You are currently viewing Podcast Lean Startup: Pivot or Persevere

Podcast Lean Startup: Pivot or Persevere

Hello, and welcome to the bottom up skills podcast. I might pass since I am the CEO of Colton’s. And we, again, ask this question, shall we pivot or persevere with our product? And this is an okay central, uh, critical, a fundamental idea inside of the lean startup. And we are going to dive into it. It is. I got to tell you this one’s a good one.

And you know what? I honestly think it is so underestimated because I see way, way too many times companies persevering with products, services, and experiences that really should have been pivoted. And what’s really fascinating is if you actually look a lot of successful companies, they’re made up of a series of really well [00:01:00] thought out rigorous decision-making around this choice between a pivot or to persevere.So I’m hopefully going to decode and unlock this for you today. This is a very. Very important, uh, piece of the lean startup. Um, it is an essential thing to embrace. Just it’s going to help you build a better product and it’s going to, as you would only expect from Eric Reese and the lean startup, it’s going to give you some very strong accountability on how to build a better product to make something that’s actually worth using and worth building.Okay. So a little bit of context here. When we talk about this pivot or persevere question, it’s all done in the context of learning, right? And it’s the build measure learn loop. That is the lean startup. And I got to tell you it’s all iterate, iterate, iterate, continuity. You don’t [00:02:00] just ask this question.

Once you ask it all the time. Do we pivot? Do we persevere because you’re in a continuous cycle, a continuous loop of growing your product. Step-by-step question by question, proving out your hypothesis or disproving your hypothesis and building a new one. So let’s, let’s kind of try and bring ourselves into what the pivotal persevere question looks like and how it works.Okay. First let’s just get the definition, right. A pivot is, you know, if you think about it, it’s a change in the strategy without changing the vision. So what I mean by that is you can have this huge vision. To help a particular customer segment. Maybe it is to fix a big problem in the [00:03:00] world. That’s great that doesn’t have to change, but how are you going to get there?

Right. What’s the strategy for doing that? That can change a lot. And the pivot is this moment where after measuring. We changed the hypothesis and we try a new approach that might yield better results. Okay. So let’s unpack, unpack that a little bit. That one’s pretty, pretty deep. So, you know, you, you, you, you’re building a product.

Um, let’s say it’s a podcast app and you have this idea that there’s not enough conversation and commenting and sharing of podcasts. It’s all a bit ad hoc and it’s too hard. And your vision is that you want to get the very best, uh, relevant content to people around the world. You think it’s too hard to find there’s too much hidden treasure.

Um, there’s all these rough diamonds hiding out in the world and you want to make it easy for people to [00:04:00] discover new podcasts. Okay. That’s your vision of the world and you think people will be much happier if they, uh, if they get access to lots of different podcasts, but you might have a particular strategy for maybe you emphasize the commenting of the podcast, or maybe it’s the sharing of the podcast or the liking.And you might try this as a strategy in your prototypes, in your MVP, and you might find. That let’s say you did it all around reviews, but people just don’t want to write reviews for their podcasts. Maybe they don’t want to write it because they’re too busy listening and you can’t do two things at once.

Maybe that’s what you discover. So you can still stay true to your vision of helping people discover new podcasts, but maybe. Instead of doing it through the commenting it’s through liking or maybe your strategy is not to focus on the [00:05:00] liking, but there are different ways of doing it. Maybe there is an algorithm that measures your consumption and you don’t have to do anything in that creates a recommendation engine, just like Amazon.I mean, I, I’m getting a bit excited here about this product actually, but my point is this, you could go so many different ways of. Having a strategy to realize this vision of a precast discovery service. So my point is that you might test one of these and you may discover that the strategy is not right, and you’re going to try a different one.Then hopefully that will yield better results. That is a pivot. You’re like we tested the route. We just couldn’t get the results. Not enough. People were reviewing, liking, writing, sharing the podcast. So, you know what. We are going to try an [00:06:00] alternative strategy to achieve the vision. Now what’s so powerful about pivoting is that if you go to Jeff Bezos, CEO, and founder of Amazon, he says, be stabbed on your vision, but flexible.

On how you get there. And this is exactly what Eric Reese says in the lean startup too. Like, don’t be too attached to the strategy and, Oh my gosh. Do I see people so attached to a strategy, particularly in the corporate world, people selling a strategy and then it’s like, it can never be changed because that’s what we promised to the boss.No, I think you should do a differently, you should promise a vision. With a plethora of strategy, possibilities that you will test validate in order to discover the right one. Okay. So we’ve dealt with the first half of this question, the pivot, right? So you can stay true to your vision. You can change the [00:07:00] strategy and I just keep testing, looking for results.

Now what’s the other alternative to the pivot persevere. This means a totally different situation where you’ve got this vision. You’ve tested a strategy. And the results look pretty good. Some might even say encouraging. Now, this is where you really need to persevere. Get really forensic and rigorous, go deep into all the little tweaks that you can do.

And, uh, I remember. Working with a great creative director in the U S and he always had, when he was persevering with a great idea, he always had this, uh, visualization of, um, a point system when we would make a great, uh, Television ad. [00:08:00] And you’d say, you know, you started a hundred and every, uh, every time you change it, you need to be pushing the quality towards a hundred out of a hundred.Likewise, you don’t want to make too many changes and start sending it to the negative. So in this case, I want you to imagine that you have. Some early stage results that give you a, like a 60 or 70 out of a hundred. And what your job to do is if these numbers look good, you want to continually see gradual improvements through your perseverance.

So you’re testing your product and you’re like, Hey, the engagement is slowly but surely continually increasing and compounding. So, if you go back to our previous episode, we were looking at the engines of growth within lean startup. You would want to see an improved usage frequency. If it’s a sticky [00:09:00] product, I would like to see an improvement in the firewall coefficient.

If it’s a viral growth engine and you would want to gradually, but surely. Improve your cost per acquisition for a paid product. This is what you want to do now. Here’s the trick. Here’s the gotcha. There is no scientific standard to making that pivot or persevere decision. It is question of judgment. Okay.So. It can be, um, subjective. I wish it was more black and white, but here’s a rule I would encourage you to consider. You should pivot. If you continually get diminishing results of improvement, uh, less [00:10:00] increments of improvement. If you start to flatline after several rounds of testing. On your product, if you’re still.

Kind of at a 60, 70 out of a hundred and it’s getting harder now, you’ve kind of explored all the options and you can’t get into the eighties or nineties out of a hundred. This is a moment where you’re, you know, this stagnation, this is where you have to ask, have we achieved a sufficient result or are we struggling?And we’re running out of momentum because if you start to nod to those questions, then you need to consider. Um, pivoting when you should persevere, is that each time you test, you’re making some level of improvement and you’re starting to see against whatever your measure is. Hey, you know, customers come back.

Once a week or at least twice a month. Hey, each [00:11:00] customer is almost bringing an entirely new customer or we’re at 1.1, uh, as a viral coefficient. Lastly, Hey, we’ve got $5 to pay for an acquired customer. And we started, our budget is five and we started paying 10 and injustice. A few weeks. We’ve got that down to six.Well, I would persevere with that cause it looks like your momentum, your velocity is pretty good, but it’s always when you’re flatlining and it, the results just not quite good enough. This is the moment to ask the question, pivot or persevere. Now, just lastly, there’s all types of pivots that you can make now because I made this point that so many great companies, uh, you know, Started doing something else.

Uh, Twitter was a podcast service, for example, um, pivots are actually a really standard [00:12:00] thing. It’s really normal, no problem. And it’s really important to embrace it because you know what, sometimes we get way too stubborn with our products and we just stay on a thing because that’s what we promise someone.That’s what we raise capital with. That’s what we promised our bosses, or I just think that’s a good idea. Well, why don’t you just say, look not happy with the results. Don’t feel like we’re quite there. I’ll go and do a pivot and see what that yields me. Maybe I come back to the original idea, but let’s try some different options and you’ve got plenty.So the, probably the biggest two. Of the zoom out and the zoom in pivot. So zooming out is where you’ve started doing a small feature solving a small problem, and you’re like, Hmm, maybe we’re not solving enough of the use cases. So you zoom out and say, Hey, we’re going to be a bit broader. We’re going to try and do a few more things so we can give a high level of [00:13:00] satisfaction to the customer.So that’s what we call zoom out. Now the inverse of that is a zoom in where you tried to do too much. And actually PayPal is a great example. They tried to be an online bank. But emailing money to your friends. That was the idea. So they zoomed into that feature very important and really fun. If you think about it, what could be if we zoom out zoom in or somewhere in between really exciting, um, because a world of possibilities, um, you know, open up and look.

There are so many other places you can pivot on. I won’t list them all for you. If you would like to see them all jump on over to bottom-up dot IO, where you’ll see all of our master classes, you can get a whole deep dive into this. You can get the decks. It’s totally free to register. Um, you can get over there, but just a couple of areas.

You can, you can, I want to wet your appetite. So here’s a couple of areas you could consider pivoting. [00:14:00] You could change your customer segment, or you can stay with your customer, but just change the need. You could change platforms. You could, um, charge in a different way. You could go from SAS to one time to retail.

You could switch your engines of growth. You could change your channels. You could go from email to social IOT, whatever, or actually you might even find that. You need a different technology approach. All of those are legitimate pivots. You would look at your venture hypothesis as your starting point here.

You would use that as a way to, to play with factors. And we did a whole episode on those. So you can just go into our archive and dig that up as well. If you are interested in that, so there you have it. The big question, pivot or persevere. I really do help, uh, that this 10 minutes together, you got some inspiration or some practical tips on how you can ask [00:15:00] this question and make a better product.So to all the designers, creators, builders, and entrepreneurs out there, I really do encourage you to jump over to bottom-up dot IO, where we’re all about giving product people, the skills they need for their growth and for their products to grow as well. All right. I might pass since I’m the CEO of quality Qualitas and that was another episode of the bottom-up skills podcast.That’s a wrap.