Q: How Do I Plan for Pivots or Even Shutting Down My Startup?

By | 2018-09-14T00:42:25+00:00 September 13th, 2018|3 Early Customer Stage, MVP, skmurphy|0 Comments

It’s useful to explore several paths in parallel and have a default list of pivots ready of your first few efforts don’t bear fruit.

Q: How Do I Plan for Pivots or Even Shutting Down My Startup?

This is the sign you have been looking for: pivots are not always this clear.Q: I am trying to look a few steps ahead of where we are today, so this is a hypothetical question but I wanted to get your perspective. What do we do if we have an MVP that has a user base of early adopters but they are not paying enough to warrant persevering.

The most common outcome is that no one is paying you–although some or many may be using your product.

The next most common is that some are paying you. This is early success. I would be very slow to abandon a core set of users, especially if they have common characteristics and represent a potential niche. The grass is always greener in the unexplored market and most never work out. Abstract and theoretical questions are hard to address usefully–your mileage may vary.

Q: If we conclude that a pivot is in order to a new target customer user group, how do we discontinue servicing the (few but paying) current users?

Don’t. Think like Tarzan (h/t Derek Sivers) don’t let go of a vine that is even somewhat supportive before you are sure the new vine is better. Make sure you have more paying customers along your new line of advance

Q: It seems almost unethical to ignore their needs going forward. But if we don’t we have to divide our attention between the new version of product and the old which could be untenable. How do you resolve this?

This is real life. Your attention is always split in multiple directions. If your team would like someone to manage your intake for you and make your priorities clear at all times then you are not looking for customers you are looking for a job with a boss.

Q: How we do make clear to customers the possibility we may pivot or change or service significantly in the future?

Make bounded commitments. If you sign a customer for a one year subscription, have a plan to support them for a year and outline what data in what formats they can download at any time from your service if they decide to leave. Negotiate your commitments for the “divorce” at the “marriage.”

You can learn a lot from books and it’s useful to plan ahead and consider a wide range of possibilities with the goal of improving your current approach. But you have to be careful not to get lost in “ThoughtLand.” You have to make bona fide offers to prospects that you intend to honor–they can be bounded but that’s fine as long as you are committed to providing value to people who have given you their money. The essence of entrepreneurship is an exchange of value (“quid pro quo”) and there are no easy paths to a viable business.

“Man in Black: Life is pain, Highness. Anyone who says differently is selling something.”
William Goldman “The Princes Bride”

Getting a startup off the ground is much closer to learning how to ride a bike than mastering algebra. There are real limits to Gedankenexperiments (“thought experiments”) for anticipating or preventing problems. Better to start small and scale slowly because often “more is different.”

I blogged about planning and reorganization as fostering “The illusion of progress,” making the following key point about how startups develop a viable product:

A viable product is rarely like a work of art, the pure result of personal insight and expression. Instead it flows from conversation and negotiation and feedback from prospects and customers.

In “Overnight Success” I noted that math and chess and go are idealized domains.

But many insights in life cannot be reduced to writing, especially those involving either self-mastery or other people (and startups, alas, involve both). Reading the history of an event does not compare with living through it. You cannot learn to ride a bike from a book (or a workshop). Patient experimentation, deliberate practice, and not only rehearsal and pre-mortem but also after action and decision record reviews are all needed.

The challenge with a startup–like many other things in life–is that you need to integrate many different inputs, your own hopes and fears among them, and negotiate a working consensus with your co-founders to be successful.

In particular, the ability to manage your own hope and fears and maintain team morale are critical to success

“To learn anything other than the stuff you find in books, you need to be able to experiment, to make mistakes, to accept feedback, and to try again. It doesn’t matter whether you are learning to ride a bike or starting a new career, the cycle of experiment, feedback, and new experiment is always there. But you won’t risk mistakes if you think you will be punished. You have to be sure of forgiveness if it is a genuine mistake. You won’t accept criticism or negative feedback either, unless you are sure it comes from someone you respect, someone that you know has your interests at heart.”

Charles Handy in “The Hungry Spirit

I hope this elaboration is helpful, it’s not that abstract questions are without value, it’s that most of the real challenge comes in the particular context.

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Photo Credit: Austin ChanThis is the Sign You Are Looking For.”

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