PIVOTING, The Secret Sauce for Start-up SuccessKaty Cook
Why do over 90% of the start-ups fail within the first 5 years and why do over 95% of start-ups have difficulty getting funding from investors? Most of the founders are well educated (MBA, CPA, DBA, M.D., Ph.D., and on and on), and investors are actively searching to invest.
Startups and small businesses represent over 50% of our GDP and over 90% of our workforce.
The purpose of a start-up is to develop a business model with a sustainable competitive edge, that is repeatable, scalable, and profitable. Most of us rush to “build a company” instead of “developing an optimum business model”.
This way of thinking leads most of the start-ups into the so-called “land of living dead- mindless zombies.” They just keep working hard to sell a product that the market doesn’t want.
Most of the founders fall in love with their solutions. That is their idea. That is their baby. To them I say, your baby is ugly. Instead, you should fall in love, or better yet, obsessed with the problem. Find the simplest solution possible so that your customers like it, love it, or better yet, “can’t live without it.”
To minimize failure, you should keep asking yourself how you need to change your product and/or service to improve it and “help it find its market.” It is a fundamental change of course and is called “Pivoting.”
A pivot can take many shapes, redefining the core value of your product and/or service. It could be choosing to pursue a different customer segment and/or changing your main sales channel. Deciding to pivot can be tough, and hence start-ups often either avoid or postpone making this decision.
Therefore, it can be beneficial to hold “pivot meetings” at least once a
month. In these meetings, you take an honest look at the data you have gathered and ask yourself whether you might be “a zombie in need of a pivot.”
Most of the start-ups had to pivot several times before they finally became successful businesses. They all have something in common- “the simplest business model that we can only dream about”
“Yes, the secret sauce for start-up success is to learn, master, practice and preach PIVOTING.” Enjoy the Journey