Startups and pivots seem to go hand in hand. Many famous companies have undergone massive pivots—Instagram, Twitter, and Slack, to name a few. A pivot can be a strategic move that breathes new life into a struggling business model. But let’s face it: pivoting after you’ve already built your product and launched it can be a costly and time-consuming endeavor.

What if you could pivot before building your solution or going to market? Imagine the resources you could save and the confidence you could build with investors. Preemptive pivots are possible, and I’m here to share three methods to identify potential problems with your business model before you commit to a direction.

This article is part of our series on starting your business. Check out the rest of them here.

The Cost of Post-Launch Pivots

Before diving into the strategies, it’s crucial to understand why post-launch pivots can be problematic. Picture this: you've invested time, money, and energy into building your solution. You’re interacting with customers, collecting feedback, and suddenly realize that you’re on the wrong path. Your product doesn’t solve the problem it was meant to, or the market isn’t as lucrative as you thought.

Common Consequences of Post-Launch Pivots

1. Financial Strain: Redirecting resources and rebuilding can strain your budget, making it difficult to sustain operations.

2. Lost Time: Every minute spent pivoting is time you could have spent scaling and refining your product.

3. Investor Skepticism: A major pivot can signal to investors that the business is unstable, leading to hesitance or withdrawal of funding.

4. Team Burnout: Constantly changing directions can demoralize your team, leading to burnout and attrition.

5. Brand Confusion: Customers and partners might struggle to understand your value proposition if it keeps changing.

Avoiding these pitfalls is why preemptive pivot strategies are invaluable. Let’s explore three methods to help you pivot in advance.

Strategy 1: Engaging with Customers Early

One of the biggest mistakes founders make is waiting until their solution is ready before talking to potential customers. This approach is backward. Instead, engage with your target audience early to uncover what they truly need.

The Importance of Customer Conversations

Early customer engagement allows you to validate your assumptions and gather insights that shape your product development. You’re not selling your product at this stage—you’re learning about the market’s needs, pain points, and priorities.

Why is early engagement essential? It helps you:

• Identify Real Problems: Ensure you’re solving a significant issue, not just an inconvenience.

• Understand Customer Priorities: Discover where your solution fits in their list of priorities.

• Gauge Demand: Assess whether customers are actively seeking solutions or merely passively interested.

Key Questions to Guide Customer Conversations

When engaging with customers, ask questions that delve deep into their needs and challenges. Here are some crucial questions to consider:

Problem Significance

• How big is this problem for you? Determine whether the issue is a pressing pain point or a minor inconvenience.

• How often does this problem occur? Frequency can indicate the level of urgency and necessity for a solution.

Priority Assessment

• Where does this problem rank among your priorities? Find out if your solution is something they’d implement immediately if resources allowed.

• What other priorities might take precedence? This helps gauge if your solution could get sidelined by more pressing issues.

Current Solutions

• How are you addressing this issue now? Understand the workarounds or solutions they currently use, even if they’re imperfect.

• What do you like and dislike about your current solution? Identify gaps and opportunities for improvement.

Active Search for Solutions

• Are you actively seeking solutions? Determine if they’re searching for answers or merely open to suggestions.

• What solutions have you considered or tried? Learn about your competition and the criteria they use to evaluate options.

Concerns and Barriers

• What concerns do you have about implementing a solution like ours? Identify potential objections or hurdles that could affect adoption.

• What past experiences influence your perspective? Previous successes or failures with similar products can shape their openness to new solutions.

Value Perception and Metrics

• How do you measure the value of a solution? Understand the metrics they use to evaluate success and ROI.

• What results would make this solution worthwhile? Align your value proposition with their expectations and benchmarks.

Decision-Making Process

• Who are the decision-makers? Identify key players in the purchasing process, especially in B2B contexts.

• What’s the typical approval process for solutions like this? Understand the steps and timelines involved in securing a purchase.

Pricing Preferences

• How do you prefer to pay for solutions? Explore whether they favor subscription models, one-time purchases, or usage-based pricing.

• What pricing models have worked well for you in the past? Use this insight to tailor your pricing strategy.

Aligning Solutions with Customer Needs

After these conversations, you should have a clearer picture of whether your solution meets a real need and how it aligns with customer expectations. If the feedback suggests that customers aren’t eager for your offering, it’s time to consider a pivot. Adjust your solution or explore new avenues that address their top priorities.

Strategy 2: Testing Assumptions and Hypotheses

Assumptions can make or break a startup. Many founders operate under a set of beliefs about their market, product, or audience that haven’t been thoroughly tested. Identifying and testing these assumptions is crucial for validating your business model.

Identifying Core Assumptions

Begin by listing the assumptions that underpin your business model. These might include:

• Market Demand: The belief that there’s a strong need for your solution.

• Unique Value Proposition: The assumption that your product offers distinct advantages over competitors.

• Scalability: The expectation that your business model can support growth without unsustainable costs.

• Pricing Strategy: The idea that customers are willing to pay your desired price.

• Customer Acquisition: The belief that you can effectively and affordably reach your target audience.

Conducting Experiments to Validate Assumptions

Once you’ve identified your assumptions, it’s time to test them through experiments and research. Here’s how:

Designing Experiments

• Start Small: Begin with simple, cost-effective tests that provide quick insights.

• Focus on Key Metrics: Identify what metrics will confirm or refute your assumptions.

• Iterate Quickly: Use rapid iterations to refine your approach based on results.

Examples of Experiments

1. Minimum Viable Product (MVP): Launch a simplified version of your product to test demand and gather user feedback.

2. A/B Testing: Test different versions of your marketing messages, features, or pricing to see what resonates most with your audience.

3. Surveys and Focus Groups: Collect qualitative data on customer preferences, pain points, and expectations.

4. Landing Page Tests: Create landing pages to gauge interest and collect emails, even before your product is ready.

5. Ad Campaigns: Run targeted ads to assess the cost and effectiveness of customer acquisition channels.

Evaluating Experiment Results

When analyzing the results, keep in mind that you don’t need perfect accuracy. Instead, look for trends and patterns that either support or contradict your assumptions. If your assumptions are validated, fantastic! If not, it’s time to pivot your approach.

Key Metrics to Monitor

• Customer Acquisition Cost (CAC): Calculate the cost of acquiring a new customer and ensure it’s sustainable.

• Cost of Goods Sold (COGS): Ensure production costs align with your pricing strategy and profitability goals.

• Overhead Costs: Know what it costs to operate your business beyond the unit economics.

• Pricing: What are customers willing to pay, and will that cover your costs?

• Reachability: Can you reach your target customers at scale?

• Messaging: Will your target customers respond to your planned messaging.

Adjusting Based on Findings

If your experiments reveal that your assumptions don’t hold, be prepared to adjust your business model. This might involve changing your target audience, refining your value proposition, or exploring new pricing strategies. Remember, flexibility is key to finding a path that leads to sustainable growth.

Strategy 3: Conducting a Pre-Mortem Analysis

Most of us are familiar with post-mortems—analyses conducted after a project fails to identify what went wrong. While valuable, post-mortems occur too late to prevent failure. Enter the pre-mortem: a proactive approach to identifying potential pitfalls before they derail your project.

The Pre-Mortem Process

A pre-mortem involves assuming that your startup has failed and exploring why it happened. This shift in perspective encourages stakeholders to think critically about potential challenges and vulnerabilities.

Steps to Conduct a Pre-Mortem

1. Assemble the Right Team: Include key stakeholders such as co-founders, board members, advisors, and investors.

2. Set the Stage: Explain that the goal is to assume failure and explore its causes. This removes the stigma of negativity and encourages open discussion.

3. Individual Brainstorming: Have each participant write down reasons why the project might fail. Encourage them to think broadly and consider all aspects of the business.

4. Group Sharing: Go around the room, having each person share one reason at a time. Capture these on a master list, eliminating duplicates.

5. Prioritize Concerns: Identify the most pressing issues and those with the highest potential impact.

6. Action Planning: Develop a plan to address each concern. This might involve further testing, process changes, or strategic pivots.

Benefits of the Pre-Mortem Approach

Conducting a pre-mortem has several advantages:

• Encourages Open Dialogue: It creates a safe space for team members to voice concerns and challenges without fear of judgment.

• Identifies Blind Spots: The process surfaces issues that might not have been considered during initial planning.

• Fosters Strategic Thinking: It encourages proactive problem-solving and critical thinking, leading to more robust strategies.

• Enhances Resilience: By anticipating potential failures, your team is better equipped to navigate challenges and adapt as needed.

Turning Pre-Mortem Insights into Action

After completing the pre-mortem, use the insights gained to refine your business strategy. Consider the following:

• Reassess Assumptions: Validate assumptions that emerged as potential weaknesses.

• Strengthen Weaknesses: Implement measures to mitigate identified risks and bolster areas of vulnerability.

• Engage Stakeholders: Keep stakeholders informed about the steps you’re taking to address concerns and improve your business model.

Conclusion: The Power of Pre-Pivot Strategies

Detecting and addressing potential problems with your business model before you start building or selling your solution is a game-changer. By engaging with customers early, testing assumptions, and conducting pre-mortem analyses, you can navigate the complexities of entrepreneurship with confidence.

Remember, the goal is not to eliminate all risk—that’s impossible. Instead, these strategies help you manage risk and make informed decisions that increase your chances of success.

Embrace the process, stay adaptable, and keep learning. Every insight gained is a step toward building a resilient and thriving startup.

I’d love to hear from you! Have you tried any of these pre-pivot strategies? What challenges or successes have you experienced? Share your thoughts in the comments below, and let’s continue the conversation. And if you found this post helpful, subscribe for more tips on navigating the startup journey.

Until next time, Ciao! 🚀

NEXT: You might want to check out this article on the top ten reasons startups fail so you can work to avoid them!