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Lean methods & approaches to running a Startup – part 4

startupSo far we’ve learned some insightful things about what it takes to build a successful startup using the Lean strategy.  Instead of pouring time and money into product development in hopes that your idea will pay off, you build an MVP – a landing page, an email, a spreadsheet – to showcase your vision. Then you “get out of the building” to gather feedback. Through this investigative process, you’ll begin to find out customer pain points and hear their stories. As you go out and conduct interviews and gain insights about customer behaviors, you’ll be better positioned to build a product that provides immediate value for them.


However, at some point in the Lean iterative process you will need to learn whether to “pivot” or persevere, whether to change course or stay the course. Let’s build out these points further.


Learn When to “Pivot”


The last component of the “Build -> Measure -> Learn” feedback loop involves taking the insights learned from your early customer testing experience and making quick, agile changes to your product to reflect what the customer wants, not what you think they need. This experience is known as the “pivot.” Unfortunately, no simple set of tools can adequately predict whether you should pivot or not since the process really depends on a multiple set of factors based on your particular business and industry.






As Eric Reis spells out in The Lean Startup, the pivot is a “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” You have a basic MVP of your business idea, you’ve taken it out of the building and have explored the customer landscape through interviews, observations, and other forms of feedback in order to validate your original hypothesis. While you were certain customers would want Widget A, in reality your field research shows that they’re really interested in Widget B. So what now? At this point, it’s time to face reality about the path you’re following.






When to stay course or shift course? This is the $64,000 question and the difficulty here is that we’re all by nature fairly poor and biased judges of whether things are going well or not. Reis points out that most entrepreneurs who pivoted wished they had done so earlier; the problems may be due either to the difficulty of unhinging from false conclusions or following an unclear hypothesis that is then almost impossible to invalidate, or else even an overriding fear of failure in general.


While there is no hard and fast rule on when to pivot or not, one writer has given expression to this conundrum very succinctly as follows:


So the key test is: have you persuaded a new investor, new employee, or new client, with no historical relationship to your business, to invest time and/or money in your firm? If so, that’s a sign that your business is likely worth persevering with in its current form.

If three months have gone by and no new investor, employee, or client has joined you, that’s probably a sign you should pivot (if you have cash left) or shut down (if you don’t).


In a nutshell, business reality is often reflected best through what others are saying and seeing and whether they would be willing to join your cause.


As we’ve seen in the foregoing, no hard science exists that can tell us whether to change course (pivot) or stay the course. Since we all tend to see things more optimistically than they really are, the best rule is to get an outside perspective; if after 3 months no new entity has joined your cause then it’s time to pivot!


In the next and final part of this segment we’ll review what we learned so far and crystallize a set of key takeaways for how to achieve business success with the Lean Startup strategy.


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About Jeffrey Walker

Jeff is a business development consultant who specializes in helping businesses grow through technology innovations and solutions. He holds multiple master’s degrees from institutions such as Andrews University and Columbia University, and leverages this background towards empowering people in today’s digital world. He currently works as a research specialist for a Fortune 100 firm in Boston. When not writing on the latest technology trends, Jeff runs a robotics startup called virtupresence.com, along with oversight and leadership of startuplabs.co - an emerging market assistance company that helps businesses grow through innovation.