Few startups start with ideas that turn into major successes right from the beginning. For most startups, at some point your company will need to change its course of action and correct its original idea, pitch, product or execution. There are several signs an entrepreneur can look for—such as performance metrics, market feedback, or the general mood at the office—which can help to determine if the company should continue in its original direction or try something new.
“Ideas are cheap but execution is hard,” says Scott Jacobson, managing director of Madrona Venture Group in Seattle. “As you hear market feedback, listen to customers and see how they experience your product, it’s not uncommon to have to consider the fact that you may not have nailed it on the first go, and be open-minded to a pivot.”
How do you know it is time? As part of the two part series of articles, the following are three of the six indicators that a pivot might be wise.
One piece works better than the whole
It is important to step back and see the real reason for the success of your business. As an example, StyleZen, a shopping site launched in 2011, was struggling to expand its user base. They could not figure out why they were spending so much to grow, so they started to experiment by creating in-house tool using Pinterest to increase followers and traffic. Before they knew, they had their “aha” moment. StyleZen was shut down and the team decided to pivot into new role: using technologies to help business leverage Pinterest as a marketing vehicle. What StyleZen did was recognizing the distinction by applying the bigger picture.
You misjudged the market
Many startups forge ahead believing the market is eager for whatever solution they are about to introduce, only to find that the target audience is not interested after all. It is not about finding the right users, it is about value proposition not generating sufficient interest for most to give it a try.
As an example, if your company offers some free-to-paid services and you find conversion rate from trial to purchase is low, it is a clear sign that your product or service is a “nice to have” option for consumers, as opposed to “need to have.” That might be a sign to pivot the product and find where it can best address a pain point that’s more compelling than the one currently being solved.
You’re missing industry standards
It’s important to know whether the sales cycle for your target customer is four to six months, or whether sales typically come in the form of a quick yes or no. If you find you are not getting the due results in that time frame, it is a pretty good red flag that you are outside the norm of the industry. After this happens for more than once or twice, you have to realize there is a problem and it needs to change.
For more, please visit: http://www.entrepreneur.com/article/229410
Thanks for reading, and until next time… stay WISE!