This is fascinating. But what happens when all VCs move to being this data-driven? This seems like a differentiator for now (and the patent pending bit is interesting), but won't more investors expect more access to raw data, rather than relying on the glowy presentations of founders?
And, how does the Traction API correct for abuse/cooked books? What if I send them all sorts of data that merely looks like traction, but is just made up? What if my app is huge with robots? Will I get an investment?
@chrismessina All VCs are pretty much data-driven already. Try raising money from one and the first question they'll ask you is "what traction are you getting?"
As far as investment, traction is only the initial signal. We still conduct full due diligence to verify the data that we received via the API. We also look at the team, vision and market potential before proceeding with any investment.
@chrismessina@clarencewooten I can't help but think this would be a much more attractive product for entrepreneurs if it was more of a platform rather than a glorified deal funnel.
Trust is paramount in a relationship like this.
Had you thought about creating a marketplace instead of using it as deal flow tool at any point?
As an entrepreneur when thinking about raising capital, one of the first things I am thinking about is how does this investor help me strategically. The actual capital is a commodity at this point.
@chrismessina@BlendahTom I agree 100%. As an entrepreneur myself having raised plenty of venture capital... I recognize the desire for a value added investor. As a result, we are providing lot more than then a glorified deal funnel. We're interesting in helping all founders get to product/market fit... even if we never end up investing.
As far as becoming a marketplace. It isn't mutually exclusive. We ultimately intended to be that as well. Our primary goal right now is to be helpful to all founders by providing data-driven insights, tips and more.
@clarencewooten why would you need an API to get the key data from someone? Is this a way to mass screen large quantities of start-ups?
You only have to ask, and as a credible VC/Angel most folks will give you an insight into their traction. I'd hope. And as you point out, these KPIs are just the start.
On that note... ;)
* started coding in May, beta in Oct
* 2k users, then 12k, then 25k
* see http://www.producthunt.com/posts...
@chrismessina Philosophically we are on the same page. #1) We would love all startups to be able to use the Traction API #2) We would like all investors to be able to access that data (based on entrepreneurial approval). If we did these two things successfully, the whole community would benefit. Like all startups, we are resource constrained, there we have to prioritize steps. It would be good to sit down with you to talk about what practical steps we could take to accomplish these goals. We want the community to help shape what we're doing.
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