When to ‘Pivot’

This is a guest blog by Jon Leighton (MD, iResources & Neatly.io) who will be sharing his experience of building and pivoting his business at our ‘Keep Going or Pivot?‘ event on Friday 19th May 2017.

Jon Leighton (MD, iResources & Neatly.io)Have you watched or heard of the HBO series Silicon Valley and the ‘Pied Piper‘ journey? While it is a comedy, there are some valid points that can be taken from the show, particularly when looking at pivoting your company and the signs you should look out for.

So, what is a ‘Pivot’?

When used in relation to entrepreneurship, pivot (which generally refers to a shift in strategy) describes the tortured path that most startups go through to find the right customer, value proposition, and positioning.

If you haven’t yet, I would recommend reading The Lean Startup by Eric Ries, there are a number of different types of pivot, but for this article we can just focus on the general definition.

5 Signs you might need to pivot your business

1. Your beta customers do not respond well to what you have built

You have spent ages building your product, testing the market and building up an email database of everyone who wants to test it out. So you set up user focus groups or send them an exclusive invite to test out your beta, it is a nerve wracking time and you’re pacing up and down the room waiting for your survey results to start coming back in.

Survey results start to come in and they are average, and not what you’re expecting, it can be tricky to stay motivated when this happens but it is important to understand what you are being told. If necessary, follow up the survey results by asking them for 5 minutes of their time to ensure you fully understand their feedback.

2. Your retention is poor (i.e they just don’t come back)

You have lots of people signing up, but they don’t seem to come back, ever! So while your growth metrics are looking healthy, your retention, churn and revenue metrics are all looking weak. Your customers are showing an interest in your product but after creating an account they just don’t come back.

This could be for a whole host of reasons, including:

– You are targeting the wrong market
– Your message is not clear and your users are expecting something else
– Onboarding process is too complex and users just leave
– Doesn’t solve a problem or enough of the problem to utilize.

3. You spend more time educating your customers than they do actually using it

You may well have the next thing to change the world forever, but you seem to spend more and more time explaining what you do to your customers, and it takes ages.

You may be ahead of your time and the market isn’t quite ready for you yet. Or you may have solved a problem with a complicated solution that provides the end user with a different set of problems, so much so they just don’t bother.

4. Growth is weak

This is one to analyze carefully, as slow growth can be caused by a number of reasons, and pivoting is not always the solution.

Assuming you have tested the product and have some users, it would be a good idea to review your channels to market and how effective they are. It might not be that your product isn’t required or of any interest, but that the right people just don’t know about it yet.

So if your product is not getting a decent amount (or any) traffic, then it’s worth looking at your marketing strategy before changing the focus and strategy of your entire company!

If you are getting lots of traffic but no one is signing up to your service, then this will need more thought. However, it is worth reviewing your content and the message you are sending to your users.

– Is it clear?
– Will your customer understand your proposition?

When your user growth is weak, and returning users (the ones that actually signed up) are on the decline, then this is an area to address and not delay in finding out why!

5. You are running out of cash, fast!

Monitoring your cash flow is critical to the success of your business, you can be the leanest, meanest startup with minimal outgoings but, if you have no revenue coming in at all, things are going to get tricky.

Moving in a different direction is likely to cost money, so it is incredibly important not to leave this decision until it is too late and you have no money left, and therefore unable to carry on in any shape or form.

Once you have identified the need to pivot and the direction required, you should act upon this quickly. One of the great benefits of a startup is their ability to be agile and adapt quickly to a changing environment.

In any of the scenarios above, one of the most important elements to success, is surrounding yourself with people who will tell you the truth and not just agree with you ‘because you’re the boss!’
Being able to speak frankly is difficult but equally important, everyone will have some form of emotional attachment with what you are doing.

Launching a new business can be an emotional rollercoaster it is important these feelings do not get in the way. Identifying the underlying cause of your problems is key to the future and survival of your startup.


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