You often hear that “cash is king” and that’s true. But when you are building a start-up, traction is just as important. If cash is king then traction is queen. Traction proves your concept in the real world, and can come in the form of beta users, advance orders or early stage sales.
You can do all the “lab” style market research (focus groups, surveys etc.) you want, to the highest empirical standards, but it does not hold a candle to real world traction. Remember you are not doing a PhD thesis you are building a business.
Changes in technology and communications in the last ten years have changed the rules when it comes to presenting proof of concept to investors. Today, you must have at least beta users to get investment. Even better to have early stage customers using your product.
Other means of getting traction is positive reviews in trade blogs etc. You have a chance of getting these once word of mouth starts to spread with early adopters.
Another hugely important reason for doing “real world” market research is to get base assumptions for your sales funnel. In other words, achieve conversion rates that you can use to project into the future.
All in all, as a start-up entrepreneur, you should always keep focus on achieving traction as soon as possible.
