For Tony Faure, ex-CEO of NineMSN turned successful start-up investor, pivoting needs to be carefully defined as a change of tactic, rather than a complete change in business model.<\/p>\n
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\u201cAll companies should go hard on their initial idea and test if it works,\u201d he says. \u201cMany of them then use that germ of an idea in another way and attack it in a different way. That\u2019s pivoting.\u201d<\/p>\n
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\u201cLasttix (Faure is an investor and chairman) began life as MyTickets, which was a classifieds market for tickets. It acted as a big search engine for tickets to help promoters sell more of them.\u201d<\/p>\n
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\u201cIt turned out that this model didn\u2019t have a huge value for promoters, but what came out of that was Lasttix, which very clearly works and is a valid model \u2013 it\u2019s lower cost and can operate as a smaller organisation.\u201d<\/p>\n
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\u201cThe proposition of the business \u2013 to help promoters sell tickets \u2013 didn\u2019t change, it was just the way we delivered it. If your initial assessment isn\u2019t tight, you need to move quickly.\u201d<\/p>\n
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\u201cBut changing from running a jobs site, for example, to a real estate agent site is changing to something with a completely different proposition and with different customers. That\u2019s not a pivot. It\u2019s a fail.\u201d<\/p>\n
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Sauvignon says that start-ups should make daily tweaks to their business in response to what they\u2019ve learned.<\/p>\n
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\u201cLaunching your product \u2013 ideally in the first days of the start-up’s life \u2013 will most likely bring back learnings that will, one way or another, require some sort of changes,\u201d he says.<\/p>\n
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\u201cIn this context it becomes clear why launching as early as possible is so important for web start-ups.\u201d<\/p>\n
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\u201cIf your product is very simple and the market tells you that this is not what it wants, it will then be easy to pivot onto something that the market actually wants.\u201d<\/p>\n
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If you are considering pivoting your business, there are three key considerations you need to make:<\/p>\n
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Your business may not be hitting the mark, but how do you quantify this?<\/p>\n
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You need a defined measure of success or failure in order to know if you\u2019re on track or not.<\/p>\n
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\u201cDon’t pivot because your friend thinks you should,\u201d says Sauvignon. \u201cPivot because you’ve learned something through a substantial test.\u201d<\/p>\n
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\u201cFind the right metrics for your business as soon as you can. Base them on real value. \u2018New users\u2019 is often not such a good metric. \u2018Time spent using the product\u2019 might be better, for example. If well picked, your metrics will signal you when and why to pivot.\u201d<\/p>\n
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Once you\u2019ve made your assumptions, don\u2019t just proclaim yourself a business genius and smugly await your payday.<\/p>\n
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You need to test the ideas underpinning your start-up idea.<\/p>\n
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\u201cRunning a start-up is hard \u2013 if it were easy, everyone would do it,\u201d says Faure.<\/p>\n
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\u201cYou make a lot of assumptions when you start but you\u2019ve got to test them really hard. If they don\u2019t work, that can be a good thing, because you can build a better business out of it.\u201d<\/p>\n
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\u201cEvery good founder starts with a validation point \u2013 typically, it\u2019s customers. Find out what they think by talking to them. Once you can get one, then five, then 50 customers to validate your business, you are on the way to testing your assumptions.\u201d<\/p>\n
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If you\u2019re going to pivot, don\u2019t wait until you\u2019ve burned through all of your money on a failed approach. Do it early on.<\/p>\n
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\u201cDon’t be shy or ashamed to pivot,\u201d says Sauvignon.<\/p>\n
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\u201cPivoting can be an emotionally tough decision to make. But better recognise your business\u2019s weaknesses early on, rather than waste your investors\u2019 money and employees\u2019 time building something that the market has clearly told you it doesn’t want.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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