One of the age-old conundrums in startups is that you need funding to get traction, but you need traction to get funding. How does one exactly break this cycle?
The answer lies in organizing your time and hustle strategically. In my work with founders, both new and old, I find myself repeating some of the same patterns since I often see founders focusing on low-yield traction efforts while ignoring high-yield opportunities.
This acronym M.A.R.T. can be a useful principle in organizing your time’s activities:
|The Ask||Examples / How?||Value / Why?|
|(M)oney||The highest. There is no substitute for revenue when trying to de-risk an investor.|
|(A)ccess||If you can’t get money, get to the people who can. This is true in both: |
|(R)eputation||People still buy on social proof, no matter how complex the solution is. Getting people on board is an evergreen asset that you can take from sale to sale. When getting started, they don’t need to “buy” to be a reviewer/reference.|
|(T)ime||Getting on people’s calendars is valuable, but too many founders mistake this for real traction.|
Use this shortcut to strategically order your asks, going down this list from most valuable to least valuable. Said simply:
- Ask for Money first. If they say no, ask for Access.
- If they say no to Access, ask for Reputation.
- If they say no to Reputation, ask for their Time.
- If they won’t give you Time, it’s over. Thank them and move on.
- If all they give you is Time, that’s even more dangerous. As a founder, time is your most precious commodity. Be aware and respectfully move on if needed.
As I have used this with multiple founders, there have been a few observations that I wanted to share:
- Most founders overengineer product, delaying the ask for Money. They don’t think their product is ready. There is always one more feature or one more UX change they want to build. Fight this urge. This usually is not due to the founder’s product, but rather a reflection of the founder’s psychological fear of rejection. Again, fight this. Challenge yourself to ask 10 people for revenue unapologetically, and see what happens.
- There is no reason you can’t pre-sell at a discount. If you know you have a product that can make someone’s life better, it is OK to offer a sweetheart deal to get the ball rolling. Try offers like, “We are offering our first 10 customers a significant discount of X” or “We are offering lifetime pricing of $1,000 for our first 10 customers.” Getting people to vote with their dollars is a major threshold and milestone.
Many founders get caught up that this will never scale (“We can’t do this forever. This is not sustainable.”) and they are exactly right, but those are tomorrow’s problems. Traction is today’s problem. If successful, then increase pricing.
- Ride the T.R.A.M. when in pre-product development — If you are developing your product, you can use this acronym in reverse to “level up” every iteration of your product development. It’s the same concept.
To illustrate, consider this hastily written short play between a founder and prospect.
- Act I / MVP 1 – (T)ime
Founder: Can I show you this prototype marketplace I am building? (Time question)
Prospect: Sure. Here’s my feedback.
F: Thanks for the feedback, can I come back to you when we address these?
- Act II / MVP 2 – (R)eputation to (M)oney
F: We took your feedback. What do you think?
P: Wow! I didn’t think you could knock all this out that fast. I think you are on to something.
F: Great, can I use your name and logo as a marketplace seller when we launch? (Reputation question)
F: Do you know of other buyers and sellers that would be interested in this? Could I meet them? (Access question)
P: Definitely. I can think of 5 people right now. I will set up time. Hey, what does this cost anyway?
F: Funny you should ask, we are offering early pricing for our first customers and marketplace referrers. Are you interested? (Money question)
Getting traction is hard — there is no doubt about that. But being strategic about how you organize your time can give you an advantage in taking your enterprise to the next level.