What is the best way to describe “traction” in your pitch deck?


A typical pitch deck is used for raising funds for your startup.

A good pitch deck tells a compelling story that follows a logical sequence and shows strong business model validation from experiments and research data.

Why is describing “traction” important?

Traction makes a startup fundable.

Most investors care most about actual traction in a seemingly large market. Traction is a measure of your product’s engagement with its market, a.k.a. product/market fit.

In order of importance, it is demonstrated through profit, revenue, customers, pilot customers, non-paying users, and verified hypotheses about customer problems. And their rates of change.

A story without traction is a work of fiction.

Investors want to invest in startups that will be successful with or without them. And those who succeed don’t wait for investors before they begin to create. They can’t wait to carry their idea forward.

What are the challenges?

Your idea is no more than a bunch of assumptions or hunches about most of the business model, to begin with. Your discovery on getting a sense for theories against reality is what will demonstrate. the amount of customer adoption.

The key is, therefore, to get a sense of customer adoption for your idea when you do not have a product yet.

Incidentally, even when you have a product that investors can see, use, or touch, this may not be enough. They will want to know that there is product market fit and that the product is experiencing actual growth.

What are the solutions?

What does this mean for your fundraising plans? Traction gets you a greater interest from investors, shorter cycles, and better terms.

Your idea’s or product’s market engagement is the key to get investors interest.

In most of the cases, you don’t need much money till you get some traction. Try and get some traction before you start fundraising process.

MVP experiments or small and make smart micro-experiments to test your assumptions will get you to show your idea’s engagement with the market. Other option, when you do not have an MVP, is to go for customer discovery interviews that would uncover if your idea is really matching a pain point for some customers.

How do you present it?

“If you got it, flaunt it”, would be the best way to talk about the traction slide on your overview. In fact, show it early, often since in the absence of other stronger parts of your business, traction trumps theory.

There are many ways an entrepreneur can prove traction to an investor.

Progressively, % growth is the easiest to show if you have small numbers or have numbers other than revenue. The next best is to show the revenue curve (up and to the right hopefully) followed by revenue with some key snapshot metrics.

The thing you are trying to do with the traction slide is to prove that you have validation in the market. Hence, showing traction in the short term with users, or longer term in terms of growth is a good start, but traction with revenue and key metrics is the best place to be.

If your model shows # of advertising revenue spend on your site (for e.g. media property, blog, etc.) then, ad spend on your site with key metrics about user engagement, etc. make sense. For most SaaS businesses, though, showing revenue over a decent period of time (1 year preferably) or at least since the time you started getting revenue along with growth rates helps.

Absolute revenue graphs are good as well, but it’s better to show % growth and keep the numbers private to be shared during your operating plan discussion. You don’t want to give any of your competitors or investors in your competitors, any knowledge of the strength of your business.

Sometimes when your business is fairly recent, and your product depends on user growth initially, not revenue, you could use either the monthly signup graph or bar chart. Above all, focus on your traction slide headline, once you decide which metric to show. The title of your slideshow tells the user about an exciting development in your business from a traction standpoint.

So, instead of using words like traction, revenue, signups etc., it would work better if you say:

  • 40% growth in user MoM, for 8 months
  • 212% growth in revenue YoY, at $500K
  • $150K revenue, 97% Margins, 40% growth in users MoM

That way, investors got the key takeaway that you were trying to convey.

Take away from this

There can be no doubt that the more traction you are able to demonstrate, the more credible you appear. An entrepreneur who pitches an investor without any traction, is likely to be told come back when they have some.

Ultimately, the message is clear. Traction is extremely important to investors so it needs to be important to you. If you want to raise capital, don’t just tell an investor you have a ‘great idea’, tell them you have traction.


What is the best way to describe a “Problem Statement” in your pitch deck?


Pitching isn’t only for raising money—it’s for reaching an agreement, and agreement can yield many good outcomes including sales, partnerships, and new hires.

A great pitch has two goals: establishing that the opportunity is big and showing that you can pull it off.

A good pitch deck tells a compelling story that follows a logical sequence and shows strong business model validation from experiments and research data.

Why is describing “problem” important?

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting. One of these 10 slides is one slide about pain point.

This is probably one of the most important slides in your deck. The reason why Dave McClure advocates, “pitch the problem, not the solution,” is because too many entrepreneurs try too hard to sell their solutions without educating their potential investors on what the problem is.

In this slide, you will need to address the following questions as simple and concise as you can be:

What is the problem?

How do you know if it’s a problem?

Who are you solving this problem for?

How are they trying to solve the pain currently?

You need to understand the way your company solves the problem – by focusing on the emerging of the problem through identification of the reasons behind its emerging or by focusing on the existing inadequate solutions to the problem.

What are the challenges?

The problem, however, comes with the presentation of the Problem-Solution equation. One of the biggest mistakes that entrepreneurs make in regards to this topic comes from the fact that they tend to focus on the solution before they explain the problem. This is a critical mistake and can ruin your pitch.

Explaining a solution to a problem that is not clearly identified and not completely understood by the investors and the audience makes absolutely no sense. Even if you have the most effective solution, nobody will understand the need of it, if the problem that it solves is not explicitly defined.

If the investors don’t understand the problem, its scale and the group of potential customers that face this problem, they will not understand why solving this problem is that important and why anyone will pay for it.

 What goes in “pain point” slide?

Think of a problem statement as a proof marking.

Try a story about a person who has a specific example of the problem. Be concise but not bland.

One of the key things to talk about in your problem statement….is why the issue is a problem in the first place? For the person reading it to completely understand why the solution is necessary.

Lead with the need

In order to grab the attention of your audience from the outset, immediately identify the business need you are trying to address.

Talk about the problem & current solutions – What need do you fill? For whom? What are the other solutions? Who else is already doing this, and how are they going about it and what are they not getting right or doing wrong?

The message that you want to give to your investors is that you have not only identified a real “pain” that is worth solving but also are passionate about it and that you have got a lot of insights about it through your conversations with the prospects.

The 3 Things This Week : 22nd February, 2018


Happy Thursday!

How are you doing this week?

Here are this week’s 3 things!

This week’s theme is blockchain technology. There are lots of development happening in this area in past few days. These 3 things on the subject would not possibly give some clarity on the situation with regard to trading. But the focus is on what to expect from this new technology when it comes to startups and new opportunities.

Thing # 1:  The Blockchain and Us


The Wright brothers invented the airplane in 1903. When they flew it for the first time nobody could have predicted that one day there would be over 500,000 people traveling by air at any given moment in time. In 2008, Satoshi Nakamoto invented bitcoin and the blockchain. His invention made it possible to send money around the globe without the intervention of banks, governments, or any other intermediaries.

Much like the Wright brothers, Satochi solved a problem that had been previously deemed unsolvable. Whenever this happens what usually follows is a lot of inspiration and innovation as minds are opened to see the future from a totally different perspective.

How long will it take before this becomes the norm and before many of the tasks that were previously handled by individuals and institutions become fully automated? Some experts suggest that it could all happen within a decade or two. Watch this now.

Thing # 2:  Beyond the Bitcoin Bubble


Steven Johnson has penned a long and wonderful piece in New York Times Magazine, in the recent days, exploring what lies beyond the speculative market in crypto tokens.

One interesting perspective explained here is about the blockchain as the architectural breakthrough that we need to move beyond the current Internet market dominated by a few large tech companies.  After all, it was not just the antitrust division of the Department of  Justice that challenged Microsoft’s monopoly power in the 1990s; it was also the emergence of new software and hardware — the web, open-source software, and Apple products — that helped undermine Microsoft’s dominant position.  The blockchain evangelists behind platforms like Ethereum believe that a comparable array of advances in software, cryptography, and distributed systems has the ability to tackle today’s digital problems: the corrosive incentives of online advertising; the quasi-monopolies of Facebook, Google, and Amazon.  Read this long article to get the sense of this perspective and how it will change the game for the new businesses and startups who use digital marketing channels.

Thing # 3Is Crypto the Future of Early Stage Funding?


A lot of people in the crypto sector have suggested that ICOs and tokens are the future of early-stage investing and highly disruptive to venture capital.

Watch this video from the Upfront Conference 2018, where VCs and other investors discuss why that may not be the case. And also, find out how things would really pan out in this direction.


I  would love to hear your feedback on 3 Things This Week.

Hope you enjoy, and thanks again for the privilege of emailing you!

Wishing you lots of happy reading,





P.S. –


1. The 3 Things This Week” is a free, short, curated list of useful articles, tools and other resources for building startup businesses. These 3 things would deal, in a random way, with different aspects of startup building – validation, traction, growth, funding, team, founders.

2. If you think of anyone who might enjoy this email, you can share this with a friend or co-worker.


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