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Navigating Your Current Stage Using Traction Model

In my previous writing we already know that building a big business dream needs certain stages throughout the journey ahead. The stages are going to help us in breaking down particular milestones we have to achieve. Building an IDR 1 trillion Company would be more measurable when we split the target into some smaller targets in a timeline.

To help you divide the stages needed for your business you can use the framework introduced by Ash Maurya in his book titled Running Lean. He divided the startup stages; into three important stages which are Problem Solution Fit stage, Product Market Fit stage and Scaling stage.

Each of those stages has their own criteria and target. Problem Solution Fit is a phase when the startup is still validating their idea. The founder has to do some researches by interviewing his target market to know what the important problem they have is. Do not start to produce our product or service when we still do not know whether the important problem is already solved or not. 

Many startups fail because they build a product or a service that has no market need. They have not solved any important problems for their target market yet. Do validate our assumption by interviewing enough and right on target respondents. Ash Maurya himself recommended interviewing thirty people in the Problem Solution Fit stage.

By the time we validate the customer’s problem we can step into Product Market Fit. The founder has to build their solution and test it to their prospective customers. The success criteria in this stage are rather hard. The solution can solve our customer’s problem, they want to buy our solution and they favor our solution.

Product Market Fit sometimes becomes the hardest stage for startup founders. It takes many iterations until they find the best formula to solve and to satisfy their customers. The founder also has to validate if your product/service is a worth buying thing. The most accurate way to validate that thing is by asking our customer to buy our product/service. When they give you their money to get your product you can congratulate yourself because your product is worth enough for your customer.

The last stage is the Scaling stage. In this phase we have to figure out the strategies and channels to spread our solution. This is the stage when we can expand our business. We will start our paid marketing to acquire our new customers. We can also expand our business to other places. Furthermore we can hire new people for our team.

One of the common mistakes startup founders make is doing premature scaling for their startup. We start to do aggressive paid marketing when our solution is still not validated yet. In addition, we hire a lot of people while our business model is still questionable. Premature scaling makes our expenses ineffective. We spend a lot of money when we are still not sure whether our customers already favor our solution or not. I myself already did some premature scaling in my previous startup. It costed us a lot while on the other side an early stage startup has to be very careful using their money.

After knowing the three stages, we could set a measurable target to each of the stages above. In his second book; Scaling Lean, Ash Maurya introduces that activity as a Traction model. Traction model is a tool to describe the desired output of our business model.

We assign a measurable metric to represent that one of the three stages has been passed. It would be easier when we work backward from the scaling stage and create a time boxed traction model to it.

Ilustrasi Traction model : setiap tahapan pengembangan startup dalam satuan waktu

By the time we already know the target with its time boxed in each stage, we can use our traction model as a guideline. It will be our long term picture. If we put a target that we want to reach product market fit in 24 months by acquiring 400 customers, then we have to establish certain short term strategies to achieve that.

Traction model is a simple illustration but it can help us to navigate whether our startup is moving with a good growth path or not.

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