If you are reading this you may suspect, or know, that your product needs a change. This conclusion can be reached in many ways. Markets can change, as we have seen during the pandemic, or perhaps the initial hypothesis just did not pan out. Despite the reason we can only assess the scenario honestly and act methodically. I have overseen multiple product pivots within the IT space, below is my best advice.
Identifying the need for a pivot is often daunting. When arriving at a company where a pivot is needed one place to start is the P&L. Based on the run rate you can get a sense of how long you have to make changes and how matrixed, or agile, the team is. Moving away from your existing roadmap can be hard for the team. Digging into the telemetry can help build a case, I’ll get into this in some detail.
Stakeholder management is critical to push a pivot forward. Your stakeholders can range from the CEO to the investors. Each group will require a different approach but all will need transparency into the reasoning.
The first stakeholder you need to get on your side is the CEO, your partner. They are the most critical sales person on the team. Before approaching the CEO dig in with your team on KPIs and usage. Then socialize your findings with the functional groups: customer service, marketing, product, and engineering to flag any issues and flesh out your hypothesis. With consensus from the team, present your case with the PMs and PMMs defending their sections rigorously.
Now for the investors. You have to empathize with their position, they gave you money to fund a vision and now you want to pursue a new vision. This is not uncommon but to an investor there can be concern that you will need to start from scratch. You want their support, their feedback, and ideally their continued investment. To gain this you need to get them excited about the new vision and lead them on a journey that lands at the same conclusion you arrived at. Begin by seeding the idea, not everyone loves a surprise. Socialize the pivot with your sponsor early, ideally in person. They can be your advocate. Then leverage the CEO, they will always have the most passionate pitch. Lastly, present realistic timelines for delivering your new vision and pragmatic estimates of any staff augmentation and runway you need to bring the product to market.
Lastly you have the boss battle, your own company. This may sound counterintuitive but they will likely be the hardest to bring around and it's unlikely all of them will buy in. They worked diligently to support the original vision and, to some, pivots will be unfamiliar. Acknowledge their work and express gratitude. Everything you have up to this point is from them. Be completely honest. Present what you showed to the investors and be open about the roadmap and changes to the company. Then accept the new vision will not be for everyone. You join a company out of passion, sometimes the vision changes and an employee's passion dissipates. That's ok.
Validation isn’t immediate, but the sooner it happens the better. For the MVP separate wants from needs and outline the fastest route to market from the existing infrastructure that is already in place. Then create a roadmap going out at least two quarters, focusing on the early delivery of validating features. Your investors will likely require this. Lastly, chunk the MVP into parts and ensure the features you are building early are future proofed against the needs of the later sprints.
MVP delivery can happen quickly if you plan methodically. Identify and release core features early so you can test and hone your pivot hypothesis. Bake attrition into your roadmap, as mentioned there will likely be a % of staff that will not align with the new vision and it will affect your delivery timelines. Then bake in the runway to iterate and improve the early features. Be sure to employ the scientific method for the roll out to ensure you are quantifying the lift. Do this via whatever A/B system your team is most comfortable with, geo or soft launching the product. Remember that relying exclusively on cross promo from your existing audience may provide false negatives. It's important you source a steady stream of registrants that will reflect the actual quality of users you expect to get in the future, this stage will let you know if your hypothesis works at scale.
Market communication is critical once you feel comfortable with the new direction. When KPIs have been validated you can start B2B focused PR, evangelizing the new platform to prime you for future investment rounds. Once you achieve positive unit economics it will also be time to test and see if your return on ad spend scales as you acquire larger and larger cohorts of users. Assuming all goes to plan you can resume, or start, your partnership efforts. Depending on your business, landing enterprise partnerships can show stability and help with future investment.
Below is a matrix that outlines these best practices left to right. The top contains recommended actions for each stage, the bottom lists the needed artifacts:
- Actions - It’s critical to dig into your early funnel, review your economics, and make a concerted effort to iterate the existing product into success
- Artifacts - You will need are a KPI post mortem and an A/B test plan
- Actions - Start by evaluating the current product strengths and asses what the team is good at building, then conduct a market review looking at the acquisitions in your space over the past year
- Artifacts - The principal artifact you will need is a comprehensive product deck that clearly outlines and supports the teams pivot recommendation
- Actions - Get the CEO on board, from there work to get stakeholder consensus, then align the internal teams
- Artifacts - You will need here are an investor/team deck that can be repurposed from the previous product deck
- Actions - The team will have to align on the MVP, following you can create a realistic delivery roadmap
- Artifacts - This will require a Technical Design Document (TDD) and an easy to understand roadmap that lists dependencies
- Actions - Soft launch the new product, acquire qualified users, and adjust your P&L to account for a lull in revenues
- Artifacts - The PMs should put together a soft launch plan then a P&L proposal should be locked in with the CEO
- Actions - Activate B2B / B2C PR to get your name in the trades and attract investment / new business, approve a growth model that achieves the desired goals but doesn't exceed your budget and run rate
- Artifacts - The final artifacts you’ll need is a board approved forecast and a business development pipeline that lists relationship owners / next steps
Some of these steps may differ depending on the type of company you are in. For example, large enterprise companies may not need to be as concerned about convincing investors. However starting here ensures you will be thorough in building alignment and setting expectations.
Success is a function of time and if your pivot works it buys you more time and a brighter future for your company. It takes maturity and honesty to undertake and execute a pivot. I know many founders in the digital space and most have been through at least one. Keep your resolve and eventually you will find success.