and what they see as the gap in…