Entrepreneurs need to be able to simultaneously pitch a big long-term vision while staying grounded in short-term actions to move their vision forward.
Product Roadmaps have traditionally been used for rollout planning. But product roadmaps assume you know what you’ll be building for the next 18-24 months, which you don’t.More importantly, they put you back in the old world of waterfall planning, where any future deviation from the plan will be seen as a sign of weakness.
How do you reconcile making actionable plans under conditions of extreme uncertainty?
In today's issue, I'll show you how.
Meet the Traction Roadmap.
Unlike a product roadmap, a traction roadmap isn’t output-oriented but outcome-oriented. As the goal of a startup is building a repeatable and scalable business model, the only measurable outcome that matters is traction.
A Traction Roadmap charts key traction milestones in your journey from idea to building a repeatable and scalable business model.
How to Create a Traction Roadmap
There are two recipes for creating a traction roadmap:
- 👨🍳The Rapid Traction Roadmap
- 👨🍳The Customer Factory Traction Roadmap
Let's cover each.
1. 👨🍳The Rapid Traction Roadmap
This recipe uses a Fermi (order of magnitude) Estimate to pick a meaningful Minimum Success Criteria (MSC) goal, which you then convert into a customer throughput (or traction) metric.
I outlined how to do these first two steps in this issue, where I covered the Rapid Viability Test.
Creating a traction roadmap from your 3-year minimum success criteria goal is simply extrapolating backward using a growth rate. I recommend using a 10x/year growth rate in classic Fermi style.
Contrary to common belief, 10x'ing isn't just for hyper-growth startups. All startups can 10x two or more times in the first three years, provided you start counting from customer #1.
Don't believe me? Work the numbers out for yourself.
2. 👨🍳The Customer Factory Traction Roadmap
While Fermi Estimation is highly effective for quick ballparking, if your model survives the Rapid Viability Test, I recommend creating a more accurate roadmap next using the 👨🍳The Customer Factory Traction Roadmap recipe.
You aren't restricted to power of 10 estimation (or 10x growth) here, and this model uses three additional metrics: customer acquisition, churn, and referral rate assumptions to chart your Traction Roadmap.
The screenshots above are from the LEANSTACK Traction Roadmap tool which is included in my Business Model Design course.
Pitch Your Traction Roadmap with a Now-Next-Later Rollout Plan
Janna Bastow's Now-Next-Later product roadmap inspired the Now-Next-Later Rollout Plan. The basic idea is viewing your traction roadmap using three-time horizons and formulating a go-to-market (GTM) plan for each time horizon.
As can be expected,
- your now plan should be the most concrete,
- your next plan less so, and
- your later plan the fuzziest.
Now-next-later planning intends to stretch your thinking and plan around time frames versus specific deadlines. Your time-frames are subject to whether you currently have traction (customers) or not.
For products at the ideation stage:
I recommend using yearly time frames to set your time horizons.
This breaks your Minimum Success Criteria into three milestones: Year 1, Year 2, and Year 3 — that roughly align with the three distinct segments of the hockey-stick curve:
- a flat section,
- followed by an increasingly steeper section
- until you hit a noticeable inflection point when the curve shoots up.
For products with some traction already:
I recommend using progressive doubling to set your time horizons.
Set your first time-horizon (NOW) to +90-days (3 months). Why 90 days? Because it's long enough to increase traction while short enough to drive a healthy sense of urgency.
Set your second time-horizon (NEXT) to +180 days (6 months) from NOW. This stretches your planning to your next two 90-day cycles, putting you out nine months.
Set your third time-horizon (LATER) to +360 days (12 months) from NEXT. This stretches you even further, putting you 18 months out.
Let’s see a real-world example of a Now-Next-Later Rollout Plan.
Case Study: The Secret Tesla Master Plan
I’ve previously written about how Tesla launched their first car four times faster than any car company by thinking outside the box — utilizing a 👨🍳Wizard of Oz recipe of licensing versus building an entire car:
However, did you ever wonder why they chose an expensive sports car over a more affordable one? Wouldn’t a more affordable car, like a Ford Mustang, sell more cars?
While positioning was part of the answer, the real reason was that they were following a deliberate 3-part strategy that Elon Musk teased (and blogged about) in 2006:
- Build sports car (sell hundreds)
- Use that money to build an affordable car (sell thousands)
- Use that money to build an even more affordable car (sell tens of thousands+)
Ten years later, he explained the plan during the Model 3 launch event:
How would he have pitched his vision and rollout plan in 2006 before any cars were built (or even designed)?
Big Vision
…the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution.
Traction Roadmap
Sell 500,000 electric cars by 2020.
NOW Story (Most Concrete)
Build a low-volume, high-price sports EV to lower demand while de-risking battery.
- Use the 👨🍳Wizard of Oz recipe to license an existing sports car and fit a battery.
- List possible sports car companies to approach
- Run a pre-order campaign (demo-sell-build)
- Hire scientists/engineers to work on building a battery
NEXT Story (Fuzzy)
Build a mid-volume, less high-price EV sedan to increase demand while de-risking going mainstream risks.
- Build a sedan (design and product features largely unknown)
- Build/acquire a factory
- Hire automotive engineers and designers
- Design and build a sedan
- Improve battery
- Build infrastructure for charging, selling, and servicing cars.
LATER Story (Most fuzzy)
Build a high-volume, affordable compact EV to maximize demand after addressing most starting risks.
- Build a compact car at a $30-40k price point (design unknown)
- Leverage learning from stages 1 and 2 to scale
