The Pivot (Thu Oct 12, lecture 11)

Homework due for today

Legend: : Participation | : Early | : PDF | : Portfolio | : Zipped

  1. Read: “The Lean Startup”, Chapter 8. This chapter is about pivoting (or not!) Please answer the following warmup questions:
    • Often the term “runway” is used in startup financing to refer to how many months there are to go before the money runs out. Eric Ries says “A startup’s runway is the number of pivots it can still make.” What is he trying to get at? Is there a real difference in his statement? What is he reminding us of?
    • If several of your hypotheses are invalidated through experiments, does that mean that you have to Pivot? Explain.
    • It’s been said (by me among others) that an MVP is neither minimum, viable nor a product. Can you explain why that might be a valid statement, or not?
    • What 1 or 2 important things from the reading did you not understand? And if you understood it all, then what 1 or 2 important things were most insightful/useful/valuable to you. Please make sure I can tell which is which!
    • Deliverable: Submit your answers to these questions in a pdf to latte .
  2. Teams: Continue working together and independently on your product in weekly iterations. Review Term Project Outline for suggestions. You are working on Stage 1, deliverables due on Oct 24.

Interesting but not required reading

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

Illustration

Measuring effect of a pivot

  • The crux of pivoting is having metrics on which to base the decision
  • Identify the key ‘milestones’ or ‘stages’ in users’ interaction with the product
  • Example:
    • Registration (sign up)
    • Activation (log into account, verify user is registered voter, etc.)
    • Particpation (add content, write a review, etc.)
    • Retention (log in a second, third, etc. time)
    • Referral (invite friend, recruit your network, etc
Discussion: What would stages be for our product?

Stages

  • These are not arbitrary!! they figure directly into your eventual business model
  • depending on your goals and your stage they will be different
    • How many people responded to your email
    • answered your survey
    • answered a question
    • asked a question
    • etc.
  • This becomes a classic “funnel” (sales, marketing etc.)
  • Discussion: why do you think we call it a funnel?

  • Metrics… Metrics… 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

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.
Discussion: Describe each one and give an example. Are these all the kinds that exist?

Next Class