Why founders hear “too early” from investors and what to do next

Most founders assume “too early” means one thing.

Usually, it doesn’t.

During a recent mastermind session for Focused For Business’ community of startups, we discussed one of the most common founder frustrations:  Hearing positive feedback from investors, only to find the conversation ends with some version of:

“Come back when you’ve got more traction.”

Focused For Business expert mentor and product development specialist Matt Langford explored what investors are really saying when they use that phrase, and how founders can build traction in a more credible, commercially useful way. This sparked a discussion where startup founders contributed their valuable insights and shared practical lessons from their pilots, trials and early customer validation.

The central message throughout the discussion was simple:

Traction is not about looking bigger.
It is about reducing perceived risk.

What investors often mean by “too early”

One of the most useful insights from the discussion was Matt’s explanation that “too early” is usually shorthand for:

“This still feels too risky.”

That risk can exist in several places:

• The investor is not convinced demand exists
• The founder has not yet demonstrated commercial behaviour
• The route to market feels unclear
• The product still feels hypothetical
• The traction evidence is too weak or too vague

Matt explained that founders often misinterpret this feedback and assume the answer is simply to build more product.

In reality, the issue is often not product development.
It is credibility.

Investors want evidence that real people genuinely want what you are building.

The traction mistake many founders make

A recurring theme throughout the session was that founders often spend too much time building and not enough time validating demand.

Matt described this as an imbalance between “supply” and “demand.”

In practical terms, founders frequently focus on:

• Features
• Technology
• Engineering
• Product development
• Infrastructure
• Perfection

Before properly testing whether customers care enough to buy.

This is especially common in technical and innovation-led businesses where founders naturally enjoy solving complex product problems.

But investors are not funding product complexity alone.

They are funding evidence of commercial potential.

Traction is not vanity metrics

Another important point Matt raised was that many founders unintentionally hide their most valuable traction signals.

Founders often feel embarrassed by:

• small customer numbers
• early pilots
• limited revenue
• niche case studies
• small-scale trials

But investors frequently find those details more persuasive than huge market projections.

Why?

Because specific evidence feels believable.

A slide saying your market is worth £5 billion means very little on its own.

A story about a paying customer who achieved a measurable outcome using your product is far more credible.

Matt explained that traction creates a believable bridge between today’s reality and tomorrow’s scale.

The founders who gain traction fastest usually focus narrowly first

One of the strongest concepts discussed during the session was the idea of “hair-on-fire users.”

These are not simply people who could use your product.

They are the people who feel the problem so acutely they would be “crazy not to” solve it.

That distinction matters.

Many founders pitch broad markets too early:

“Everyone could use this.”

But broad markets create vague positioning.

The strongest early traction often comes from solving an urgent problem for a very specific group of people first.

Matt gave the example of biodegradable packaging. Initially, the opportunity appeared broad. But the real traction opportunity emerged when they identified companies already being fined for failing recycling compliance thresholds.

The product was no longer “sustainable packaging.”

It became:

“We help reduce costly compliance fines.”

That is a far clearer commercial proposition.

Why outcomes matter more than products

Another major theme throughout the discussion was that founders often become too attached to the product itself.

Matt encouraged founders to think instead about outcomes.

Customers rarely buy technology for its own sake.

They buy movement from one state to another:

• less cost
• less risk
• more efficiency
• faster delivery
• reduced frustration
• improved revenue
• saved time

This mindset shift is important because it creates flexibility.

Sometimes founders believe they must finish building a full platform before they can sell anything.

But if the outcome can already be delivered in another way, traction conversations can begin much earlier.

The most useful traction question founders can ask

Matt repeatedly returned to one practical question:

“What would make this a no-brainer decision?”

That question changes how founders approach validation.

Instead of asking:

“Do people like the idea?”

The better question becomes:

“What result would make someone immediately willing to commit?”

This leads to stronger conversations around:

• ROI
• urgency
• operational value
• commercial outcomes
• measurable impact

And those are the conversations investors care about.

What real traction evidence actually looks like

Matt broke traction evidence into three levels:

1. Evidence the problem exists

Discovery conversations, recurring frustrations, DIY workarounds and clear pain signals.

2. Evidence people want a solution

Waitlists, engagement, expressions of interest and active feedback.

3. Evidence people are willing to commit

Pre-orders, paid pilots, customer time investment, testimonials or commercial discussions.

The further founders move towards commitment, the stronger the traction becomes.

And importantly, commitment does not always mean large revenue immediately.

Even small financial commitments can dramatically strengthen investor confidence.

Why free users can create misleading traction

One startup founder shared an important lesson during the discussion.

He reflected on building an early-stage product that initially attracted many free users, but generated little useful commercial insight.

His conclusion was direct:

If nobody is paying, the traction signal may be weaker than founders think.

Matt reinforced this by describing businesses with large waitlists but very low conversion rates once payment was introduced.

Interest matters.
Commitment matters more.

Why pilots can either strengthen or weaken your business

A particularly valuable part of the discussion focused on pilots and trials.

Matt explained that pilots should not simply generate technical data. They should also test commercial willingness.

Before running a pilot, founders should ask:

• What would success look like for the customer?
• What measurable outcome matters most?
• What would make them commit commercially afterwards?

Another startup founder shared an example of running an unpaid pilot with a university around student wellbeing.

Matt’s response was nuanced.

Unpaid pilots are not automatically bad. But founders still need to understand whether future budget and commercial intent genuinely exist.

Otherwise, founders risk generating activity without real traction.

Traction conversations are really sales conversations

One of the most important mindset shifts from the session was Matt’s reframing of traction-building as early sales activity.

Many founders delay commercial conversations because they feel:

• the product is not finished
• the prototype is too early
• the platform is incomplete
• they are still “in beta”

Matt challenged this directly.

He argued that founders should ask:

“What could I realistically sell tomorrow?”

That question forces clarity.

Because traction does not come from product perfection.

It comes from proving somebody values the outcome enough to commit.

Final thought

The strongest founders do not wait for certainty before testing demand.

They move early.
They validate quickly.
They learn commercially.
And they reduce risk step by step.

Investors are rarely looking for perfection.

They are looking for evidence that the founder understands:

• the customer
• the urgency of the problem
• the commercial value
• the route to traction
• and how to turn insight into momentum

That is what moves a business from “too early” to investable.

If you are preparing your business for investment, why not join a free, online Funding Strategy Workshop where you will hear three insights that increase your chances of successfully raising investment and can ask any questions you may have. Book your place.

Matt is a Focused for Business expert mentor and the founder of People Planet Product. You can connect with him on [LinkedIn] or use his [Traction Audit] to assess the commercial readiness of your hardware product. 

FAQs: Startup traction and investor readiness