Metrics that Measure Up

Traversing the Traction Gap Framework - with Bruce Cleveland

October 12, 2022 Ray Rike
Metrics that Measure Up
Traversing the Traction Gap Framework - with Bruce Cleveland
Show Notes

It's hard to imagine being a key part of three industry-defining product categories, which is exactly what Bruce Cleveland has experienced in his Silicon Valley software career.
 First, Bruce was an early executive leader at Oracle (first 100+ employees) as they re-defined relational databases, then on to Apple where he led the object-oriented engineering division, next he led the business development and alliances team at Siebel Systems before he took over products as they defined Customer Relationship Management (CRM), and then again at in defining Enterprise AI. Three of those experiences resulted in IPOs.
 Bruce then became a VC, first at InterWest Partners where he invested in early-stage B2B SaaS startups such as Marketo (acquired by Adobe), and then he started Wildcat Venture Partners with two other people, again focused on early-stage startups such as Vlocity (acquired by Salesforce).
 Based uponthe above experiences, Bruce wanted to create an easy-to-understand and prescriptive framework to help entrepreneurs move through each stage of a start-up's journey. The result was the Traction Gap Framework.
 The different stages of the Traction Gap Framework include:
 Minimum Viable Category (MVC): Does the market segment already exist or is there an opportunity to create and lead a new product category - creating your own category (e.g., Gainsight) presents more risk but the returns are much higher.
 Initial Product Release (IPR): The first version of the product beyond prototypes and wireframes that serves as the feedback mechanism to refine and evolve the product to present to multiple new customers.
 Minimum Viable Product (MVP): The product state that is required to acquire several new customers and provide tangible value while using early customers feedback to prioritize feature/function refinement and enhancement
 Minimum Viable Repeatability (MVR): This is the point where external investors (VCs) are most interested in investing in an early-stage SaaS/Cloud company and become seriously interested as the initial referenceable customers are in place, and the ability to leverage the learnings from early customers can now be used to rinse and repeat the customer acquisition process
 Minimum Viable Traction(MVT): This is after a company has “crossed the chasm” and is ready to materially scale a business to $20M - $50M while establishing market leadership.
 I asked Bruce about the secrets to creating a new product category.  Bruce highlighted that not everyone wants to be the spokesperson leading the creation of a new category. He used the example of Marketo, where the founders decided that Jon Miller, a co-founder, would be positioned as "the father of marketing automation" while the other co-founder and CEO, Phil Fernandez chose to primarily focus on leading strategy and operations.
 Bruce coined the term "Market Engineering" to help frame the content in his book. The basic concept is developing the positioning and messaging of the company to a few innovative and provocative concepts that everyone can easily understand and clearly differentiates the company from others. Steve Jobs at Apple is a great example of a category creator.
Bruce shared the four pillars the Traction Gap Framework including: 1) Team; 2) Product; 3) Revenue; 4) Systems.  Each pillar takes a point of prominence at various stages when traversing the Traction Gap - though TEAM is the common foundation at each stage across the journey
 If you are a student of Silicon Valley and the SaaS start-up world, starting or already on your own entrepreneurial journey, this discussion with Bruce Cleveland, who has been there and done that is a must listen.