Tag Archive for 'pivot'

Parkour for Startups: Conserve Momentum

Admittedly, I look like a giraffe. (A handsome giraffe damnit!) So it was inevitable that the universe would take advantage of my gangliness by conspiring to put me into a Parkour class. (Hint: I got a Groupon.)

For those not familiar with it, Parkour is “extreme urban running” as imagined by a crazy Frenchman named David Belle. It’s that thing they do at the beginning of Casino Royale and in those old Nike comercials. Here’s a video if you still don’t know:

Needless to say, I’m feeling tender today. Whole new parts of my body are sore in ways I did not know were possible. And yes…it was damn fun.

Momentum

As I spent the next 24 hours massaging tiger balm into my aching calves, I thought about the class and how much it resembles what we’re trying to do with startupSQUARE.comConserve momentum.

Here’s how a typical Parkour vault works. You run as fast as you can towards an object in your way, leap towards it headfirst, then right when you’re about to crash into it, you drop your arms down and push yourself ever so slightly over it. This presents two distinct problems for the novice.

  1. Hurling yourself headfirst towards an object seems inherently unwise.
  2. Using your arms to brake your fall seems inherently smart.

Unfortunately, neither of those insights will get you over the obstacle.

Commitment

Hurling yourself headfirst without thinking things through is a typically entrepreneurial trait. It’ll work. Might be risky, but just do it. I think most entrepreneurs have this part down so I won’t go too much into it. Suffice to say, it is an act of crazy faith, backed up only by a vague understanding of the laws of physics and the belief that the second part of the equation will work. That is…the pivot.

Minor Adjustments

The second part is where you touch your arms down ever so slightly. The trick here is that you’re going to put your arms down after you’re over the object. So you’re actually not pushing down off the object, but more away and behind you. You’re just adding a little extra boost to which pivots you from a painful headfirst collision to a badass monkey style dismount.

If you put your arms down too soon, you’re actually trying to stop your fall with your arms, which is not going to happen. If you don’t believe me, imagine catching a 185 lbs torpedo (my weight) with just your arms. Yeah…doesn’t sound pretty.

This is a typical situation in a startup. You’ve invested a tremendous amount of time trying to build up momentum, calling all friends to try your product, handing out flyers, coding coding coding, and pimping yourself to every VC with a checkbook….then all of a sudden…an obstacle in front of you. What’s to be done?

Sanity

The sane thing would be to stop and go around it. Or pick a different direction.

But we’re entrepreneurs, so let’s get past the sane stuff. We want to conserve momentum. We keep going forward, hurl ourselves violently at the impending doom of a metal barrier, and then make a slight midair pivot and keep going.

This series of minor pivots allows us to keep going and avoid the stop start of a big company. That’s the type of start and stop where projects get cancelled, execs get fired, budgets get swallowed by financial crises,etc. We know that if the company grinds to a halt, it will be incredibly difficult if not impossible to get going again. Our finances will run out, morale will deteriorate, and our financial backers will be unlikely to invest another round in a “new direction”.

What we really need is not to stop. Any obstacle can be overcome and it doesn’t mean the vision is wrong. We need to be lean and nimble, pivoting as we maintain momentum. We need to be graceful. In the spirit of l’art du déplacement We need to…and this is the only time you’ll hear me say this…be a little bit more French.

See you at Parkour class,
Tristan

P.S.: If you’re in San Francisco and would like to go to a class, let me know. I need someone more gangly than me at the class for encouragement.

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Customer Development with Network Effects

How does customer development differ with regards to products which require a network effect to be useful? Short answer: No one knows.

Companies offering services such as Skype, eBay, Facebook, and others have cannot really test their value proposition without having a critical mass of users. A telephone with only one person on it is pretty useless. Yet these are some of the most lucrative inventions ever. So how do you apply the principles of customer development to these situations?

At the Startup Lessons Learned conference, I asked a panel of people far smarter than myself this question and Sean Ellis‘ response was, “It’s a modified approach that really hasn’t been defined in a structured way as Four Steps to the Epiphany lays out.” He then invited anyone who can figure it out to write a blog post on the subject.

Well, I haven’t figured it out. I will however throw out some suggestions for testing and I’ll let you know if they work later.

Narrow the Market (Sean Ellis)

Sean Ellis did turn around and make at least one good suggestion such as, “The value proposition is a moving target.” He suggests trying to narrow the target market so you can test networking effects with less risk. For example, eBay could have tested auctioning in the pez dispenser market instead of allowing any product to be sold. (His example, not mine) Under Eric Ries‘ terminology, this would be a Zoom-In Pivot and it’s something we’re also trying with startupSQUARE.

We started out letting all sorts of people into our site in alpha state to test it out. However, we found that the level of interaction (people posting ideas and profiles) was very very low. Far lower than our conversion rate and customer interviews would predict. When doing follow up interviews we found that people would look for other users in a very small niche industry (we have an overly large industry list) and find no one there. With no one there, it sent a clear signal that posting a profile wasn’t worth the effort because no one else would read it.

Our solution to this is two fold. First, our industry list is horrendously complicated. Although some users have indicated they would like a more detailed list, we have to start with a simpler list. When the list has broader categories, users will be find more people in each category and thus have a higher level of social proof.

Second, we’re modifying our signup process to collect more information when signing up, including industry interests. This will allow us to let in critical mass groups from each vertical we want to target. We’ll also be able to test the size of the group necessary for the network to have value and better analyze any behavioral difference between users of different industries.

Test Interaction on a Smaller Level (Brant Cooper)

Brant Cooper offered the example of Jeff Smith from Sonicmule who built products to test specific things such as social applications. Behold: the SonicLighter. Without hearing the specifics from Jeff, it’s tough to discuss this. Still, sounds like a great idea. Try to simplify the amount of interaction necessary, potentially in a different context. If anyone has thoughts on this, I’d love to hear them.

Funniest Answer (David Binetti)

David Binetti had the funniest answer. He just shook his head with a grimace when Sean asked if any of the panelists had an answer.

There is Still a Problem

Although no one really has a definitive answer, I would propose that the general customer development thesis can still be tested, even with network effect driven products, for a simple reason: The customer still has a problem.

The telephone allows people to communicate. Ebay allows people to sell things in a marketplace. OkCupid allows people to get laid…err…I mean meet people. All these companies target established customer needs which have clear analogies in the real world. Facebook was based on…well…a facebook of people on campus. In many ways, customer development should have been easier for these companies since the customer problem was really already established. “Who was that hot girl in class today?” (Facebook’s initial customer problem.)

Nothing prevents you from establishing your hypotheses and verifying them with customers outside of the building via a good old fashion customer interview. “Do you have a lot of old junk you want to get rid of? Would you like to sell it? Where have you tried to sell it? What would make it easier to sell it?” Tada! eBay.

Fake It

Another tidbit that I think is valuable is faking data. That sounds bad. Let’s say, “Bootstrapping Data”. When you do your mockups, don’t use “Lorem Ipsum blah blah blah”. But in real names, real text, and real data. Get your friends to post things in your alpha. Post 100 times yourself. Farhad from Atracted.com bootstrapped his first few video personal ads by throwing a party, inviting a lot of cute girls, then sticking them in front of a computer to introduce themselves. Brilliant! Plus he got to have a party with a lot of cute girls!

The Real Video

In case you wanted the full video, here’s the embed starting Cindy Alvarez, Product Manager, KISSMetrics * David Binetti, Founder and CEO, Votizen * Brant Cooper, Principal, Market By Numbers * Matt Johnson, Grockit * Moderator: Sean Ellis. My question appears around 28:00

Watch live video from Startup Lessons Learned on Justin.tv

Cheers,
Tristan

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The Taxonomy of the Lean Startup Pivot

(warning: this post may be highly theoretical / geeky)

Last week I was planning for the worst. Having gone through 51 iterations of my mockups and gathered as much as feedback as I could with our primitive alpha, I feel confident about our basic customer problem hypothesis. Still, I play a lot of chess and like to think at least five moves ahead in the five most likely futures. So I decided to make a list of my potential pivots.

(note: For those not familiar with the term, pivot is a lean startup vocab word that states in it’s simplest form: If your business model isn’t working, change something. More on this below.)

To do this, I started making a list of questions I could ask of my product/market to brainstorm other ideas. In the process, I wound up breaking up my list of pivots into categories based on the questions and posted the list to the lean startup google group. I was wondering, “is anyone else doing this? Is there was any established taxonomy for pivoting or any template? Are there other questions I should be asking?”

Here was my original list of questions and their associated pivots:

Product Pivots:
- Can we solve the problems of our target market with an partly or
entirely different product?

Use Case Pivots:
- Can we use the same tech for a different use case with the same
target market?

Market Pivots:
- Can we apply the same product / tech to a different market?

Narrowing stance:
- Can we narrow our focus to a smaller/niche market or use case?

Widening stance:
- Can our product embrace a wider market or use case?

I thought this list could be the start of a very rudimentary taxonomy of pivots. However, some of the responses I’ve received so far have tested my understanding of the basic pivot concept and made me realize I had tied the concept of pivot into “product / market fit.” As product / market fit is most basic hypothesis I need to confirm before knowing that I have a viable business, any business changes outside of product/market fit didn’t register as a pivot for me.

Expect the Unexpected

Others seem to have a different take on the term, including Brant Cooper who implied “Everything about your business is a potential pivot” and also Eric Ries who suggested the following types of pivots:

  • Customer need pivot: same customer segment, different need/problem
  • Customer segment pivot: same problem, different segment
  • Business architecture pivot: ie from enterprise to consumer
  • Zoom-in feature pivot: remove features to focus on just one key feature
  • Zoom-out feature pivot: add features to become more of a holistic solution
  • Technology pivot: solve same problem but with different technology stack
  • Channel pivot: same problem, same solution, different path to customers
  • Platform pivot: open up an application to third-parties to become a platform (or vice-versa)”

(emphasis mine)

You’ll note that Eric’s list and Brant’s response both imply or include changes which don’t necessarily apply to product/market fit. In Eric’s list, I’m looking mostly at “technology pivot” and “channel pivot” which have nothing to do with who you’re target with what product, but instead focuses on how to make the product.

There is a lot of overlap between Eric’s list and mine and some of his terms are a lot zingier. moz screenshot The Taxonomy of the Lean Startup Pivotmoz screenshot 1 The Taxonomy of the Lean Startup PivotBut for my current purpose of achieving product/market fit I need something combining both elements, so I merged them:

(Please note: I wouldn’t recommend taking my list over his, especially if you plan on speaking the same language as the rest of the lean startup gurus.)

Product Pivots:
- Can we solve the problems of our target market with an partly or entirely different product?

This one doesn’t seem to have a parallel in Eric’s list, which I found surprising. I’m keeping it in mine because I think it’s very relevant.

Use Case Pivots:
- Can we use the same tech for a different use case with the same target market?

This is “Customer Need” in Eric’s list.

Market Pivots:
- Can we apply the same product / tech to a different market?

I would group “Customer segment”, “Business architecture”, and “Platform pivot” under this. All of them refer to who you’re selling the product to. I would consider all of this under the broad category of Market although it’s very very useful to break it down further for brainstorming.

Zoom Pivots:
- Can we narrow our focus to a smaller/niche market or use case?
- Can our product embrace a wider market or use case?

This is a great term from Eric and is better than my “Narrowing / Widening Stance” term. The main difference is that Eric’s refers only to product features and I would also want to address the possibility of widening or narrowing the target market. (Although you could just as easily call those Market Pivots.)

Open Ended Answer

You may also note that in the list above I ditched Eric’s suggested categories of “channel” and “technology” pivot as they don’t help me with product / market fit, but rather refer to marketing and production techniques. That’s not to say they’re not valuable, just they’re not relevant to the problem I’m trying to focus on right now.

As such, I have no firm conclusion to this post. I started the taxonomy as a thought exercise and I’m continuing in that spirit. I realize I may be using the term pivot differently than the lean startup folk and I need to adapt my terminology. Speaking my own language is not particularly useful for communication purposes, although I do find it helpful to associate the term pivot with the product/market fit concept. Otherwise pivoting can be applied to everything and is synonymous with the word “change”.

That’s it for the geeky post. Next week I’ll try and share some of our user behavior maps.

Cheers,
Tristan

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