Ed Ipser gave a great mini-workshop on Pivots and Turnarounds at a recent Lean Culture Online Event. Here is a summary.
Ed Ipser on Pivots and Turnarounds
Instagram didn’t start out as Instagram. It started out as Burbn, an iPhone app for sharing bourbon lovers to socialize and share photos of their bourbon. But when the app failed to get the traction that the founders wanted they made a crucial pivot to focus on their photo sharing features. And the rest is history.
Every failed business is a failure to pivot or turnaround while it still had time and resources to do so.
Your biggest opportunity lies on the other side of your fears
“Everybody wants to put on a happy face and not discourage others or even themselves because it’s really frustrating to recognize that you need to change. But your biggest possibilities lie on the other side of your fears.”
Lean Canvas as a Brainstorming Tool
When you realize you’ve got problems, when you get these fears in the pit of your stomach, that’s when you think we need to make a change here. Having these plans written down in your canvas as alternatives and possibilities gives you the confidence to move forward.
Pivots & Investor Commitments
Sean Murphy & Ed Ipser talk about investor commitments and pivots.
Pivots and Turnarounds – full presentation by Ed Ipser
Links to the exercises
More About the Speaker
Edward A. Ipser, Jr., PhD is President of IpserLab, LLC, a startup foundry and Managing Partner at Coactify, a creative pivot and turnaround consultancy. He has founded, cofounded, joined, and advised many startups. As founder of MarketFusion he raised $23M in venture capital. He also founded SVASE (Silicon Valley Association of Software Entrepreneurs) in 1996 which became the premier Silicon Valley entrepreneurial organization before merging into SVForum. He received a PhD in Computer Science from USC.
I think Ed’s workshop offers a valuable approach for three crucial aspects of determining if and when to pivot:
- Confronting Your Fears forces you to make an explicit model or set of predictions about the future.
I resisted this initially but now believe that offers a helpful method to capture your unstated assumptions and unexamined premises, similar to Samula Mescher’s “Invite Your Fear to Tea.” This exercise could also be extended to include Premortems and drafting Decision Records.
- Lean Canvas offers a template for making an explicit model for the current “system of the business.”
I don’t think that all of the boxes in the Lean Canvas are created equal when it comes to impact on the business model: Problem, Solution, and Customer are clearly more important. But it still gives you a framework to track changes. A directed graph model like the Disney business model map (see this HBR article https://hbr.org/2013/05/what-makes-a-good-corporate-st for an example) may prove more flexible.
- The Business Inventory offers a clear picture of assets, liabilities, and obligations that includes financial items and commitments to partners and customers.
SKMurphy has been talking about financial, intellectual, and social assets coupled with traction since a 2007 talk on startups Technology Ventures. Ed explicitly builds on an approach we documented in “Working Capital: It Takes More than Money” to propose a richer model with better utility. Casting it as a “balance sheet” that includes assets and commitments, and obligations (in particular tracking commitments to customers and partners) is a clear improvement.
I think Ed has advanced the state of the art for analyzing when and where to change your startup’s approach to the market.