Building Traction: What Does Success Look Like?

At seed stage and beyond, VCs like to see some sort of traction before investing in a project, And it certainly helps loosen the purse strings and aids in justifying valuation, but where is the best place to focus your efforts and secure the funds required to drive your project to the next stage?

Should you focus on:

Social Media Following
Engagement
Waitlist sign ups
Testnet/MVP users
Partnerships

And practically, when we have decided on our North Star, how do we define what success looks like at the pre-seed or seed stage? Let's take the above list one by one and see if we can work out what's realistic, achievable and of the most benefit.

First thing's first: Find a benchmark

To give yourself a realistic picture of that success looks like, you need to look at the entire landscape of your niche. Zoom out and see what level of interest, traction and engagement there is overall.

For projects with a focus on, as examples, attracting developers or B2B SAAS, the pool is very small and successful traction there (as well as strategy and tactics) will look very different to a consumer focused DeFi product or a Layer1 looking to launch a token.

When we have an idea on the lay of the land we can then zoom in.

No use banging your head against a wall as a founding team of 3 trying to compete off the bat with a project that has massive funding, huge partners and an entire marketing department.

Ideally find similar projects in your niche and make a decision on what stage they are at in terms of funding, team size, a finished product and how long they have been active.

When doing this look beyond just the follower or subscriber counts, dig in using sites like socialblade.com to see when and how the numbers appeared (this will also allow you to compare yourself to projects further along the line when they were at your stage).

Focus heavily on the engagement and do this across the various channels they are using. This will also help you ascertain which channels will be the most effective for your own exposure strategy, think critically and don't simply take anything at face value or try to copy paste.

Get stuck in here, read the comments, check the profiles of the people engaging- Do the look legitimate? Check impression numbers and then make a decision on what these might translate to in terms of other goals such as waitlist sign ups, finding product testers, or indeed customers(B2B) or token buyers (B2C).

Look out for any paid exposure, is this something that is an option right now for your project? Do they have Tier-1 partners and VCs that give them a leg up, how many team members do they have? Once you have built this picture and noted down any observations and data, you can start to flesh out where you need to be and what is realistic within your own constraints.

Social Media Following

Highly engaged socials of a decent size are a great way to demonstrate initial traction.

NB: Do NOT resort to blowing up social followings through low-value tactics. This is a red flag for a savvy retail investor and for VCs as well.

We often have initial meetings with clients and are asked if we can get to a certain size in a particular timeframe. So when we are asked to get 10k on Twitter in 3 months, the answer is always the same.

"We can get you 10k followers by next week if you want, but what value will that add to your project?"

This holds true across all channels, there are very simple ways to check the legitimacy of a project's socials, and investors will be doing this.

In fact, when low-value tactics are used, often more effort goes into maintaining the facade than delivering actual growth.

So let's be real for a minute and forget about numbers and vanity metrics, let's talk about community. This is not an audience or a follower count, it's a group of like-minded people who are genuinely interested in what you are building.

Finding them is the real North Star and is a real demonstration of progress and traction.

For B2B, showing a number of interested parties through dialogue or if possible partnerships is a fantastic way to show traction. Even just a couple or that first one.

Chat channels & longer-form content

If you are B2C then the proof is in the pudding, you will see people engaging on socials and having some amount of conversation in the chat channels.

Don't expect lengthy debates and constant chatter on a daily basis, but when a meaningful update occurs people will pop their heads up and engage. Over the course of a few months you will start to find those first few 'superfans' (If you have been looking in the right places, leveraging, and producing quality content consistently).

In terms of metrics, what is a good target here without an exposure budget in 3 months?

If we are talking totally organic and no spending I think anything over 1000 followers on Twitter is really good, organic means you have found ONE THOUSAND PEOPLE who are genuinely interested in what you are building, that's an amazing achievement.

When it comes to the chat channels expect normally about 20-25% of these to join there organically. Only a portion of your community will be interested in engaging at a deeper level at this point. The same goes for the longer form content like articles and blogs.

Remember these are the people who:

Want to use your product
Will take part in your testnet
Will share and talk and stimulate organic growth
Give valuable feedback
And at the end of the day tokenized or B2C projects generate investment and revenue

So tell me again why having 10k on Twitter for a seed project with a tight budget is important, or even realistic and achievable? Unless of course, you happen to have a Layer 1 that has received a cheque for $50m from A16Z, or are fudging the numbers.

We don't need an army (yet), they will follow, we just need those first few committed supporters.

Engagement

In covering community versus vanity metrics above, hopefully, the point about engagement is clear. Communities generate impressions, engagement and organic growth, vanity metrics don't.

But we can give some colour here and look for what to shoot for. Impressions are key, without those you are toast. And based on how social media algorithms work, content that gets engagement gets more impressions. It's a flywheel.

In terms of driving more impressions, LEVERAGE, leverage your partners, team, advisors, mentors and investors. Be the PEOPLE in their portfolio whose project they want to share. And when it comes to the content, put yourself in your communities shoes and ask yourself.

"If I were them would I honestly give a shit about this if I saw it on my feed"

Aspire to make the content they will give a shit about.

In terms of the numbers in early-stage communities, weekly Twitter engagement for example generally ranges from 6% to 13% for the projects we work with (when major updates happen you can see large spikes as high as 20%). I've heard that one large and very active VC in the web3 space asks for these statistics and won't invest if it's less than 2%.

Wait-list Signups

Venture capitalists often prioritize this aspect, particularly in the B2B space, and it is common for entrepreneurs to mention two specific numbers when discussing their projects.

The first, 1000 and then 10,000.

Again much like the social media following this is more about the qualitative aspect. It's certainly one to focus attention on and use as a call to action in communications but I do wonder how much from the investor side goes into digging into where these sign-ups came from.

Let's focus on that first 1000, we are growing the community organically, maybe we get a few dollars to spend here and there. Some of that should be put towards incentives for cross-pollinating as many of the existing community as possible onto our waitlist. In the absence of budget things like community sale whitelists, airdrops or testnet spots can be used.

NB: This should be done for existing community members only, otherwise you will end up with a worthless waitlist of giveaway hunters.

In addition to this, we generally look at some cost-effective exposure such as AMAs or Twitter Spaces and build an incentive mechanism into that. A few hundred dollars can go a long way here when you find the right channels and people to match a project's niche.

When it comes to getting to 10k, again if we are focusing on quality, there will need to be a good amount of brand awareness built as well as some money spent on getting the right eyes on the product.

How fast can you get there? Depends a lot on the budget, team bandwidth, as well as where the project is in terms of existing brand awareness and traction. Let's assume they are at zero traction and don't have any real budget. Then getting to 1,000 sign ups in 4 months from there would be a really good achievement. With a budget of a few thousand lets say $3k, and existing content and awareness, it can be done much much faster,

Ya gotta spend money to make money eh?

Testnet/ MVP Users

We work with a project who brought us in as they needed a testnet filled in 3 weeks. The goal was 100 testnet users. This is a Layer 1 blockchain Newrl, which means the testnet users needed to pay AWS or something similar $60 a month to host the nodes.

In 3 weeks we had 300 nodes and after about 5 weeks we had 1080. This was more than Bitcoin Cash and about 10% of the number on Ethereum at the time.

This didn't happen just because we are amazing at our jobs (didn't hurt either to be fair). It happened because this is an incredible avenue to not only prove traction in its own right but also leverage the incentives of a testnet to achieve the other goals eg. Wait-list sign-ups and social media following.

Now you don't just have people who are interested at a conceptual level. You have community members with skin in the game who are in it for the long haul. The same goes for MVP testing, the rewards don't have to be today, or even specified. But people helping you out should be rewarded down the line as early supporters and leveraged to build the key metrics above.

Partnerships

Whether B2B or B2C, partnerships are a great way to leverage social proof and following. You can cross-pollinate not just communities but investors, advisors, other partners and even clients from those you snuggle up in bed with.

Think how the clogs turn in the minds of the potential investor and other key stakeholders.

"If the project is good enough for this partner.... we should look at them"

Projects often lean on partners a lot in messaging and on websites. We always try to ask ourselves in determining how meaningful a partnership is

"Which way is the money flowing here"

We can only assume that VCs much smarter than us are doing the same thing on the way to their 11 am Tuesday tee time.

When focusing on these as a key indicator of traction, especially in B2B, map out what your ideal customer looks like and then dig into which projects or companies can give you a route to these people.

Generally these, again, need to have a qualitative aspect when it comes to assessment and review. No use having someone run around doing 15 partnership deals a month that provide little or no real value when just one or two can help drive the project where it needs to be.

Wrap up

What other key metrics to demonstrate traction at a very early stage are you looking at? Do you have a finished product already, focused on driving revenue or is there something we missed completely? Let us know in the comments and show the article some love if you found it helpful.

If you're looking for advice or support on marketing in web3, at AltCoinEdge, we specialize in growing REAL communities with authentic community-building strategies.

We offer expertise in:

-Web3 marketing

-Content

-Strategy

-Social media

-Community management

-Growth

-PR

-Exposure channels

-Biz dev

Feel free to DM me Ian Byrne , or book a virtual coffee here:

https://calendly.com/ian-altcoin-edge/group-meet