Everyone hits a ceiling, whether you are a scrappy online startup, aggressive small business or the star ship intellicorp (in the latter case – no idea why you’re here…bienvenue!).
At the point of pivot, you lose traction. Maybe you’re not getting funded, or revenue projections are looking like Mt. Everest to a mouse.
How do you know when a business model needs to pivot?
The fact of the matter is… Many startups give up way too early in the game.
With a vast percentage of success cases being one part timing, two parts product-market fit with a given niche or market, you can and should stay the course almost twice as long as your fear begins to strike.
With search engines coming and going like hotel reservations – an average shelf life of 2 years – search engine innovator Duck Duck Go was able to rise above early entry with a model ahead of the game.
DuckDuckGo is still rolling well into seven years. Its core differentiator (or “so what?” in corp speak)? Privacy. They do not track users. At all.
Until the NSA leaks of 2013, no one cared about privacy – most people didn’t even know it was a thing. The company’s traction skyrocketed in 2013, even with steady growth since 2009 already keeping the Sharks at bay.
The key takeaway here is to wrap your head around this timeframe. If you’re a sexy new startup or a kid with a dream, are you ready to do this for the next seven to ten years of your life?
On the other hand, you have the mass of startup founders who feel they picked a business model or company idea too quickly.
As the economy takes role of house at a casino and losers multiply, the idea of picking something you’re more passionate about could hit you like a freight train when thinking in terms of the long haul. But they’re often wrong as well.
It takes belief, not passion, to build a startup business that scales.
So you’re considering a pivot … what’s the metric to weigh into – and better inform – your decision?
Product engagement – plain and simple.
Even at a level of just a few dedicated, die-hard customers.
If you have this, you’re quitting too soon. Expand what’s working and kill what isn’t. This is business.
Why do these customers take to your product so well?
Is there a common thread uniting them?
Are these early adopters in a big market or outliers?
The answers to those three questions may open the door to opportunity – revealing a promise not immediately visible in your core business metrics.
Another Factor to Ponder Before you Pivot …
As a niche of their own, today’s startup founders are almost entirely composed of forward-thinking creative-analytical hybrids, who as a result of their own gift are often too early to a market or niche (note the 7-10 year rule’s importance).
While there is a big difference in a few months or years too early and a decade too early – almost no one can stick around for ten years with so-so performance results.
But what if being a year or two early just so happens to occasionally be a great problem to have? Why?
You can use the time when you’re early to market entry to optimize your product for its niche audience. Just as the market takes off, you’ll have an immediate candidate for market leader.
Don’t fall into the product trap – The Bullseye Framework, coupled with a product development methodology like the Lean Startup model, can work together to maximize your probability of startup business success.