Pivot and how we adapt our products and not our customers

When you hear “pivot”, you immediately think of spreadsheets, but it’s so much more. Pivot is the perfect tool to connect customers and products on the same level and illustrate the relation. Simply put, a contrast of hypothesis and reality.

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If you’ve often worked with spreadsheet software such as Excel to acquire data and later analyze it in detail, you’ve certainly heard of the term “pivot”. However, pivot is so much more than just a tool to better analyze data in spreadsheets. Pivot is borrowed from French and means “linchpin”. Who of us hasn’t heard or used the term themselves? Or sometimes the phrase “you are the linchpin of…” But what has this to do with our startup? Sure, we make spreadsheets all the time (even though they are often not really beneficial and the one or other spreadsheet wasn’t worth the effort), but why don’t we adapt this to our product or our customers? Or even better: why don’t we use pivot to bring our customers, sales and product together?

Now it’s getting exciting! When sales isn’t doing too great sales itself can be responsible - but that’s often not really the case. The product is often too expensive, not enough customers were approached, the target group wasn’t reached, features are missing, the product is too complicated...I’ll stop here before my frustration tolerance rises :) . But how can we recognize it and when is it best to use pivot? To that end, here’s a perfect question:

What do you do, when your hypotheses don’t meet reality?

Especially in startups, this is not uncommon and happens more frequently than we, the CEOs, want to admit. We scold sales, marketing, the developers...a culprit is found easily. But the fact of the matter is that it’s often our own business model that isn’t working. So we don’t we just fire that one? You can’t? Sure you can! And so we directly ask the next important question:

What’s a pivot anyway?

A pivot is a substantial change to one or more business model components. Throughout alugha’s “formation” we did this several times. With seven accounts, our pricing was rather confusing in the beginning. Even after the first and second consolidation phase, it still wasn’t attractive to customers since we packed it with things that weren’t relevant and for which we had to charge too much to cover the risk. In addition, the gaps between the different accounts were too extreme. Also we always had (and still do) a roadmap for the feature set, but we’ve learned that we have to be very flexible as far as realization and implementation is concerned. Regarding advertising, we were and still are testing what really suits us in the end. An iteration (a minor change here and there) makes a lot of sense and you always have the option to approach something cautiously while a pivot is a substantial change such as the change from a free account to a subscription. But be careful! If you don’t have a virtual monopoly like Adobe - and suddenly don’t allow people to buy the software anymore but instead force them to pay a monthly subscription fee - then it can backfire pretty quickly.

So how can you be more successful with pivot? Consistency and continuously taking action are essential. Pivots should be closely monitored and your actions should be adapted accordingly. If you can create a rhythm and incorporate the relevant key resources, you can adapt to the developments more quickly and grow and compete on the market.

 

This article is written by our CEO, Bernd Korz. With his experience as an entrepreneur, he shares his vision about the lessons provided by Steve Blank. Join us every week for a new article on Steve Blank’s lectures.

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