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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?
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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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