In the context of entrepreneurship, what does 'traction' indicate?

Traction in the context of entrepreneurship primarily refers to the measurable progress a startup or business is making toward achieving its goals, often demonstrated by stakeholder validation of its ideas. When a business has traction, it indicates that there is demand for its product or service, which can be shown through customer engagement, sales growth, or positive feedback from stakeholders, like investors and industry experts.

Having traction is critical for startups because it helps to build credibility and demonstrate that the business model is viable. Stakeholder validation can encompass various aspects such as confirmed sales, interest from potential customers, endorsements from industry leaders, or successful pilot projects. This validation provides reassurance to entrepreneurs and investors that the business has potential for growth and success in the marketplace.

In contrast, market saturation refers to a scenario where a product has reached the maximum demand in a market, which does not necessarily denote positive traction. Investor interest, while important, is often a result of traction rather than an indication of it. Product usability, though crucial for customer acceptance, does not reflect the broader market traction that encompasses various stakeholder validations and business growth indicators.