PUBLISHED BY M.R. Rangaswami
SOURCE Sand Hill
March 14, 2019
Founding partner at Wildcat Venture Partners, Bruce Cleveland understands the genetics of startups – why most flop, and why a few make it across the threshold from product and concept to traction and lasting success.
In his new book, Traversing the Traction Gap, Bruce explains the tools, roadmap and skills entrepreneurs and startups require to traverse the gap and enter into mainstream success.
M.R. Rangaswami: What are a few key components to successfully making the journey between concept and tractioSann?
Bruce Cleveland: The first thing to do is to objectively consider whether you are truly prepared to begin the journey — are you and the team really ready to traverse the “Traction Gap”?
To be ready, you should have completed all market engineering and product engineering tasks. Your market engineering tasks include category creation/definition, statistically valid market research to confirm there is a legitimate and sizeable market, initial messaging matrix and value propositions, initial pricing and your talk tracks – thought leadership, sales leadership and investor. Your product engineering tasks include a comprehensive beta program, NPS scores that indicate market/product fit, daily or weekly usage rates that exceed target expectations, and customer/user testimonials that indicate they are satisfied with the product.
These product engineering and market engineering tasks should be largely complete at Initial Product Release (IPR). This is the official kick-off point of the Traction Gap. The tasks must be entirely complete before declaring Minimum Viable Product (MVP), which is when the first real market engagement begins for most startups.
As you move out of the go-to-product phase and into the go-to-market phase (the Traction Gap), the emphasis must quickly switch from an intense focus on product issues to market issues. That is, creating awareness and interest, and converting that interest into a set of repeatable processes that cost-effectively and reliably drive engagement, downloads, usage and ultimately revenue.
The team needs to realize that if it wants to be in the upper quartile of startups, it only has about two-and-a-half years in total to go from MVP to Minimum Viable Repeatability (MVR) to Minimum Viable Traction (MVT). If it’s a SaaS company, MVT is about $6 million ARR (Annual Recurring Revenue). If it’s a B2C software company, MVT is about 1 million active users.
Read the full interview on Sand Hill.