MILESTONE #5: Market Traction

MILESTONE #5: Market Traction

“I don’t know the key to success, but the key to failure is trying to please everybody.”
– Bill Cosby

Market Traction Capital Raising Milestone from The Startup Garage
Market traction comes in different forms for different companies; however, there are some proven ideas and tactics that can be helpful to understand this term.

The more you can prove your market traction, less risk is posed to potential investors and therefore the more value they put on the business. You can start by showing an existing competitor with a similar product that has proven traction, because this shows that there is an existing market.

Some challenges that entrepreneurs can also encounter is that they don’t necessarily have a completed product that can be tested or sold in the market or that their product/service is so unique that they are creating a new sector in the market. One way to overcome this hurdle could be through surveys with potential customers.


You have to know what consumers want if you want to gain real market traction.

By using surveys, you can gain insight into things like where there are gaps in the market, what pricing strategy would be acceptable, strengths/weaknesses of your competition, target demographics, and whether or not your brand is being recognized.


Beta testing is when you have real customers in real environments test your product or service before it is released to the general public. This approach can’t be replicated in a lab setting and it is done in order to gain insight into user reactions. Because it allows you to work out any kinks prior to launch, it can improve customer satisfaction, increase future sales and revenue, lower support costs, better product planning, and a more positive image. In Beta testing you can show whether potential customers are interested in the product you are offering.

What this doesn’t do is prove that they are willing to pay money for your product.

Selling your first product is a big deal because it shows investors that you can produce, market, and sell your product. Gaining more sales in key markets pushes you to the next level. At each level you lower the risk for investors, while adding value to your business.


Pre-sale crowdfunding campaigns are another great way to prove market traction. If you’re able to pre-sell a significant amount of your products investors will perk up their ears. This is also a golden opportunity for promoting your company using word-of-mouth and social media channels where consumers will do the marketing for you.

Some of the most popular crowdfunding sites:


If you are selling B2B then letters of intent could be captured. They are not binding, so these have very little value to investors, but they still are better than nothing. It shows you have the ear of major corporate purchasers.


When a startup approaches an investor with a contract in hand, normally they need the investor to provide capital so that they can fulfill a purchase order. This really stimulates an investor’s interest in the company because they can see that there is real demand for the product/service and an immediate ability for ROI.


Having competitors is inevitable for all businesses; however, it is important to evaluate where you rank amongst them and what you do differently so that you can develop strategies to beat them. If you want to be a leader in your marketplace, you have to know who the key players are so that you can figure out their strengths and weaknesses and eventually position yourself to stand out.

Share This

MILESTONE #5: Market Traction