As any entrepreneur knows, starting a business takes guts. The guts to quit whatever you were doing before and plough all your time, money and energy into building something new, with the hope – no, the belief - that you've hit on the next big thing. That your idea will solve a fundamental problem for human-kind!
This leap into the unknown can be even greater for tech entrepreneurs, often working with a completely original concept or a new type of technology, and with just a hunch that it is something that the target audience will want to use.
So after all those hours of toil, those sleepless nights and spending the hard earned cash of you and your investors, what if it doesn't work out? The customers don't show. Or if they do, they go away again?
In this situation, one solution that smart companies often rely on is 'the pivot'. That is, if the customers aren't enamoured with what you're offering, how can you change your business model so that they are?
Famous pivots of history include Avon, which was started by a door-to-door book salesman, who gave away free perfume samples to his housewife customers. Realising these were more popular than the books, he went into cosmetics.
Or Wrigleys chewing gum, which - believe it or not - started as a soap manufacturer that gave away chewing gum with its products. Let's just say, they don't sell soap anymore!
But if starting a business takes guts, then pivoting takes even more.
You have to have the awareness to notice the problem in the first place. Then own up to the problem. Then throw your whole business plan and all your hours of toil in the bin. Doesn't sound so easy does it?
So if you ever find yourself in this predicament, here's a few words of advice for surviving and thriving through the pivoting process:
Trust your instinct
If it doesn't feel right, then it probably isn't. Experienced entrepreneurs always talk about the importance of their business instinct, and this is something that will serve you well if you're considering a pivot. If, despite all your best efforts, the customers aren't interested in your current product or service, then trust your gut and re-evaluate your business plan.
Consult some big business brains
If your gut is telling you something, but you're not sure what, then ask the advice of somebody with more business experience and an external perspective, whether it's a mentor, experienced investor or fellow entrepreneur. Sometimes you can simply be too close to something to see it clearly.
It goes without saying that a pivot shouldn't be completely random. Getting it right means looking at all the aspects of what your business does and analysing what could be used to provide a slightly different product or service. For example, can you use your expertise and assets to solve a different problem for the same audience? Or the same problem but for a different audience? Consider all the options before deciding where you have the greatest opportunity and credibility to take on the market.
Test it out – and measure!
Before taking the plunge, test your concept or prototype out with a sample of your current or potential clients, gauging feedback and the potential of the market. Set yourself a timescale to gain some traction and if it doesn't show potential, move on. If it does, invest in making it a long-term success, making sure you're constantly measuring and adjusting as you go along.
Once you've hit upon a promising option, you need to commit – and quickly. Dilly dallying will only lose the confidence of your staff and investors, while simultaneously confusing your consumers. Plus, if you're taking advantage of a change in the market conditions, you'll need to strike before it's too late.
Smooth talk your staff and investors
Successfully articulating your new direction to your key stakeholders is essential to ensure they're bought into the change early-on. That means developing a convincing and inspiring pitch outlining the new plan, while acknowledging the importance of the hard work so far. Remember, both your staff and investors chose to back you based on your original idea, so the change could come as a shock. It's important to get them on side and, for those who aren't convinced, it might be better to part ways.
Remember, the customer comes first
Last but not least, if you're ever feeling nostalgic about your original idea, remember what your business is there for – to serve your customers! If they don't like it, it's not doing its job. So listen to their feedback, observe how they behave and, more often than not, this will give you vital clues as to the best way forward.
You may also be interested in:
We've made buying insurance simple. Get started.
- 12 August 20201 minute read
How do small business loans work? What small business loans are available, and how to get one for your business
Looking for a small business loan? We explore the types of small business loan available, who can apply for one, and how they work.