Pivoting when Using Lean Startup for Product Development
The lean startup approach expects that you are able to decide whether to persevere or pivot during product development. The build-measure-learn loop help startups to get quick feedback from customers and learn about their needs, which support pivoting decisions. In the lean startup principles, Eric Ries describes the purpose of pivoting in product development:
When this process of measuring and learning is done correctly, it will be clear that a company is either moving the drivers of the business model or not. If not, it is a sign that it is time to pivot or make a structural course correction to test a new fundamental hypothesis about the product, strategy and engine of growth.
There are different types of pivots possible in lean startup, each with their own purpose and ways to use them. Let’s explore some of them to see when and how you can pivot? Or maybe have to decide that it’s better to quit?
The blog post vision pivots vs. discovery pivots by Marty Cagan describes two kinds of pivots. He describes the product vision as “the big picture of what you are trying to achieve, typically over a 2-5 year timeframe”. Pivoting on the product vision should not be done too early:
In a nutshell, the job of the product organization is to make that vision a reality. So we don't work for a few weeks or even a few months and then just declare it's not happening and we should do a pivot. We will typically work hard for many months on a product vision and not even entertain the possibility of giving up.
Discovery as Marty describes is looking for features or approaches to develop a product that realizes the vision. He suggest to be flexible and prepared to pivot on discovery:
(…) during product discovery we will need to try out a great many ideas. We expect that many of these ideas won't work, and the ones that do will require several iterations. So it's critical in product discovery that we not be wedded to particular solutions or features or approaches.
This is why it's so essential that a product team be strong at product discovery. Product discovery is how we get as many iterations towards our vision as possible. Our objective of course is to get to product/market fit before we run out of money (or management runs out of patience). And being good at product discovery means being very open to the many forms of discovery pivots.
Brian Millar describes what large companies can do to become more innovative, in the article 5 ways big companies can pivot like lean startup on Co.Design (published by FastCompany). He states that “Pivoting means that new technologies don’t get wasted. They get repurposed”. Brian describes how you can use a pivot workshop as a way to do pivoting on technology:
The innovation team brings along the technologies they’re working on plus any side projects or shiny things that have caught their interest. The insight people bring along as many consumer needs as they can. The next bit is simple. Match the technologies to the needs. (…) If a technology matches a need that it’s not currently serving, then you have an opportunity to pivot--if the opportunity is big enough.
In the article everyone pivots on LinkedIn, Andy Rachleff talks about pivoting on markets. He suggests that starting with a product and finding a market can be a successful approach for companies. Andy describes why pivoting on markets is important to find the market for your product:
The challenge lies in is figuring out who cares about your incredible new product. Rarely do companies get it right the first time and it often takes years before they do … if they ever do.
Enterprise-focused startups typically need to run trials with potential customers to prove the value of their products. If you pull the trial after 30 days and the majority of prospects don’t flinch, then you don’t have a compelling product/market fit. Therefore, you need to pivot.
Sometimes it can better for a startup to quit, as Ben Yoskovitz describes in when is it time to pivot or quit? He gives several suggestions on dealing with pivoting, and when and how to decide to pivot or quit.
Pivoting is only possible when it is properly done within the build-measure-learn feedback loop in lean startup, as Ben explains:
To pivot, you need to have learned something through your previous efforts that gives you clues as to where you should focus. You can’t pivot without some form of validated learning and new assumptions. If you don’t have new insight that gives you even a hint of a direction, you need to really question whether it’s worth continuing. Pivoting for the sake of pivoting isn’t the answer (although you can get lucky…)
When you need to pivot, it can be good to check your passion:
I’ve met quite a few people (it’s happened to me too) that get so lost in what they’re doing, and they invest so much into it, that they actually forget why they got into the business in the first place. So as you investigate the potential of a pivot, you have to ask yourself, “Why am I even going to do this? Will I be passionate about this new thing?” If the answer is yes, you pivot. If the answer is no, you stop.
Ben explains how entrepreneurs are driven by guts, and how you can take that into account when deciding to pivot or quit:
If you get to the point where you don’t know what to experiment on anymore, and you’ve lost your purpose (in terms of why you started the business in the first place), you need to seriously look at shutting it down. If you don’t know what to do anymore, pragmatically, but you’ve still got a fire in your belly for what you set out to do, take a break and look for a restart.
Pivoting can also help a company that has been in a “sleeping mode” to revive, as Vincenzo Pallotta describes in reviving a zombie company: can lean startup help?:
(…) if your business is stagnating, you need a shake! The pivot might (and probably should) [be] very radical. You have probably a core technology or competence that has not found a compelling problem to solve and you don’t have customers. Therefore, start looking again for problems. Even if you are very biased by the technology you have, you might discover a new applicability of it to a completely different problem (and sometimes even with minimal adaptation).
Reviving can be considered as a restart of the company, or a new attempt on a product idea, where you can use practices from the the lean startup:
It goes without saying that your pivot will entail an entire rethinking of your Business Model. So, define your new hypotheses and setup the right experimental framework to validate them.
Todd Montgomery Dec 19, 2014