The Physics of Potential Traction
And the time I got chased out of Ferrari’s Maranello HQ because of it
One of my favorite things about my portfolio is the fancy schmanzy client logos on it. Of which the fanciest and schmanziest of all is probably Ferrari.
But the best work I did for Ferrari was the product I refused to build for them. And they certainly did not thank me for it at the time.
It was roughly September 2010, the iPhone App Store was a couple of years old and one thing everyone knew FOR SURE was that creating an app for sale in the iOS app store would make you MILLIONS!
Everywhere you looked, brands and hackers alike were making apps, selling them for a few bucks each, and making kajillions from eager iPhone users. Even the industry press started advising clients to pay their agencies with a revenue share model rather than up front…
…and somewhere an emperor proudly displayed his new clothes to an adoring audience.
I was on a hot streak in my career, with a sweet job as lead for automotive at AKQA in London, which gave me Alfa Romeo, Ferrari, Fiat, and McLaren as clients. Elsewhere in the office, our teams were cooking up iPhone apps on revenue share for a few clients, including one for a certain world-famous chef.
Then one day I received a call from our Ferrari client in Italy asking if we would be willing to build a Ferrari Formula 1 app for iPhone. They didn’t much care what exactly it did, only that we designed and built it for free, then split the winnings with them.
This was a dream brief for me, except for one major problem.
As I started to sense-check the revenue opportunity vs our costs, I discovered that something like 2/3rds, if not ¾’s of iPhone app revenue came from the USA, and at that time, Americans did not give a crap about Formula 1. If you were to draw a Venn diagram of F1 fans in the USA at that time, the overlap would be tiny.
If the request had been to create an iPhone app about Ferrari sports cars for Americans or create a desktop computer game for European Ferrari F1 fans, then it would have been a great opportunity. But no matter how awesome we made an F1 iPhone app in 2010, it would never have made enough money.
It had no potential for traction.
Armed with this realization, I set off to save Ferrari from themselves. I boarded a BA flight from London to Bologna, then a taxi to the home of Ferrari itself, Maranello.
Maranello is like Disneyland for Ferrari fans. My team and I had breakfast outside a cafe by the legendary Fiorano test circuit, sitting at a table next to real F1 pit crews while our conversations were punctuated by the ear-splitting scream of Formula 1 race cars streaking past.
Here I am as I entered the hallowed gates of the Ferrari factory, entirely optimistic they would thank me for my realization of the F1/App store problem and gladly buy my alternate proposals of either an iPhone app about Ferrari sports cars for the USA, or a desktop-web based F1 app for the rest of the world.
They did neither of the sort.
In fact, in the shouting and gesticulating style that only Italians can deliver, my client delivered his outrage that we would dare question their idea and decline their project. My assessment of the market, he said, was simply proof that I did not understand the Tifosi and did not deserve to work for them.
I was swiftly ejected from the building and informed that a complaint would reach my superiors faster than even my psycho taxi driver could return my culo to the airport.
Fortunately for my culo and my career, our CFO was at that very moment panicking about the dodgy economics of our other app revenue share projects and instructing account leads to stop selling them without a clear projection of the revenue they would make.
Because when you work on a project with no market potential for traction, it does not matter how great the product or brand is.
Luckily, Potential Traction is a force that exists before even your product exists, which means you can understand it and design for it from the outset.
Let’s look at how…
A First Law of Startup Dynamics.
High School physics is something I barely scraped through, but I do have a vague recollection of something called the First Law of Thermodynamics, which Notion AI summarizes as:
The First Law of Thermodynamics, also known as the Law of Conservation of Energy, is a fundamental principle in physics introduced by Julius Robert von Mayer in 1842. This law states that energy cannot be created or destroyed, but it can only be transferred or changed from one form to another.
I always found this rather difficult to wrap my mind around. Particularly the “cannot be created” part of the law, which relies on a concept of “potential energy.”
Potential energy is the energy that an object has because of its position or condition, rather than its motion. For example, when you lift a ball, it has gravitational potential energy due to being elevated against gravity. The higher you lift it, the more potential energy it has. If you let it go, that potential energy converts into kinetic energy as the ball falls.
So let’s imagine a bowling ball, precariously balanced on the edge of a wobbly shelf, which in turn is positioned above a glass cabinet full of fine china. We can’t see the potential energy stored within the ball, but it takes only a small nudge of imagination to visualize it coming to life.
The key point is that positioned as such, the potential energy stored within the bowling ball is a prior state of energy that exists BEFORE the efforts of your cat to bump into it and convert it into downward motion and a smashing sound.
Can Startups Create Something from Nothing?
It’s often said that one of the best things about startups is that they create new value out of nothing.
But wait. Is that really true?
Are startups really immune to the laws of physics, and able to create new energy out of thin air? Or is it more helpful to think of startups as transferring energy from one form to another?
Like your cat dislodging the bowling ball, what startups actually do is just unlock a prior form of potential energy that already exists, and convert it into customers, delight, and money.
The potential energy in question is stored in the form of a problem or underserved need that is unresolved in the market.
How much potential energy depends on how the need is experienced by a certain population of people.
The big unsolved problem causing massive pain for a huge number of people = high potential energy
A minor annoyance that inconveniences a small number of people = low potential energy
A problem that nobody at all experiences = no potential energy.
The last point is the most important.
You can’t create a problem that doesn’t exist.
Sure, you can make someone see a problem that they have but don’t perceive, but the problem does actually need to be there.
No enduring, valuable startups exist that don’t serve some genuine form of prior need. This is why VCs always want to understand what problem your product solves.
The problem is what makes the solution valuable.
Startups Convert Potential Traction into Actual Traction
Just like potential energy, Potential Traction is a prior state that exists BEFORE your product or startup.
Understanding this exposes the futility of toiling and tinkering for months or years on a product that never contained enough potential traction in the first place.
So instead of doing that, a more fruitful path is to:
Find a great source of potential traction
In the form of an unmet need that a lot of people really care aboutCreate the conditions for the maximal release of traction
By conditioning the market to invest in solving their problemUnlock that potential as effectively as possible
With the best product, design, tech, and company that you can create.
This poses an obvious question:
Can Potential Traction Be Measured?
Physicists have refined formulas for calculating the various forms of potential energy.
For example:
Gravitational Potential Energy: This is the energy an object possesses due to its position in a gravitational field. It is measured using the formula:
𝑃𝐸=𝑚×𝑔×ℎPE=m×g×h
Where:
𝑃𝐸PE is the potential energy,
𝑚m is the mass of the object,
𝑔g is the acceleration due to gravity (approximately 9.81 m/s² on Earth),
ℎh is the height above a reference level (such as the ground).
Meanwhile, the Potential Traction of your startup is a function of:
The severity of the problem or need as perceived by a potential customer
The number of such customers that exist
The ability of your product to solve the problem delightfully
Plus other factors which we’ll come back to shortly.
Can Potential Traction Be Changed?
Suppose you start to run the numbers on your potential traction and realize it is lower than you hoped.
It’s great you now know that to be the case, but is there anything you can do about it?
Well, yes.
1. Positioning
Note the bit I bolded earlier in the definition of potential traction:
“Potential energy is the energy that an object has because of its position or condition, rather than its motion”
In physics, positioning can increase or decrease potential energy. Our bowling ball balanced precariously on the unstable shelf has more potential energy than an identical ball nestled in a ditch at ground level
In business, positioning can also influence potential traction.
How you position your product in the market, and who you position it for creates a radical difference in the potential traction that can be unlocked from it.
A video social app positioned for Gen Z has more potential traction than the same product positioned for Seniors
A luxury clothing store of top designer brands does not find traction when positioned in a bad neighborhood on the wrong side of the tracks
A brilliant new CRM positioned in a crowded segment has no PT until repositioned to a fresh and valuable new segment with less competition
And so on…
2. Timing and context
WHEN you choose to introduce your product, and the context into which it enters matters.
The Formula 1 iOS app had no potential then, but 15 years later with iPhones now global and F1 finally popular in the USA, it probably would have today.
Propositions of “Powered by AI” have inflated Potential Traction right now, but as we pass peak AI and excitement cools, the Potential Traction for such propositions reduces.
This is why VCs often ask “Why now?” This question is not just about “why could this not have been done before?” It also challenges whether you might be too early, and seeks validation that the market context provides some helpful wind in your sails.
3. Customer and problem
Not only is it a major problem, or is the audience large, but what is the intersection of the two?
In other words, how does the market perceive and value the problem? Are most people keenly aware of the problem and desperate to buy a solution? Or do they not even understand they have the problem, or even believe it is solvable?
Read my previous article and resources on The Problem Perception Spectrum for more on this.
And Many More Factors
This is not an exhaustive list, and unpacking all the influences probably deserves a separate post.
But for now, the most important takeaway is not exactly HOW to measure potential traction, but that you should at least start considering it as early as possible - ideally before you even build a prototype.
Potential Traction Is Mostly Leveraged Outside Of Your Product.
The aforementioned methods of increasing potential traction are not attributes of your product itself, but changes in the context surrounding your product that mostly define the amount of energy that can be harvested by your product.
This is also similar to the physics of potential energy.
Our precariously placed bowling ball does not actually contain any real energy of its own. The real potential energy comes from the gravity that acts upon it. Gravity is the real force, the bowling ball is just a dumb object affected by it.
Perhaps this is why category designers like
say that the “category makes the product, not the other way around.”The extrinsic forces of demand and positioning offer an exponential impact on your product, whereas changes to the product itself only influence whether the product can live up to 100% of its potential.
In other words,
Intrinsic factors are the differences between between 20% or 100%,
Extrinsic factors make the difference between 100% or 100X.
This is why it is so wrong to start the startup process by just tinkering with a product or focusing on problem-solution fit before worrying about market traction.
This is why it is essential to design your traction before you design your product.
Score Potential Traction First
This article only begins to open and unpack the topic of potential traction but is not a comprehensive account of it.
For now, the first step is to start considering potential traction as early in your journey as possible.
Most entrepreneurs do not start considering potential traction until after they have already “solved” their product, which is far too late.
As mentioned in The Traction Native Startup Way, to leave traction until after the product is complete is not only leaving the most existential threat until last, but it risks wasting all the other work you’ve done until that point. Build a product now that you later discover has no potential for traction, and your later pivot to recover may make your shiny new product redundant.
I know because I’ve lived through this pain myself.
At Topology we assumed that our traction would come from affluent older millennials through DTC channels, so we built the company, product, and ecosystem to enable this. Only later did we realize that the potential traction we needed would only come from older Gen X & Boomer customers - but they wanted to buy from retailers, not online. So with great pain, we had to replace a 3rd of the company, rebuild the product for retail, and start channel marketing from scratch.
The question that I could not escape after that experience was “Could I really not have anticipated that in advance?”
Maybe. Maybe not. But the key difference between the outcome for Ferrari and the outcome for Topology was whether or not I even tried.
This is a change you can make right now.
Start today, ask questions now.
Though the ideas and techniques of Traction Design are delivered just a few times per month in this publication, they are quick to explain in person.
So if you want to unpack any of these points and explore what they could mean for your startup, give me a shout.
You can access a free meeting via my Substack subscriber’s office hours when you subscribe, or DM me via LinkedIn and we can set up a time.