It is in the Traction Gap that startups can fail and fail hard. They face great financial risk, and a limited amount of time to get things right. Without demonstrating traction, most investors won’t give startups the capital they need to make it to the third, go-to-scale, phase and beyond. It is a vulnerable moment. Before they know it, it’s too late: they are on the scrapheap that consumes 80+ percent of all startups.
Thinking about the go-to-market phase in terms of the Traction Gap Framework offers a conceptual model for surviving and thriving in this high-stakes environment. The Traction Gap Framework provides a number of sub-phases that we call value inflection points. These include:
– Minimum Viable Category (MVC):
Strictly speaking, this is part of the go-to-product phase, but it is a key part of the market engineering process. As you develop your product, you must concurrently invest in market engineering tasks. This means pinpointing your product category, and refining how you are creating, defining, or disrupting that category. In this phase, you should conduct proper validated market research that confirms that your chosen category can support your venture.
– Initial Product Release (IPR):
This is the point at which the product (often a Beta version) first becomes available to the public, and to the target user(s). At this stage, the team is seeking market and customer validation metrics.
– Minimum Viable Product (MVP):
The MVP is the most pared-down version of a product that customers are willing to purchase or use. It marks the first moment at which you have in your hands a product that is ready for the general market you want to capture.
– Minimum Viable Repeatability (MVR):
MVR is the smallest amount of repeatability a startup can demonstrate, including a growing preponderance of evidence that it has a valid market, business model, and ongoing product/market fit. Repeatability is not just about sales. You must also demonstrate product release repeatability, implementation success repeatability, and some marketing and lead generation repeatability.
– Minimum Viable Traction (MVT):
This is the point in a company’s maturity — indicated by a certain level of revenue growth, engagement, downloads, usage or other metrics — that demonstrates market validation and signals a positive growth trajectory. A simple way to think about MVT is: MVR plus multiple quarters of growth.
Once you’ve reached MVT: Congratulations! You have successfully traversed the Traction Gap. You are a member of a very small group of startups that survive this process. You are now ready for the go-to-scale phase.