5 Signs That It’s Time for Your Hyperlocal Company to Pivot
The majority of hyperlocal startups will pivot at least once in their lifetimes. Many will pivot two or even three times. But as a founder who’s looking to steer his or her company in the right direction, it can be difficult to determine whether to keep plowing forward with an original concept or change course and go a new direction.
Although Yelp, PayPal and Twitter are often mentioned as tech companies that pivoted their way to success, it’s not easy for founders to give up on the ideas they’ve been dreaming about for years, especially when it’s still possible that success could be right around the corner. Here are five signs that it’s time for your hyperlocal startup to pivot, from industry leaders who’ve been there before.
1. Customers are using your product for unintended purposes. “When your target customers aren’t using the product in the way you designed it, it’s time to pivot. If you designed your product to solve problem X and they are using it to solve problem Y, then it’s probably a good idea to turn your attention to problem Y and ask why they are using it that way. That’s how we at Seconds went from mobile food ordering to simple mobile payments.” (Nick Hughes, Seconds)
2. Key performance indicators aren’t improving. When your main KPIs are not improving, it’s time to pivot. There’s no “formula” for this — KPIs are mainly linked to repeat usage. That has not so much to do with marketing — which is what you do if you want to scale your business — but more to do with the real added value that you product has for individual users. If you have made a number of iterations and you see that these are not really changing, you should know that you are entering the land of the living dead.” (Quintin Schevernels, Layar)
3. People around you are having problems with your product. “Listen to everyone around you — your team, advisors, beta customers and VCs, and basically anyone that will give you unbiased feedback. When a specific topic of your business or product is constantly coming up, that is a sign of where you need to focus your attention. What are people not getting or why are they blocked? Launching a company or product is hard enough, if the people right in front of you are getting stuck somewhere, people you don’t know will undoubtedly get stuck too.” (Tony Longo, CO Everywhere)
4. Acquisition outcomes have gotten unpredictable. “It’s time to pivot when you are having a very difficult time meeting your customer acquisition goals, or predictably adding new customers onto your platform. A clear sign that you haven’t met product market fit yet is when there’s no obvious predictable and repeatable customer acquisition outcome. For example, spend $2 in marketing and bring one new customer onboard; spend $4 in marketing and bring in two new customers, and so on.” (Nick Hughes, Seconds)
5. If you’re going to fail, do it fast. “Learn how to fail. When you try something, try to figure out whether it’s sticky right away. We were able to identify that the platform we were building wasn’t getting a lot of traction. We saw that right off the bat. You really have to have a culture of failing fast in your organization. It’s important to get everybody on board, including people who are building and marketing the solutions in your company. People get attached to their work — especially if you’ve got a good company and you’ve got good people who really care about their work — so it’s not easy killing a project.” (Jeff Tomlin, VendAsta)
Interviews have been edited for length and clarity.
Stephanie Miles is an associate editor at Street Fight.