Entrepreneurs: 4 Keys to a Successful Company Pivot, Thoughts, Ideas
Starting a company is very easy.
Being successful is the extraordinary difficult challenge.
Many businesses fail for various factors but lack of financial resources is usually the main reason.
Entrepreneurs love using this witty catchphrase for the reason for failure ‘needed a longer runaway to launch with a reduction of my burn rate’. Really? Some of these people had burned through millions of dollars. The fact is that an overwhelming amount of VC funded companies fail all the time.
While you are building the next big thing, keep in mind that 80% of the time your company future success will be a product/service that is a variation of your initial plans.
There have been many super successful Pivot examples including Twitter, Paypal, Groupon, Instagram, Pinterest and even Starbucks. There are thousands of other examples which demonstrate how important it is for the entrepreneur to recognize when it is the right time to pivot.
Obviously, when your company bank account is almost empty is not the right time to have an epiphany to change your entire product and strategy. It is much too late and desperation is usually etched in your face when you are trying to raise or beg for additional capital.
How do you know when it is Pivot Time?
–Listen to your Customers (if you have any.). Your target marketplace is filled with smart and experienced people willing to share their opinions and thoughts about your product/service. Ask them lots of questions and write down all of their ideas.Every week, review the list with your management team/advisors and see if there are features or functions which can positively impact your future success.
–Monitor your bank balance. As I said before, always keep one eye on your cash and another on your revenue forecast.If you realize that you aren’t closing any deals and will be out of cash in 3 months or less, it is time to stop everything immediately. Yes, stop and spend quality quiet time deciding if you are chasing the right market with the wrong product or the wrong market with the right product.
–Network and Read Everything. Go out and talk to prospects, competitors, industry experts, mentors – everyone who you think can provide feedback for your existing business model.It is impossible to have a successful pivot in a bubble by yourself.Read books, trade magazines, blogs, and other resources which cover your target industry.The great news is that all the answers you require for a successful pivot can easily be found when listening and reading.
–Be Open to Change. Pivots work for companies when the founder is willing to listen and be flexible.The irony is that successful entrepreneurs are perceived to be hard driving and stubborn which is why they ultimately achieve their goals.When something isn’t working, then you must do something different and see if it produces the desired outcome.Ultimately revenue becomes your key gauge.
Being an entrepreneur requires you to be the ‘jack of all trades’ and the person who is perceived to have all the answers.The reality is you must be the leader, guide your team, and be open and flexible when alternative opportunities for a Pivot present themselves to you.