It's an entrepreneur's greatest question. Acquiring customers is the lifeblood of any business, and the only way your company will grow.
In our research while writing Traction, we found that there are only 19 ways startups and businesses acquire customers. The good news? There are only 19 channels. The bad news? There are 19 whole channels!
Many successful startups experiment with multiple channels (search engine ads, PR, business development, etc.) until they find one that works. Follow their lead and figure out what works for your business.
We call these customer acquisition channels traction channels. These are marketing and distribution channels through which your startup can get traction: real users and customers.
Why Entrepreneurs Fail to Get Traction
During our research, we came across two broad themes:
Most founders only consider using traction channels they’re already familiar with or think they should be using because of their type of product or company. This means that far too many startups focus on the same channels (AdWords, content marketing) and ignore other promising ways to get traction.
It’s hard to predict the channel that will work best. You can make educated guesses, but until you start running tests, it’s difficult to tell which channel is the best one for you right now.
This is why we introduce something we're calling the Bullseye Framework. Essentially, it involves experimenting with a few channels, then doubling down on the channels that are working. Companies like Kayak, Mint, Moz, AppSumo, Evernote, and Reddit have all used this experimental approach to acquire millions of users and billions of dollars in revenue.
Though possibly smaller than Kayak (for now), your business has access to the exact same traction channels: it just differs in terms of scale.
Your strategy should always be focused on moving the needle for your company. By moving the needle, I mean focusing on marketing activities that result in a measurable, significant impact on your company. It should be something that advances your user acquisition goals in a meaningful way, not something that would be just a blip even if it worked.
For example, privacy-based search engine DuckDuckGo focused early on search engine optimization to get in front of users searching for “new search engine.” In the early days, these users really moved the needle and were the biggest source of growth. Eventually, DuckDuckGo’s userbase outstripped this volume by many times, and they had to find another traction channel that moved the needle.
How Companies Grow
Company growth happens in spurts. Initially, growth is usually slow. Then, it spikes as a useful traction channel is unlocked. Eventually it flattens out again as a channel gets saturated and becomes less effective. Then, you unlock another strategy and you get another spike.
In other words, the way you get traction will change. After your growth curve flattens, what worked before usually will not get you to the next level. On the flip side, traction channels that seemed like long shots before might be worth reconsidering during your next iteration of Bullseye (the framework we introduce that helps you find your best marketing channels).
You can think of your initial investment in traction as pouring water into a leaky bucket. In phase I, your bucket will be leaky because your product is not yet a full solution to customer needs and problems. In other words, your product is not as sticky as it could be and many customers will not want to engage with it yet. As a consequence, much of the money you are spending on traction will leak out of your bucket.
As you hone your product, you are effectively plugging leaks. Once you have crossed over to phase II, you have product-market fit and customers are sticking around. Now is time to scale up your traction efforts: your bucket is no longer leaky.
When you constantly test traction channels by sending through a steady stream of new users, you can tell how leaky your bucket is. You can also tell if it is getting less leaky over time, which it should be if your product development strategy is sound. In fact this is a great feedback loop between traction development and product development that you can use to make sure you’re on the right track.
Once you determine your traction milestone -- 10 users? 100? 10,000? -- look at each of the 19 channels, run tests in the 2-3 that seem most promising, and double down on the ones that work best. And, just like that, you're growing your business and getting traction!
Your Turn: What channels worked best for you in the early stages of your business? Let me know in the comments!
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