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Lean Startup Chapter 8 - "Pivot"
What is a pivot, and when should you do it?
Key to the chapter
Deciding whether and when to pivot is the critical decision, and it takes courage
Chapter Summary
About Pivots
Pivoting is not a scientific decision, it’s a judgement call
However that judgement should be informed by data
Pivot faster is the key metric
Number of pivots left in runway
Reasons why pivots are hard
Easy to shave a false sense of security due to vanity metric
Unclear/vague hypotheses means the signal from the metrics is not clearcut
Scary. It feels like failure. It’s kind of a failure.
Votizen case case study
“Leap of faith” assumptions are funnel steps
Register -> Activate -> Retain -> Refer (Where was revenue?)
Register -> Activate -> Retain -> Refer -> Pay (platform for lobbyists etc.)
Register -> Activate -> Retain -> Refer - Pay (self-service transactional service)
Pivot or Persevere meeting
He recommends scheduling one periodically (1-2 months)
IMVU
Even though # of users and paying users were at records (vanity metrics)
Engine of growth metrics were not being met.
Diminishing returns would eventually peter out
Pivot is hard: To decide what to do about that
Discussion Questions
Is a pivot a ‘failure’?
Why did pivoting not hurt so much when we did it in these projects?
Why would they hurt a lot more for a company like Votizen?s
Types of Pivot - which kinds happened to you all?
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 much bigger market.
Customer need pivot: Market has strong needs, but the problem we are solving is not the biggest
Platform pivot: Go from a point product to a platform, or vice versa.
Business model pivot: from low cost high volume to high cost low volume
Value capture pivot: basic change in how the business is financed
Channel Pivot: Change in how you get product to customer. Change from a product to a service.
Technology Pivot: Change in core technology
Whats the point of enumerating all the kinds of pivot?
How is Votizen doing now?
What were their original set of four leaps of faith?
Register -> Activate -> Retain -> Refer
How would you measure the effectiveness of the MVP and the stages?
How does “cohort analysis” apply here?
How would this work for a hardware product?
What tuning did they do before they pivoted? What did they try?
Causes acquired Votizen. What do you think Votizen’s biggest asset was?
Do some classroom research
blog.causes.com—causes-acquires-votizen
http://blog.causes.com/2013/01/causes-acquires-votizen/?utm_source=blog&utm_medium=twitter&utm_campaign=tw0110
Was Votizen a success or not?
online.wsj.com—SB10001424052970203960804577242173304348722.html
http://online.wsj.com/article/SB10001424052970203960804577242173304348722.html
How many pivots can be done in remaining runway
What is “runway”?
Why does it matter?
Talk about Path
What was a key hypothesis?
How might they have judged whether they were succeeding or needed to pivot?
Talk about Wealthfront
What was the original leap of faith hypothesis?
Model portfolio “game” to discover talented money managers
Platform to let clients invest with those great money managers
How did it go?
Many signups, not many great managers
Pivot
What to pivot to is a very hard question
Informed by qualitative findings from all the research being done.
A platform for professional money managers
A tool to allow clients to evaluate who they wanted.
Even though signups were high (vanity metrics) the basic hypotheses were not being confirmed
IMVU
Do you see how they could have record numbers of new users and paying users and still not on a path to success?
Vanity metrics
Engine of growth
Change of markets
Decision to pivot here is very confusing
Even once you realize the problem
Not at all clear what to do about it/
Welcome
2018 Syllabus
Calendar of Lectures and homeworks
Resources
Lectures
Pilot Project
Welcome!
Lean Startup
Hypotheses
Working on Teams
MVP
Guest Lecture: Michael Skok
Pilot Project Conclusion
Term Project: Startup
Welcome to Term Projects!
Build Measure Learn
Project Planning
The Pivot
The Engine of Growth
Mockups & Prototypes
Testing Techniques
Term Project: Product
Product Market Fit
Jeffrey Beir: Metrics
Business Models
Pricing Models
Andy Payne: Startup Finance
Intellectual Property
Term Project: Business
Finance for Geeks
Founding a company
Real World Survival Kit
Management and Leadership
Dulcie Madden: Startup Teams
Last day converstation
Term Project
Term Project Outline
Minimum Viable Product Info
Hypotheses
Final Presentations
Background
Learning Goals
Grading
Teachers
Lexicon
Interesting links
Credits and acknowledgements