Pivots: Part 6 | Types of pivots
In some of the most bleeding-edge thinking on product–market fit and pivoting, Selcuk Atli wrote The Startup Pivot Pyramid and I highly recommend everyone read it right away.
His article provides an interesting model by which to categorize different types of pivots. While “growth” typically gets the glory through growth hacking success stories, it is often the decisions made and tests run long before that set the stage for growth to get the glory.
In Atli’s model, there are the five stages of pivots as you work your way up the pyramid: customers, problem, solution, tech and growth.
It all starts with the customer. If you want to pivot the right way—a.k.a., if you want to find a better product–market fit for your startup—you first need to re-evaluate who your customer is.
Why? Because everything you do in order to achieve better product–market fit is done in accordance with who your customer is.
Now, when defining who your new customer is going to be, it’s important that you’re not vague.
To meet the needs of a target market and achieve product–market fit, you first need to know exactly which market you’re going after.
So specificity is your friend here. After all, if you know your customer really well, it becomes easier to work out what their most pressing problems are.
Furthermore, it becomes easier to figure out where they hang out—meaning it’ll be easier for you to decide which channels and marketing strategies you should adopt when it building out the growth layer.
A good exercise for this stage is to create something known as a customer persona.
This is where you essentially create a fictionalized character that represents your ideal customer.
In some cases when pivoting, it’s obvious who your new customer should be.
Twitch is a good example of a company that went through this.
Initially it just wanted to target any customer who was interested in live streaming. However, upon reviewing its customer base and product usage, Twitch found that, for the most part, gamers were its most active users.
Twitch then adjusted its approach and built its product so that it was designed specifically for game streamers.
Now that you’ve identified your new customer, you need to identify the problem you want to solve for them.
One of the defining features of a great pivot is identifying the right problem to solve.
After all, you might do a good job at picking the right kind of customer. But guess what?
No matter how specific you are when it comes to selecting your customers, you’ll still end up with a group of individuals who face several problems.
It’s down to you, therefore, to identify the problem that’s worth solving.
And more often than not, the problem worth solving is the one that is the most pressing and whose solution will produce the greatest benefits for the customer.
When you can solve the most pressing problem of chosen set of customers, the more likely you are to experience growth from early adopters.
So how do you know which layer to focus on? The key is to pay attention to the kind of feedback you get from your existing customer base.
The good thing is that when you purposefully run experiments, you receive a lot of feedback.
See whether they’re using the product in unexpected ways.
When you ask customers for feedback, do they sing the praises of one specific part of your product?
Once you have pinpointed the customer and problem you want to solve, you’ll have your market.
Once you’ve identified the right customer and problem, you need to focus on building the right solution.
The solution is simply what you’ll build to tackle the customer problem in a way that outperforms the existing competitor solution.
This solution will have a direct impact on how you achieve growth, via three distinct mechanisms:
The type of solution you build will affect how you market it. You wouldn’t run a Facebook app install campaign for a desktop web tool, for instance.
The better your solution, the more you’ll benefit from word-of-mouth marketing. If your solution does an amazing job at meeting the needs of your target market, growth becomes much easier because your customers will promote the product for you. To arrive at a great solution, you need a keen sense of how incumbent solutions are failing your market. When you know what gripes your market has with the current solutions, your odds of developing a better solution sharply increase.
Build your solution so that customers can quickly achieve their desired outcome—or at least quickly become aware of what’s possible. This will help create long-term customers out of the gate, as retention rates will be higher. And retention matters because when you minimize churn, your efforts toward growth won’t be short-lived.
Technology is just the tool that you’ll use to create and build your solution.
Now the technology part can be a tricky thing to get your head around. There are two main considerations:
Is your tech solid enough to withstand increased usage and/or dramatic increases in growth?
Is the tech you’re using preventing users from maximizing the utility of your product?
To address the first consideration, ensure you’re in a position where you’re able to adapt quickly should there be a sudden spike in demand.
Many of the top startups in the world started out with crappy technology, despite their high growth. Friendster, for instance, ran into a lot of trouble simply because its servers couldn’t keep up with demand. And if servers can’t keep up, eventually people don’t bother, right?
Have a plan in place for such a situation, so that you’re safe.
To address the second one, build your solution using technology that allows customers to get the maximum utility from your product when they are trying to solve their problem.
Keep in mind that technology is always changing. This can be true even if the customer’s problem remains the same. Because of this, stay alert and open to pivoting your technology in order to better meet the needs of your market.
Remember, technology is just the means you use to best meet your customers’ needs.
Finally, there is the growth stage at the top of the pyramid.
This stage is complex as it can be hard to define what it actually relates to—even though it’s ultimately the one that is most affected by the earlier pivot stages.
Each of the experiments you run in the other sections of the pivot pyramid must all be done in the name of growth (something we’ve discussed repeatedly).
So what do you tinker with in the growth layer?
Well…in some cases, you might want to run experiments that aren’t necessarily based on changing the product, technology, problem or even the customer.
These are the experiments you’d end up doing at the growth layer in the pyramid.
Compared to everything else in the pivot pyramid, you’ll probably end up experimenting with growth the most.
That’s because it’s not too uncommon for one method of growth to suddenly stop working or perhaps become unviable simply because of cost.
For example, some people got a lot out of AdWords when it first came about, but then had to adjust their means of growth as too many people started bidding on the same keywords, thereby raising the price.
And so whilst your core customer might stay the same, the way in which you reach them might change a multitude of times.
On top of that, it’s also worth mentioning that changes in technology can greatly affect the kinds of experiments you run in the name of growth and achieving better product–market fit.
As we touched on earlier, if you change the fundamental nature of your product, you’ll need to promote it using alternate methods.
Next in this series
Now that we’ve turned you into a pivot master, the next and final part of this series will offer a cautionary warning. We’ll look at how pivoting can be dangerous if used improperly.
Catch up on the series so far
Pivots: Part 1 | Why is pivoting important?
Pivots: Part 2 | The search for product–market fit
Pivots: Part 3 | Why most startups fail at finding product–market fit
Pivots: Part 4 | Some pivoting myths
Pivots: Part 5 | Pivoting: Case studies (PayPal, Flickr and YouTube)
By Jeff Goldenberg