I think what you're asking is how do you know when you've reached true product market fit. There is a ton of literature out there on this and if you search for "product market fit" you'll probably have more than enough information to apply to your own business, but it depends a lot on the product and the market you are in. Some businesses, like those going after B2B, small businesses, have a harder time reaching "critical mass" because those markets are extremely fragmented. Others like Facebook, that targeted small, close knit communities with high k factors and word of mouth virality (colleges), can gain traction over night and can be very apparent. I would look for inflection points in key metrics that you are watching for your business: CPA (cost per acquisition), Organic/Non-paid acquisition, referrals, key retention metrics etc. to see if your k-factor is increasing. This can be a good leading indicator that you have reached product market fit.
Good luck and if you'd like to chat more let me know!
Answered 4 years ago
If you have data showing a correlation of traction with some other variable then monitor and/or control that other variable.
As an example of a variable you can directly control: Price. Depends on the product, but in general, as one lowers the price of something, the demand (traction) will go up.
As an example of a variable you can't directly control, but can track: Engagement. If you have a Youtube channel and you notice more of your audience leaving comments, or clicking the thumbs up button, or watching the entire video from start to end, that's not only a sign that they are enjoying your content, and will be coming back for more, but also a indicates that more and more new customers will start being drawn to your channel either by word of mouth/email referrals, or by the Youtube algorithm advertising your video more since it sees increases engagement. So you would expect traction to increase.
In general, if you are collecting data from several layers of your "sales funnel" (Google it), as you see the % of users getting to lower and lower layers of the sales funnel go up, you can expect more and more traction. Both of the above examples would predict that future potential customers would go further and further down your sales funnel, thereby increasing traction.
Answered 4 years ago