Does traction trump revenue (in the short-term)?

Naval Ravikant‘s definition of traction is: ‘Quantitative evidence of market demand.’

Traction,  in my view, is not just about users. It is about users using your product at the price-point that you eventually want them to buy at. Everything else is about users taking advantage of an ‘offer’ with no guarantees that ‘usage during offer’ will translate into ‘traction’.


But the answer to the question above is that it depends on a variety of factors.

If you are in a business where there is precedence of the revenue model, business model, price-points, etc. working well for others, then there will be less tolerance to, you not having adequate revenues with whatever traction you have.

However, if you are in a category where getting to a reasonable scale to use that as a competitive advantage, then focusing on tactics to get traction, even if that means at the cost of revenues, could be acceptable to some.

Author: Prajakt Raut

Prajakt Raut is the founder of, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

One thought on “Does traction trump revenue (in the short-term)?”

  1. Agree and tempted to add that probably “innovation in the product”or “pricing differentials” might also go a long way to determine the traction-revenue see-saw balance may be……in that if innovation exists, then a low revenue and a low traction might still get you in the door to have potential stakeholders interested I guess and obviously the price parity will also play a huge part in the gamble……is it not?

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