Traction: what to show when you’re still an early stage startup

Startups are 70% execution, 15% sweat, 10% luck and 5% the idea. As such, traction is one of the most important aspects of a pitch. It shows everyone that your company is more than a nice Power Point and that you actually can deliver what you plan. It’s a mandatory piece.

 

Ideally, use real results!

 

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Source: AgendaPet‘s Pitch Jan’14

Perfect scenario: use top line (revenue) evolution. A growing graphic, doubling revenues every couple months, is all you could dream of. It shows your business has potential and is in a good momentum. More than the actual amount, investors are concerned with the growth pace. I don’t remember who said it, but: “growth solves everything if you’re a startup”.

If revenue evolution doesn’t make sense for your company, you can replace it by your must crucial variable, such as customer base, visitors, sessions, quotes, calls…

Word of caution: if the base is too low, do not try to trick your audience; even though going from USD 10 to USD 20 is a 100% growth, it’s still only 10 bucks… just don’t do it!

 

If you’re not there yet, focus on conversions!

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Source: AgendaPet‘s Pitch Jan’14

If you don’t have growing results to show yet, you should focus on conversions. Conversions tell how good is your execution and give a good sense of potential results. If you’re still in the test phase, or don’t have a history yet, using the conversion you’re achieving will do the trick.

I also recommend showing the conversion differences form paid/ organic acquisition channels, so your audience can analyze how healthy is your go to market strategy.

If churn and/ or repeat rate is important for your business, I suggest you to include that as well, so the audience has a complete vision of customer acquisition and maintenance flow.

All in all, when you focus on conversions, you’ll be providing the audience the means to calculate the lifetime value of your customers.

 

If you don’t even have conversions to show… go with milestones!

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Source: AgendaPet‘s Pitch Aug’14

Every time I give a pitch workshop I get approached by an early stage entrepreneur, super worried because he/ she doesn’t have real results to show yet. Well, I won’t lie to you… it’s not ideal, but there’s a way out.

You need to show evolution; how better off you are today compared to 4 weeks ago. People need to see that “you’re on fire”; that your company is evolving steady and fast.

In some cases, specially B2B businesses, it may be the close of a big contract; being granted a patent, getting a much needed approval from an agency, closing a partnership, reaching a development milestone, are other options.

One rule here, though, is not to show what I call “almost results”; for example, you’re almost closing a contract, but haven’t yet. Another: you’re almost done with development… Think about it: you have no results to show and what you show is not 100%. It sounds bad; too bad! So, go only with the 100% done milestones.

Also, I recommend showing the milestones from the near future, so people understand the importance of current achievements and what’s next.

 

Showing traction separates the “talkers from doers” and is the perfect closure for a pitch, even if you’re early down the road. Be smart, be concrete and, most importantly, don’t BS! Result should speak for itself!

 

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