TT_difference_iconHow is TractionTank Different?

 

Why is it so difficult to pick great startups out of the crowd?

The truth is that picking the startups that will succeed is difficult even for the most qualified groups, including accelerators, angel investors, crowdfunders and venture capital firms. Why?

Why?

Most investors rely on the same old methods of picking startups: They poll their constituency, ask everybody who they like and admit those founders. At root, it is still a popularity contest.

TractionTank is different.

TractionTank allows any startup that passes some basic filters to join the accelerator, receive the benefits of traction training and marketing cash, and to work towards market traction. We put market traction up front and through a multi-step process of training, testing and resourcing, we give the best startups the tools they need to gain access to investors and funding. We’ve done away with the popularity contest. Rather than picking companies, we let companies prove their concept and earn funding.

Why did we start TractionTank?

All too often, companies with a good idea are admitted to accelerators, but don’t end up being able to raise money or build out their company. They fail, and all of the passion, time, effort, money and resources put into the startup are ultimately lost.

How could this be? All of the startups have been selected as the best from hundreds of applicants. They’ve received seed investment, coaching, mentoring, tools, resources, and free services. But they still fail. Why? What makes the difference?

We believe that in most cases the difference between the winners and the losers is the presence of real market traction and true product-market fit for the startup’s offering.

These startups fail, despite all the resources provided by the accelerator, because they did not sufficiently validate their idea and did not generate market interest prior before exhausting their resources. And the successful startups are those that achieve true product-market fit and market traction first, before fundraising.

TractionTank’s goal is to fix that problem by providing startups with the tools and resources, including marketing cash, to test and develop ideas and prove product-market fit prior to investment. We want to help startup founders keep their passion and their money, by helping them find the right business for their efforts.

Read more about TractionTank’s background and founders

TT_Overview_iconProgram Overview

 

TractionTank is an online venture accelerator designed to identify and accelerate early-stage startups. Our focus is on helping startups to gain market traction and earn the benefits of our program while taking practical, provable steps along the path to funding and growth.

TractionTank’s goal is to become the world’s best predictor of acceleration and investment success for new technology startups. Our investment motto is “Resource allocation by market response.”

We accomplish this through an easy admission process followed by an intensive 12-week multi-stage development process in which startups are first tested for product-market fit and then accelerated based on their proven TractionScore™, which is a critical component of their TractionProfile™ on the TractionTank Leaderboard.

All startups first submit an application, including collecting information on how the company intends to market test their product. Once selected for the accelerator, startups begin the testing phase and are provided online training, online marketing tools, and marketing cash to test and prove their product or service. They are also provided ongoing coaching and advising through weekly group discussion sessions, online forums and new video lessons.

During this process, TractionTank directly monitors the startup’s progress and makes a weekly calculation of the startup’s TractionScore™ and makes a determination as to whether a startup may continue with the program. Startups may be released at any time, based on participation and performance. Startups that do not achieve market traction during the program, as determined by TractionTank, are released and the startup’s equity is returned.

TractionTank watches closely for indications that product-market fit is emerging, that the company is closely adhering to the TractionTank process and advisory as laid out in the training materials, and for indications of real market traction.

Startups that are successful in gaining traction are provided with additional marketing cash and additional weekly one-on-one and group coaching sessions, as well as other benefits of the accelerator. Startups with high traction scores are introduced directly to investors and partners, become eligible for special partnership deals, become eligible to participate in TractionTank events, and may be assigned industry mentors.

Most importantly, startups in the program are provided with a published TractionProfile™ and TractionScore™ that allow the startup to publically share their story and their objectively measured market traction.

Startups that successfully graduate from the program achieve Alumni status and may continue to publicize their TractionProfile and TractionScore indefinitely, and may be provided with ongoing access to accelerator benefits on a case-by-case basis, as they continue to grow.

TT_components_iconProgram Components

 

TractionTank’s accelerator program includes numerous components and resources designed to help launch startups:

  • TractionScore™ – The TractionScore™ is an objective measure of a startup’s actual market traction and is a major benefit of the TractionTank program. Each startup’s score is updated weekly and is a tool to help startups communicate their success to investors. Read more here.
  • TractionProfile™ – The TractionProfile is a participating startup’s investor-friendly profile in the TractionTank Leaderboard and showcases the startup’s product or service, founding story and TractionScore™. Read more here.
  • TractionTank Leaderboard – The TractionTank Leaderboard is where outside investors and partners can watch the development and competitiveness of your startup. As you company gains market traction, it will advance on the Leaderboard and gain investor interest. Read more here.
  • Traction Training – A major benefit of the program is having access to our suite of product-market fit and product testing training materials. Updated weekly and designed by an international expert and entrepreneurial leader in traction testing, the training provided through the accelerator program is an invaluable resource for building highly successful lean startups quickly.
  • Marketing Dashboard – The Marketing Dashboard is where startups get access to market testing resources, like the ability to build product landing pages and to place Facebook Ads, Google AdWords ads, Twitter ads, LinkedIn ads, and other outbound marketing tools. Cash is provided directly in the dashboard for the startup to spend and is increased as the company finds tests that work.
  • Traction Testing Process – The structured process, whereby startups develop tests and goals, put those tests into the market, review the results and then pivot to improved products and tests, is one of the most powerful tools available to create startups that grow quickly and are investor-ready. Read more here.
  • Group Coaching and Accountability – Through weekly interactive webinars, participants in the accelerator will review their tests, goals and results, discuss new tests, discussion traction and growth outcomes, and help to hold themselves and their peers accountable. Used by TractionTank’s founders in numerous prior accelerators and ventures, the group coaching and accountability process is a powerful tool in the growth of both entrepreneurs and their startups.
  • One-on-One Coaching – For startups gaining market traction and entering into a growth phase, one-on-one coaching is provided to help keep the startup on track, to provide additional in-depth guidance and support, and to introduce additional specialized advice, tools, techniques and partners to the startup.
  • Private Forums – The private online forums provided as a part of the TractionTank accelerator program provide a supplement to the training materials, testing process and coaching to give participants an opportunity to explore topics and tools in-depth with the help of both TractionTank and their peers.
  • Events – Our quarterly events, held in major investment and startup centers on both coasts of the US, give top-performing startups an opportunity to get more intensive coaching and mentoring, to present to groups of investors and to have one-on-one meetings with local industry leaders and investment firms.
  • Private Investor Network – Our private investor network includes both angel investors and venture capital firms that we have known for many years and who are explicitly interested in TractionTank accelerator graduates.
  • Investment and Term Sheet Coaching – TractionTank sticks with accelerator participants through the funding process and this includes helping them to understand investment term sheets, convertible notes and other issues related to capital formation. We want all of our companies to succeed!

TT_process_icon

Acceleration Process

 

Stage 1: Applying & Gaining Admission

Any startup can apply to the TractionTank accelerator through our website. Startups are asked to provide information on their company and products or services, to provide basic due diligence documents on the company and background on the founders. In addition, startups are asked to read an article and propose a traction test for their startup that would provide tangible proof of market interest and that demonstrates their understanding of product-market fit. Startups are admitted to the accelerator based on this application and admissions are made on a monthly basis.

Stage 2: Traction Test Design

The startup’s first activity in the accelerator is to review the online lessons, articles, videos, forum postings and HOW-TOs on creating traction tests and to define a test that would create an objective, measurable outcome that demonstrates the startup’s viability. This test is submitted, reviewed with our experts and additionally refined.

Stage 3: Traction Testing

Once a test has been accepted for testing, startups are provided with additional instruction, advanced webinars and tools, weekly coaching, and an online marketing platform loaded with marketing cash to run a traction test.

The results of this test allow the company to refine its approach, revise the test and pivot their market offering.

The goal of this stage is to acquire non-cash commitments from potential customers. These commitments could be email newsletter signups, social media follows, site visits, free demos, or returned phone calls.

The results of traction tests run by startups in this stage also drive the public TractionTank Leaderboard™ which tracks and promotes the top performing startups. These startups are also provided with a TractionTank Score™, which provides the company with an objective measure of market viability as compared to peer companies and creates powerful credibility for successful startups.

The tests are actively monitored by accelerator managers and startups completing a successful test and demonstrating market traction move on to the next stage of acceleration.

Stage 4: Sell a Pilot

In Stage 4, the teams focus on selling a pilot. The goal of this stage is for the startup to sell something for cash. For B2B startups, that means they must have one customer paying to help develop the product. For B2C startups, this usually means having a small group of engaged, paying subscribers or users, perhaps 10 to 20.

In this stage, startups that demonstrate good product-market fit, in which a predictable amount of marketing spend generates a predictable amount of customer interest, are introduced to additional resources to aid in the development of their marketing pitch, including access to explainer video producers, PR experts and other partner services.

Stage 5: Acceleration

In Stage 5, the teams focus on refining their product or service based on what they learned in Stage 2 and looking for new customers for the product that do not require customization the way earlier might have. In this stage, companies are looking towards growth, optimization, automation, and acceleration. Developing an excellent business and financial model for the company becomes crucial at this stage. The startups are provided with additional resources, intensive coaching on their business model, and tools and strategies to aid in continued growth.

Stage 6: Fundraising

Startups that are able to develop and prove real market interest are put on a fast-track for fundraising. This includes ongoing weekly coaching, active promotion, free publicity, access to private quarterly TractionTank investor network meetings and pitching events, and free business partner services.

TT_profile_iconThe TractionProfile™

 

Your TractionProfile is your spot on the TractionTank Leaderboard that profiles your startup and provides a live scorecard and comparison of your startup’s traction performance. It includes your live TractionScore and helps you to describe, explain and promote your growing startup to potential investors. The TractionProfile, TractionScore and Leaderboard ranking are the startup’s most important tools when seeking investment.

TT_score_icon

 The TractionScore™

 

The TractionScore™ is a proprietary formula that objectively scores and communicates a startup company’s actual market traction as a single score that can be reliably compared to the scores of all other startups to determine which company, objectively, has greater market traction. Only traction that can be monitored through the tools provided by TractionTank are used in this calculation. TractionScore uses a proprietary formula and a range of indicators to measure a startups market traction and publishes the score on the startup’s TractionProfile:

 

  • How many potential customers have you spoken to?
  • How many potential customers have you tried to sell to?
  • How many potential customers have paid you?
  • How many customers have paid you more than once?
  • How many people are on your email list?
  • How many potential customers have requested a pilot or beta?
  • How customers have paid for a pilot or beta?
  • How many fans do you have on Facebook? Twitter? LinkedIn?
  • Rank your sales channel in order of volume of leads/quality of leads/conversion rate of leads/total revenue from leads
  • Have you changed from your initial product idea in response to customer feedback?
  • Do you use experiential prototyping/MVPs?
  • What percentage of your team is devoted to product development? What percentage is devoted to business development? (Should add up to 100%)
  • Have you done any crowdfunding? How much did you raise?
  • Have you done any traditional fundraising? How much did you raise?


The TractionTank Leaderboard™

 

The TractionTank Leaderboard is a public ranking of startups based on their objective, third-party TractionScore. The Leaderboard is updated weekly and in addition to providing a public promotion of the startup, is also used to determine eligibility for TractionTank premium events, like one-on-one coaching, investor introductions and investor meetups.

TT_admission_iconRequirements

 

To be eligible for admission to the TractionTank accelerator program, startups must meet certain basic requirements:

  • Be incorporated, authorized to issue common stock and have all incorporation paperwork available.
  • Have legal company leadership in place who can make a personal commitment to participate in the accelerator.
  • Have an avowed commitment to the TractionTank market traction testing process.
  • Have a company with a business model that allows for rapid growth. (Pharmaceutical development companies, for example, would not be suitable candidates for the accelerator due to the long time periods required for clinical trials and the large amount of capital required over numerous rounds.)
Things that are NOT required to participate:
  • You do not need a full business plan or evidence of market interest.
  • You do not need a working product or demo ready for sales.
  • You do not need to be located in a major city or to relocate to a different city to participate.
  • You do not need existing investment or revenues.
  • You do not need experience with a prior startup.
  • You do not need a traditional “accelerator-friendly” web or software startup. We consider all applications.

TT_costs_icon

Terms

 

SPECIAL NOTICE: During our Open Beta Test period, startups can participate in the first 6 weeks of the TractionTank program WITHOUT agreeing to these terms! Check out the announcement here.
TractionTank operates as a private seed fund and accepts equity from startups in exchange for participation in the acceleration program:
  • Equity Participation – TractionTank receives 2% of a company’s fully diluted founder’s stock upon acceptance into the program.
  • Simple process – Startups agree to all terms and provide all disclosures at the time of admission through the online application and agreement process; No lengthy legal negotiation or paperwork processes.
  • Anti-dilution – TractionTank equity is subject to ratcheting anti-dilution prior to closure of a Series A round.
  • Series A Round – The Series A investment round is defined as $500,000 or more of fully-priced third-party equity investment into the company.
  • Buy-out Option – TractionTank equity can be easily bought out! We want to make your startup life and your fundraising easy. TractionTank’s equity participation can be bought out at 2X the share price of a qualified Series A round, at the time of the round.
  • Options – TractionTank has an option to place a convertible note worth up to $25,000 with the startup, with a 25% conversion discount, prior to or at the time of a Series A round.
  • Alignment – TractionTank is always aligned with the company’s founders and benefits only when the founders of the company benefit.
Prefer to pay your own way rather than sharing equity in your startup? No problem. Check out our Services.

TT_faq_iconFrequently Asked Questions

 

When do I get my TractionScore?

Startups receive the TractionScore after admission to the program, and usually after an initial testing period. We want to be sure that a company has implemented the basic requirements of a traction test prior to assigning a starting score.

When do I get my TractionProfile?

A TractionProfile is created at the time that a company is accepted into the acceleration program. The startup is responsible for creating and maintaining its profile through the forms provided on the TractionTank program website. TractionTank must moderate and approve all profiles prior to publication.

What happens if my startup doesn't get traction during the Testing Phase?

Startups that fail to achieve traction during the acceleration program may be released from the program at TractionTank’s sole discretion. Once release, the startup is under no further obligation to participate or share equity with the accelerator.

Why doesn't TractionTank make a direct cash investment?

TractionTank invests cash directly into each accepted startup’s marketing budget without any upfront cost or equity from the startup during the Testing Phase and more during the Growth Phase. Based on our experience, achieving product-market fit and traction is the most critical fundraising activity for an early-stage startup: With market traction, raising venture funding is much easier! And we have seen plenty of companies with cash in the bank, but no product-market fit or traction, which results in both startup failure and loss of the investment capital.

How does TractionTank make money?

The accelerator makes money either when a startup is acquired or when we are bought out by a later investor.

Who are the investors behind TractionTank?

TractionTank’s investors include the founders and other private angel investors and venture capitalists who frequently invest in early-stage tech startups. All investors are highly committed to the TractionTank process, or they wouldn’t be putting money into it!

How does a startup graduate from the program?

Startups graduate from the program after 12-weeks and after having completed both the Testing Phase and the Traction Phase of the accelerator.

Get Started...

Applying is a straightforward online process that only requires submission of your startup profile and some basic documentation. Get started growing your company now!

Apply Now!

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