How do you define “initial traction” for a SaaS startup?

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JASON LEMKIN

I’ve defined “Initial Traction” as somewhere between $1m and $1.5m in ARR in most cases for one simple reason — it’s at that point the the business, while still tiny, becomes self-replicating.

At some point, you have just enough customers, you’ve figured out how to get just enough new leads and new prospects, that quantitatively, the business is “repeating”.

It may not feel like it on the inside. But on the outside, your growth is somewhat assured mathematically within some range (e.g., from 40%-70% this year).

That’s Initial Traction.

It doesn’t feel all that different. But it’s the time when you need to begin to scale up your team as much as you can afford to do. And the time when you usually are ready to bring in your first true management team members.

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Published on May 5, 2017
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