Persevere or Pivot4:16 with Pasan Premaratne
Based on the feedback we get from our experiments, we need to decide whether we should persevere or pivot. In this video we look at what pivoting is and when should our business pivot?
Following this method, I set out to validate my assumptions. 0:00 If you remember, we discussed that we need to test our riskiest assumptions first. 0:04 My entire idea hinges on 2 main assumptions. 0:09 First, the market assumption that there are small businesses out there and 0:13 other organizations out there that need collaboration software. 0:17 And second the hypothesis that these customers have a problem. 0:21 That there isn't any software that currently fills their needs. 0:24 I went out and talked to lots and lots of small business owners, 0:29 community organizations, non-profits, and various other types of institutions. 0:32 The results I learned were interesting. 0:37 My market assumptions were definitely validated. 0:39 Collaboration software amongst small teams is crucial, so that's good. 0:42 Unfortunately, my assumptions about the problem were totally wrong. 0:47 Even though, I felt that the tools were overly complex, for 0:51 my use case, not a single organization felt that way at all. 0:54 They were perfectly happy with the tools they had at their disposal. 0:58 Now sometimes, customers don't always think they have a problem or 1:02 that the problem could be solved in a better fashion. 1:06 For example, when Dropbox first launched there was a lot of 1:09 scepticism because people thought that file storage and syncing weren't an issue. 1:12 Dropbox's elegant solution convinced them otherwise. 1:17 Sadly, in my situation, that really wasn't the case. 1:21 Existing software did cover pretty much all the bases. 1:25 On the bright side, this is a good thing, 1:28 by testing these risky assumptions early on and finding out that I was wrong. 1:30 I saved myself a lot of time and money. 1:35 Imagine the frustration and failure of having spent months working on 1:37 the product first, only to find out that people don't really care for it. 1:41 Unfortunately, that's what most companies do. 1:46 Avoid this at all costs by testing assumptions first and 1:48 then building once validated. 1:52 Now, what do we do at this point? 1:55 We could quit, and that's not such a bad option. 1:56 We haven't invested much time or 1:59 money, and not all ideas are meant to succeed, but we're not quitters. 2:01 We have another option, 2:06 however from our experiments, we gained some valuable insights. 2:07 If our experiments had validated our assumptions, we could keep going. 2:11 We could persevere. 2:15 In this case, however, 2:17 we learn some important information from our experiments, that allows us to pivot. 2:18 A pivot is essentially a major change to your business model, 2:23 that is designed to test a new set of hypothesis and assumptions. 2:27 In our case, our earlier hypothesis failed our tests, but 2:32 we can pivot and keep going. 2:35 With each pivot, you're essentially discarding your business model and 2:37 starting fresh. 2:41 You have a new business idea that you need to explore using the canvas and 2:42 a new set of assumptions that you need to validate. 2:46 But you don't simply pivot on any new idea for the sake of 2:48 pivoting just like any other iteration of build, measure, learn feedback loop. 2:52 You use the information, 2:58 gained from the validated learning to undertake new strategy. 2:59 In talking to different groups, I gained some important insights. 3:04 While small businesses were happy with the tools they had at their disposal, 3:08 schools and especially teachers were extremely unhappy at the state of affairs. 3:12 There was no good software that fit their needs perfectly. 3:17 Teachers wanted the ability to keep track of their students. 3:20 Assign them tasks. 3:23 And collaborate with them. 3:24 Principals of the school, on the other hand, wanted detailed reports on their 3:26 teachers, and high level information about classrooms and students. 3:30 The existing tools failed to accomplish all this really well. 3:34 So now, I'm realigning my goals. 3:38 I'm pivoting to focus on project management software for teachers and 3:40 school principals rather than going after small to medium sized businesses. 3:44 Had I non-validated my assumptions prior to building my product, 3:48 not only would I have failed, I would have never uncovered this opportunity. 3:53 Because I'm pivoting, and starting with a completely new idea, 3:58 I'm going to start with a fresh business model. 4:02 We're not going to do that together since you know how it works. 4:05 But keep in mind, that if you undertake such a radical change in strategy, 4:08 you should go back and make the necessary changes to your business model. 4:12
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