Tip 74: Traction. In the last tip, we noted that “nothing proves traction better than revenue.” That leads to more generalized tip: highlight your “traction” early in your pitch.
No-one really knows what anyone else means by “traction,” and it can become a moving target (especially if the investor isn’t really that excited, a “lack of traction” can be a convenient excuse). In general we are looking for proof that people will buy this product. Revenue from existing customers who will provide strong endorsement is the ultimate proof. But whatever your traction is, you need to introduce it early in the pitch: if it’s exciting, use it to get the audience excited from the beginning.
Burying traction and near-term potential late in the pitch means failing to exploit a great opportunity. For example, I recently saw a pitch from a company with ~20 small customers from a local network of friendly individuals and their word of mouth, and so had moderately interesting proof that people liked the product and were seeking capital to expand its production capacity. Q&A started like this:
Questioner: “Why do you think there is demand that will allow you to sell all the extra product you will be able to produce?”
Presenter: “We currently pre-sell all of our product, and we have 80 companies on the waiting list.”
Questioner: “Wait, what? You have 80 customers who you haven’t been able to service yet and are waiting to buy?”
Audience: Wakes up.
Had that information been delivered upfront, we would have been much more interested in the rest of the pitch! Coming at the end, it had much less impact.
However you think you can prove traction, spell it out early.