The Pivot (Tue Oct 15, lect 12) | previous | next | slides |

Logistics

• Quiz prep is next class, and quiz is the class after that
• Why has there been so little homework? Listen again to expecations on how teams work on the big deliverable.
• Stage1: Assignment: Term Project Stage 1 deliverable is due next class. You are expected to:
  • Have a product chosen and agreed upon
  • Have a team member assigned to each of the four papers
  • Have done some out of the building research
  • Note that I expect teams to be meeting at least 1-2 hours per week to work on the big deliverable.

Intro to Pivots

• What’s a Pivot? Why do we do a pivot?
• What are the signs that one should be contemplated?
• How is it different from just an adjustment based on a failed hypothesis?
• What’s a “leap of faith” hypothesis? Related to “product vision”
• When is it a pivot vs. a simple change to try to respond to feedback?
  • When it’s a change to a ‘core assumption’ ?
  • When it’s a change to a ‘article of faith’ assumption?
• Depending on the reason of the pivot, you will consider ways in which to change plans

A picture is worth a thousand words

Iterations vs. Pivots

• Iterations are smaller, incremental changes based on feedback and learning
• These are part of the normal “Build-Measure-Learn” feedback loop that Ries describes.
• Pivots are more significant changes that alter the fundamental hypothesis about the product, strategy, or growth engine.

Matter of Degree

• Minor product tweaks, feature adjustments, or small changes in targeting are typically considered iterations, not pivots.
• A pivot involves a more substantial shift in the business model, product direction, or core strategy.

Examples to Illustrate

• Iteration: Changing the color of a button based on A/B testing results.
• Pivot: Realizing your photo-sharing app is more valuable as a messaging platform (like Instagram’s shift towards Stories and direct messaging).

Ries’s Perspective:

• Ries emphasizes that pivots are major changes that arise from validated learning. They’re not just random ideas or minor adjustments.
• He sees pivots as a way to “zoom out” from day-to-day iteration to reassess the overall direction.

Frequency

• Iterations happen frequently, often daily or weekly.
• Pivots are less common, occurring when a startup realizes its current path isn’t leading to sustainable growth.

Decision-Making

• Iterations are often decided at the team or product management level.
• Pivots usually involve higher-level strategic decisions, often requiring buy-in from founders or executives.

Categories of Pivot

• Zoom in pivot - Subset of product is what matters
• Zoom out pivot - Product is too narrow - generalize it
• Customer Segment pivot - Product solves a real problem, but there’s a different market that needs it more
• Customer need pivot - Market we are looking at has very strong needs, but the problem we are solving is not the biggest need
• Platform pivot - Go from point product to a platform or vice versa
• Technology pivot - Change core technology
• Channel pivot - Change how you get the product to the customer, or change from a product to a service
• Value Capture pivot - A basic change in the business model or how the business is financed.

• Lean Startup Chapter 8: Pivot

Measuring effect of changes

• The crux of pivoting is having metrics on which to base the decision
• These are not arbitrary or generic
• They are specific to your product or service
• And they will figure directly into your eventual business model

Funnel

• The “funnel” for your business incorporates the stages in the users engagement
• Look at the AARRR stages. You may tweak them as appropriate for your project.
• The key to look for is whether you can collect metrics of the number of people at a stage
• Here is a broad range of examples 1. Request information about the courses offered 1. Respond to a survey asking for contact information 1. Attend an info session 1. Sign up for a first course 1. Complete the course and take the final exam 1. Sign up for an additional course 1. Send a discount coupon to a friend

Why do we care about the Stages?

• Metrics and actionable metrics
• You also need a way to measure how many people make it to each step
• Without metrics your pivots are a shot in the dark
• Once you have a baseline
• Do the pivot
• Quickly determine if you improved where you expected to improved

Pivots before the product can be tested and measured

• If key hypotheses prove incorrect, consider pivoting
• How is a pivot different from any other change?
• It’s when something basic about the product itself is changed
• When a hypothesis fails to pan out, it might not change something essential
• The “cheaper” (quicker) you recognize the weakness of your approach the better
• It’s a balance between creatively responding to the feedback … or deciding that it’s time to pivot

In class discussion - Objective

• Make these concepts clearer by discussing and applying them with your team
• Peer feedback: Get feedback and new ideas from outside your team

Questions to consider

1. Summarize again what your product or business is. What pain is it solving and how. Who is your customer?
2. Discuss and identify the stages of your funnel and the one that is the most critical to your success.
3. Discuss and identify a pivot that you could easily see being required and why
4. Discuss and identify a way that you would be able to test whether that pivot would be required

Padlet

• Make notes about these questions and any other outcomes on this Padlet. First column is an example.
• Start by changing the name of your column to your product name (or add a column if they are all full)
• Discuss these questions and others with your teammates (20 minutes or so)
• Pair up with another team and look at their Padlet and give them feedback (10 minutes or so)

Thank you. Questions?  (random Image from picsum.photos)