Is it Time to Pivot?
Contemplating a pivot in your quest for product/market fit? Consider this.
Founders, here is a multiple-choice question for you. When is it time to pivot?
a) When the investor to whom you are pitching does not understand your value added or tells you the market is too small for consideration.
b) When the first few potential customers you have asked tell you your product doesn’t wow them or solve a need they would pay to solve.
c) When respected business colleagues respond that they don’t get it to your elevator pitch.
d) When you have reached out to 50-100+ potential users with a collaboratively created Minimum Viable Product (MVP) that either doesn’t solve the problem that needs to be solved or the way they need it solved.
The correct answer: d. Choices a through c are a call for reflection, not a flag for a pivot. A pivot should be based on getting substantial feedback from a wide range of sources.
Let’s define the term pivot as a consequential change to a critical element of your business model: who you sell to, how you sell, what you sell, how you make money, partnerships, operations, etc. Let’s break down each choice as it pertains to the quest for product/market fit in a market you have identified as large and growing.
Choice a: Lackluster Investor Feedback. Hmm. First, do you have customer data and traction? If your potential investor is confused but you have positive market validation in an exponentially growing market, you may be pitching poorly. Many founders focus on how their offering works and not the value added. Others struggle with quantifying the customer pain point in relatable terms for investors.
An investor needs to know how you have validated your value proposition and market expectations. You must explain that a sizeable number of customers are willing to pay for your offering because of a quantified value to them. Your bottom-up market analysis should show that your customers represent a rapidly growing market for your innovation that is very large now or soon will be.
Are you pitching to an investor who is a right fit for your business? Pitch to investors who have proven interest in your sector. Don’t rely on the opinion of a few. Talk to many to derive actionable conclusions.
Choice b: Weak Initial Customer Feedback. Are you talking to the right people? Have you reached out to a robust range of potential customers with a Minimum Viable Product (MVP) that addresses a meaningful pain point or opportunity? Have you quantified the impact of your solution versus the other options the customer has to solve (or ignore) the problem? Are you asking for specific feedback that you can act upon? You don’t have enough information for a rational pivot decision if you have not done so.
Choice c: Mixed Opinions from Colleagues. Does your elevator pitch center on a relatable pain point for which you have a scalable competitive solution that large numbers of people will pay for? Have you succinctly identified what will keep your customers loyal and profitable to you? Do you have a straightforward business model? According to Howie Liu, it took a while before anyone understood the immense value of Airtable.
Choice d: Extensive Customer Red Flags. For sure you need to pivot when this happens. You need to act when you have substantial customer feedback suggesting a more pressing problem to solve or a better viable option to offer.
When you choose to pivot is first and foremost a function of meaningful validation. In a truly innovative offering, you need to clearly show the advantage of your business mission. If you choose to pivot, it should be a collaborative effort with the customers you plan to serve and those who enable this. Clearly communicate your vision, never stop listening to what your customers and people in the field tell you, and talk to many, many people.
Keep innovating and forge ahead!
Joy Fairbanks evaluates early stage startups, advises founders, and creates programming for startup incubators and accelerators globally.