Updated: Feb 25
Startup founders, you're where you are because you're smart, committed, passionate, and supremely confident. The startup life is tough so it takes all that and tons more to persevere through the crazy roller coaster ride. When customers don't buy the way you'd hoped the reaction is usually to reject any admission of failure and to work harder, plow forward, and try to will the thing into the hearts and minds of customers. When that doesn't work a very natural thing to think is that the customers just don't get it. If you could just explain or if they were just smarter, then they would buy and we'd all be happy. And, by they way, you keep thinking in your head "how much money do I have left?" Time is ticking.
As Eric Ries says in The Lean Startup, “... there is no bigger destroyer of creative potential than the misguided decision to persevere.” Though there's no checklist or formula that will tell you when to pivot vs. keep going, plowing forward ignorant of insight that's suggesting a change of direction will land you in the unenviable position of disappointing results and no prospects or resources for improvement. Value destroyed, opportunity lost.
What's happening is the attributes that got you going and on your way may also be holding you back from finding a clearer path to market glory. How do you marry that steely-eyed killer determination with a strong dose of constant skepticism and paranoia in a way that makes you focused yet agile. One way is to turn that extreme focus onto finding out what the customer is really telling you. What are they saying, but more importantly, what are they doing? They may tell you it's the best idea ever and they love you. But are they regularly using your product in a way that supports strong unit economics? If not, why? Why, why, why? You have to keep asking and really get in their shoes to understand. Then, as The Lean Startup teaches, conduct real world experiments and measure results. Don't assume that the customer who's not adopting is an outlier and not really in your target market. That could be the case but then show me (show yourself!) a meaningful customer segment where customers are adopting, backed up by data. Now that may sound hard. But you wouldn't be where you are if you shied way from difficult situations. The longer you wait, though, the harder it will be.
A better way is to build "test and learn" into your operations. Ensure you have the mechanisms in place for detailed data analysis. Data that helps you truly understand performance at the level of granularity that's needed to figure out who you're selling to and what they're purchasing. For SaaS software, that's typically cohort analysis categorized by customer segments. I.e., what customers adopted at a particular stage and then broken down by characteristics that allow you to market to and serve them. Those are some of the nuts and bolts but what is equally important is that you have teammates and leadership who are willing to look at the data and insights objectively and are open to considering the three hard-truth paths: 1) stay the course; 2) close up shop (pretty drastic, but a real option); or 3) pivot. To be able to consider the pivot, the team must be open, receptive and actively pursue new, potentially very different possibilities. Last, they must be motivated to act on the data, as uncomfortable as it may be.
Get that formula in place - testing, data and right mindset that's open to possibilities - and you'll be in the company of others who pivoted their way to tremendous value creation like YouTube, Slack, Yelp and many others. Good luck!