The Main Reason Startups Struggle To Gain Traction

Read time: 3 minutes

Many of the new founders we supported found themselves feeling stuck, unable to gain traction in their startups.

Despite having validated their product and secured paying customers, they struggled with direction and focus.

In the early stages, it's tempting to tackle a long to-do list without considering the impact of each action.

But as the startup matures, it is key to prioritize tasks based on their potential impact. Otherwise, valuable time and resources may be wasted on low-impact activities.

Knowing the root cause is half the battle

Without a clear structure in place to guide them, founders often rely on their intuition to determine which areas of their startup need attention and how to address them.

While some may be fortunate enough to pinpoint and resolve the root cause, relying solely on intuition can be risky, especially for bootstrapped startups or those with high burn rates.

So when working with founders, our first step is to identify the most urgent bottleneck in their business. By unlocking this bottleneck and gaining traction, we pave the way to address subsequent challenges, following the essence of business growth.

Use the “Drop Offs” to identify the bottleneck(s)

Whether you're in B2B/B2C SaaS, Marketplace, Mobile App, etc., users go through multiple touchpoints before converting into paying customers.

By measuring the drop-off rate between each step, you can uncover the primary reasons for your startup's stagnation.

For instance, let's consider a B2B startup with 1,000 website visitors per month. From these visitors, 30 become leads, 15 proceed to a demo, and 5 ultimately convert into paying customers.

• Website Visitor to Lead → %97 drop-off rate

• Lead to Demo → 50% drop-off rate

• Demo to Customer → 67% drop-off rate

So without going into industry benchmarks and other semantics, the founder knows that if he/she reduces the “Website to Lead” drop-off rate by 2% to 95% he would get the following results:

• Website Visitors → 1,000

• Leads → 50 (+67%)

• Demos → 25 (+67%)

• Paying Customers → 8 (+60%)

A simple 2% improvement to the biggest bottleneck led to a whopping 60% in paying customers!

This shows the importance of not only addressing the right solution but also targeting the correct bottleneck to unlock traction and growth in your startup.

Conclusion

Early-stage founders face numerous challenges, but identifying and addressing bottlenecks in their startup journey stirs the ship in the right direction.

Knowing how to measure and use the "Drop Offs" method allows you to pinpoint areas where your startup is stagnating and take targeted action to improve conversion rates.

Take the time to analyze your user journey, identify the most critical drop-off points, and implement strategies to mitigate them.

By focusing on the right bottlenecks, you can unlock substantial growth opportunities and set your startup for continuous success.

If you found these tips valuable, email us or drop a comment below to let us know. Your feedback helps us continue supporting startups like yours.

If you are ready to take your startup to the next level, this is how we can help 🏆️ 

• Hands-on Collaboration: If you are a startup founder who has initial traction and would benefit from a highly customized approach to help accelerate your startup’s revenue growth.