How you adapt your business idea to what you've learned in the field is critical. While iterations of the core idea are fairly easy, pivoting to a radically new business model and value proposition is a tougher challenge. Entrepreneurs and intrapreneurs must react quickly. The longer they wait, the more vulnerable they get. Keep an eye on these 6 situations that indicate when it may be time for you to pivot.
Failure, learning and adapting are part of the journey when you are searching for the right value proposition and business model. In this phase, you iteratively test the hypotheses underlying your idea, learn about the market/customers, and improve your idea until you achieve product-market and business model fits. There are two types of adjustments you can make when you're in the 'search': the 'iteration' or the 'pivot'. Let's quickly look at why they are distinct moves:
While entrepreneurs and intrapreneurs easily make iterations to their idea, they struggle to pivot to a radically different business model and value proposition. Failure to pivot usually occur because an entrepreneur or intrapreneur is too late to kill an idea they love, or too slow to realize substantial changed are needed. It is crucial to react quickly when you need to pivot.
I have listed 6 situations to help you identify when you may need to pivot to a new business model and value proposition. Stay on the alert if you're in one of them!
1. You don't generate enough traction from the customer you targeted:
2. Your value proposition doesn't resonate with customers
3. Your acquisition & retention strategy doesn't generate the growth you hoped for
4. Customers are not willing to pay the price
5. You can't build the product and/or your costs are too high
6. External forces are threatening your business model
As Bill Gross explains, wrong timing can mean death to your venture. In this case, there’s already too many competitors and great products available. Or you’re too early in the market and people need to change their behaviour to adopt your value proposition. Be on the look out for opportunities to enter promising markets that will soon experience a strong growth.
The market you’re entering is maturing and sales are declining. Other businesses are trying to get out of that space. Figure out why sales are declining and where customers are going to spend their money.
Laws, political forces or the right economic infrastructure are not in place for your business to succeed. How can you leverage the opportunities in your current environment?
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