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The 3 Step Pivot Framework: How to Turn Failure into Success

Last month I got an email from a friend. After 6 months of hustle, she’s throwing in the towel. Why?

  • Not enough sales.
  • No traction.
  • No growth.

I felt bad. I hate seeing people fail. I hate it even more when a project fails that hasn’t  been properly tested in the marketplace. In my friends case, she had only tried one option. It didn’t work. Surely there’s a better way…

Only the Strong Agile Survive

Granted, not all projects are worthwhile. Some simply aren’t economically viable.

Others might be able to sustain themselves through whatever means (force, trust fund, etc.), but to what end (the excruciatingly slow death of the postal service comes to mind)?

But the reality is: you can’t know whether a project is worthwhile from the first failure (not if you want to eventually build something that lasts) So I told my friend that she shouldn’t shut down just yet. Instead, she should pivot.

The Lean Startup Pivot

What’s a pivot? Taken from Eric Ries’ book The Lean Startup, a pivot is a:

structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.

Good, but a little technical. Here’s how Steve Blank describes it:

“Pivoting” is when you change a fundamental part of the business model. It can be as simple as recognizing that your product was priced incorrectly. It can be more complex if you find the your target customer or users need to change or the feature set is wrong or you need to “repackage” a monolithic product into a family of products or you chose the wrong sales channel or your customer acquisition programs were ineffective.

In simpler terms (hopefully without missing the point): A pivot is adjusting your current approach to a problem.

Download The Essential Pivot Checklist and Workbook when you’re ready to pivot your business

Sometimes it’s a complete overhaul, identifying a new “job to be done” (the pain point you’re solving for people), sometimes in an entirely new industry or via a different medium.

Other times, it’s not so dramatic – just a simple shift in execution. Every successful company in the world has pivoted at some point in their lifecycle. It’s inevitable.

Pivoting in business.

How do I Pivot?

After I told my friend she should pivot, she asked a reasonable question: How? My friend wanted me to tell her what to do in her particular situation.

Here’s the problem: By its nature, pivoting is a creator-led process. It requires the owner / operator to think, engage, challenge, test, break and build. Nobody can tell you how to pivot, nor can someone do it for you. So, instead of telling her what to do, I suggested some resources that could provide a framework for her to approach the problem.

At the same time, I realized that most people have no idea what a pivot is or how to go about pivoting in their business. While books like The Innovator’s Solution, Running Lean, 4 Steps to Epiphany and many others have covered pivoting in some way, these are very technical books and focus on the tech startup community primarily.

That sucks because everyone should know how to pivot (in business and life). So here’s my attempt at breaking down a pivot for the less tech savvy people of the world (me). This is the framework and the mindset I use to approach everything (from the books I publish to the products I launch).

I’m no expert, but I hope my thoughts on the subject can at least get you started on the right path.

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NOTE: this blog post assumes you’ve already built something and that it’s not working. However, it’s equally valuable for those about to build something because it probably won’t work (I’m not a pessimist, I’m just experienced in failure).

So bookmark and take notes for later.

And if you like this blog post (and want more like it), shoot me a tweet to let me know!

[Click here to Tweet me to let me know you want more content like this!!]

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Step 1: Lay the Foundation for Your Pivot (Figure Out What Worked and What Went Wrong)

In the Army, after every mission, training exercise, event (basically everything), they conduct what is known as an After Action Review (or AAR for short). An AAR is a chance for key players (anyone involved in an operation or exercise) to identify:

  1. What was supposed to happen?
  2. What DID happen?
  3. Sustains – what did we do right and what should we do the same next time or in a similar (3 is usually the minimum)
  4. Improves – what did we do wrong and what should we do different the next time (3 again)

If you’ve read any of the business books I’ve listed above, you should see a thread that runs through the lean startup methodology

  • What was supposed to happen = Hypothesis
  • What did happen = Testing the hypothesis
  • Sustains / Improves = Measuring based on metrics you’ve established earlier so you can iterate (try again)

I conduct an AAR with myself or my team after every major shipped project.

For your own AAR guide and pivot checklist and work, grab “The Essential Pivot Checklist and Workbook” Below:

Download The Essential Pivot Checklist and Workbook

AARs are valuable for things like:

  1. Writing. If I write for a major platform (like Fizzle.co or Problogger.net) then I want there to be some positive result (like X number of new email subscribers to my list, or Y number of comments, or…you get the idea). I need to sit down after something like this ships to see what the results actually were and if it’s worth doing again in the future (and how to improve the next time to get better results)
  2. Consulting. When I consult with someone, I want to make sure there’s a positive result for the person I’m helping. This is the only way to improve and continue getting clients.
  3. Projects. I launch a lot of projects. What were the results? What can we learn? How can we do better next time?

If you take away anything from this, know that pivoting begins with analyzing what was supposed to happen versus what did happen. Without this basic knowledge, you can’t pivot (you’d just be shooting in the dark…which might work…if you’re lucky).

Step 2: Determine the Shift that Needs to Take Place for Your Pivot

Cool, so you know your first plan didn’t work… Now what? The AAR should give you insight into what to do next.

  • If your “sustains” included something that sorta worked, can you double down?
  • If your “improves” included something that completely missed the mark, can you scrap it altogether try a different approach?

More likely than not, some part of your original iteration worked. If that’s the case, it may be useful to consider how you can maintain your original idea (mostly) while tweaking what worked to make it more effective (or reducing what didn’t work so it is less disruptive to your business model). Conversely, if NOTHING hit the mark, it’s much more effective to change things dramatically. Here’s Ash Maurya’s (author of Running Lean) take on it:

If the goal is to maximize learning, you have to pick bold outcomes versus chase incremental improvements. So rather than changing the color of your call to action button, change the unique value proposition. Rather than experimenting with different prices, experiment with different pricing models.

In other words: to know where to go, you need to know where you’re at. That means determining if you’re FINDING the fit, or OPTIMIZING the fit.

Pivoting Before and After You Find Product / Market Fit

When I launched The Creative Entrepreneur (now Bootstrapped), I was shooting in the dark a bit.

Iteration 1: finding product market fit…

I knew I wanted to create some sort of annual publication with reoccurring revenue and I knew I wanted to focus on business. The first thing I did was pitch the idea to potential contributors (the people who would produce the content for the publication. This is how I received my first form of validation (I’ve written more about that here).

In a nutshell: I figured if people would write for the publication, then people would pay for the publication. This is an assumption, of course, and needed its own round of testing (preorder sales). I don’t want to go in depth here about validating an idea as that’s a topic that deserves its own analysis (read this article for more information on validation), but the point is: I was trying to find product/market fit. With the preorders I received, I found it (at least in a small way).

Iteration 2: optimizing product market fit…better, no?

The next step for issue 2 was optimizing the product/market fit. This required pivoting again by asking questions like:

  • How can I scale this?
  • How can I grow this?
  • How do we get more users, subscribers, etc.?

For us, that meant branding redesign, re-evaluating the content strategy, adding new sales channels, etc. Have we optimized product/market fit? We can’t be sure just yet. Yes we’re getting subscribers and yes the reaction is overwhelmingly positive, but some of these tests take weeks or more to confirm for sure (especially big changes like a rebranding).

What’s the “Right” Pivot?

To be entirely honest, the answers to these questions are elusive at best. Just like if you’re trying to pivot a new business (or an old one), you won’t know what the right answers are for sure.

The point isn’t to know the answers at the outset. The point is to have an idea and be willing and able to test until you find something that works.* **just to emphasize again: what “works” for optimizing product/market fit is different than what works for finding product/market fit**

Step 3: Test and Measure Your Pivot

Testing and measuring your pivot is the simplest step. Step 3 is all about taking meaningful action. What did you decide to pivot?

  • Did you decide to change the pricing model?
  • Did you decide to add or remove features?
  • Did you decide to change mediums?

Whatever the choice, make sure you can measure it. For example:

  • Changing a pricing model is easy: did you get more or less sales?  How does that affect revenue and profit overall? What’s the reception from your target market.
  • Adding or removing features? Again, how many more people opted in? Did you get more paid subscribers, more signups, more…?

You get the idea. A pivot is only as useful as what you’re able to measure.

The Hardest Part of Pivoting

Testing and measuring your pivot is also the hardest part. Not because it’s technical – it usually isn’t – but because it’s hard to pick ourselves up and test something that didn’t work out the first time. It hurts to get rejected. It hurts when we miss the mark again – sometimes more than the first time.

Here’s the deal: There’s nothing to be ashamed of by retesting an idea in a new way. If someone said no to your idea, it’s not grovelling to go back with a new pitch and ask again.

In fact, the person you approach again should be happy that you adjusted course. After all, if this person is in your target market, they want what you’re trying to create.

So don’t worry about the rejection or failure (it’s all part of the process).

Instead, perceive and approach your pivot as an experiment and a game. This works because…well, it is So don’t stress – just test.

A Free Guide to Help You Pivot

Okay, so this blog post taught you a little about pivoting , but what’s next?

I always find it helpful to have some sort of guide or worksheet to help me follow through on material, so I took it upon myself to create a sweet downloadable (and FREE!) product for those of you looking to pivot in your business. In the workbook you’ll get:

  1. A 2 page After Action Review workbook (including a breakdown of what an AAR is and how to use it)
  2. The 3 Step Pivot Evaluation Method (this will help you focus on what to target and whether you should focus on finding product/market fit or optimizing product/market fit)
  3. 10 “Target-Pivots” that Eric Ries of The Lean Startup uses when pivoting a business (this stuff is gold)
  4. The 5 Step Pivot Execution Framework (to help you put it all together!)

[Get your free copy here]

do it

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I hope this blog and the accompanying checklist and workbook help you on your way to product/market fit and a successful business. If you enjoyed this blog post, let me know.

Click to tweet me and let me know!

Started in Napa, California (just before meeting up with The Resistance, San Rafael Branch). Finished and Shipped in San Fransico, California.

Writing time: 9:14 (ouch…true story)

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Tom Morkes (1)_burnedHey, Tom here. What did you think of today's blog post?

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Comments

  1. says

    A thought: PIVOTs are not only connected to BIG things like models, over-arching strategy or big launches.

    They can be – and many times should be – implemented inside the movements of small decisions inside projects. Little adjustments that potentially turn into big wins.

    Anyway, that’s not what I wanted to post! ;-P

    Related to this, I had a large pivot a few weeks ago – but until I had disconnected from my work for a few weeks, it never would have happened.

    Here’s what happened: I have a big, very important product launch coming in August and have been struggling with a lot of the issues connected to what the offer should fully entail, pricing, bonuses, launch strategy – on and on.

    I was over-thinking EVERYTHING and had no healthy perspective on what this project should look like – only lots and lots of (mostly) good ideas.

    I was getting fully slowed down by the details of the project and was unable to fully ignite inside the project. And the clock was going tick, tick, tick.

    I had not had a real vacation more than 3/4 days in a long, long time and, earlier in July, took two weeks off.

    ON THE LAST DAY of being gone for two weeks, in the airport with a four hour layover, I had a epiphany connected to the project – and full-on pivot in a new direction that feels right and one that I know will result in a better, more kick-ass offering for my customers.

    My point is: sometimes, having a proper mental environment can help the process with figuring out adjustments in one’s business, like pivots.

    Before you make BIG pivots, make sure your mind is in a healthy state, wherever possible – disconnect for a day or two, take care of yourself – wrestle w/ the problem on a lower level, let your subconscious do some heavy lifting….and revisit the decisions connected to a possible pivot when you are less prone to reactive states of mind.

    • says

      Bruce, I love this!

      So true and something that shouldn’t be taken lightly (re: right state of mind / right environment when testing a big change).

      Also agree: most pivots are smaller (although that’s why I wanted to make a point that Ash Maurya wrote about in regards to FINDING vs. OPTIMIZING pivots).

      Great stuff my man, can’t wait to see what you create!

  2. says

    I’m beginning to think you read my mind. I was just thinking about learning more nuanced ways to pivot, a system or worksheet to get my clients to think through, and a way to help them keep a healthy perspective on things. Granted this is far more inspiring than I thought I’d find…

    Be sure that I’ll be linking my readers and clients here rather than Inc.com. =P

  3. says

    Outstanding post, Tom. I believe there is a dire need of awareness as well as more resources about pivoting. Especially ones that simplify the concept. There are brilliant books on the topic but, like you said, they are too technical for a beginner or for someone outside the tech startup scene.

    I loved this line – I’m not a pessimist, just experienced in failure. I also feel there’s one thing that needs a little more clarification (and I believe Eric Ries also raised this question) – how do you know when to pivot and when to persist? Would you be willing to explore this topic?

    I received the email about Bootstrapped #2 but haven’t even read through #1 yet. Just waiting to finish my current project so I can begin reading.

    • says

      Thanks Debashish! I agree – definitely needs to be more emphasis put into pivoting…it’s neglected compared to a lot of the other aspects of business (like product creationg, validation, etc.) – but of course, pivoting is the most essential (simply from a learning standpoint).

      Thanks for the comment.

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