Sumanth Raghavendra , serial/parallel entrepreneur (currently founder of Q-Prize winner Deck App Technologies and Live Inbox and previously founder of Sabeer Bhatia- and SoftBank-funded InstaColl), has a great post on what should really count for "traction" - especially when it comes to seed financing. If it boggles your mind as to how a company with just three employees (the other two are founders) and which spends nothing on marketing can be unprofitable despite several thousand customers, join the club! The answer lies in the subtle sleight-of-hand: the plans offered by the company include a plan that is completely free, so the vast majority of “customers” are those who don’t pay a dime. They are therefore customers only in the loosest sense of the word. Everyone from angel investors to seed funds to accelerators are shouting from the rooftops that “traction trump...