Lack of capital or not having enough traction, which is a greater problem for your startup or business? I believe you can get traction with lack of funding....where there is a will there is a way, and if you are getting no traction then you might need to rethink your idea/product. Would you consider traction a top 3 problem for startups? @gesco
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closed as not constructive by Zuly Gonzalez♦ Feb 12 at 3:42
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If you're a first-time entrepreneur and have no traction, it will be hard to raise money. Not impossible, just hard. If you have traction, you also have options. Maybe you're starting to get enough revenue that raising a lot of money isn't necessary. (e.g. Maybe raise nothing or a smaller angel round). Or if you do need to raise money, real paying customers is more convincing than almost anything else you could have. |
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From experience, having some traction in the market will make it a lot easier to get cash. If you can prove that your service works and you have customers interested and purchasing it, and a plan for the cash, then it is much easier to get cash without having to give up to much of your entire company for it. |
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Top 3 problem yes, but NOT the biggest one, that's CASH. Traction will carry you only so far without cash IMHO, and by the time you need cash it is usually too late to raise it- fund-raising is a very time-consuming process. I had a serial entrepreneur joke to me years ago that a good CEO needed to do only two things: plan how to raise the money, and raise the money. |
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In my opinion nothing is more valuable than traction. Traction often means income. When/if it doesn't that user base still has a lot of value for at least raising capital. Twitter/Youtube/Facebook, amazing traction, minimal revenue, but all had great potential to raise capital (or sell). No amount of money can guarantee traction and though no amount of traction can guarantee capital it's a much better place to start. |
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In early stages, it's lack of traction. Like Jason said, get a MVP out there quickly and start the iterative process. In later stages, lack of funding can hinder growth or eventually lead to a complete shutdown. Since I'm a proponent of Lean startups, I'm going to get some type of MVP out there quickly while doing a bit of customer development to validate my hypothesis of my idea/product. Funding is usually not a barrier at this point. Once the product/service is released to customers, I'm definitely going to put more emphasis on profitability, but doing in a Lean way. |
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I agree that it's traction. There are plenty (perhaps too many) VCs and not enough great ideas. For most web based businesses you should be able to create a "minimum viable product" with very little capital. If you get enough traction investors will find you! |
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I'd say lack of traction (for the types of projects I work on). For a technical, consumer facing startup, where the main investment is time, the users (traction) are what bring the funding and/or revenue. |
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Lack of funding is a crippling problem for any business (or any person!) and so that's the most important concern to take care of first. You may choose to take care of it by personally funding the initial operations or by some other means, but remember that "Happiness is net positive cash flow, all else will come later." |
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