How can you determine when to pivot or persevere with an R&D project?

As a product manager, navigating the world of R&D can feel like walking a tightrope. You're constantly wrestling with the question: do we double down on this project, or is it time to cut our losses and shift gears? Here's my take on making that call: Signs it's Time to Pivot: Market Miss: We've been laser-focused on building a product, but the market just isn't there. User research consistently reveals a lack of interest, and competitor analysis shows we're not offering a unique value proposition. In this case, a pivot might be necessary to find a new problem to solve. Technical Roadblocks: The core technology behind the project is proving much harder (and more expensive) to develop than anticipated.

Most of the time, you’ll immediately go to product-based research, but R&D can (and should) be so much more than that. There are myriad aspects of your business where innovation will make a huge difference, not only with your products and services, but also in more broad terms, such as the efficacy of your customer flow and systems that can help your business run more smoothly. At the end of the day, R&D is about taking what you have and doing the necessary research to enhance capabilities and be more efficient, and that is important to all business owners, regardless of company size or industry.

One of the primary challenges in R&D is balancing the exploration of new ideas with the exploitation of existing ones. Exploration involves generating and testing hypotheses, while exploitation entails refining and scaling solutions. Both are crucial, yet they demand distinct mindsets and resources. At times, initial hypotheses may prove incorrect, or solutions may lack viability or desirability. In such instances, a decision must be made whether to pivot or persevere. A pivot involves strategically changing direction based on feedback, while persevering entails committing to the current course based on validated feedback.

Pivot or persevere dilemma in R&D projects hinges on continuous evaluation of progress against predefined success metrics and market feedback. In this case, projects must be evaluated in terms of milestones, user engagement, and feedback to know if achieving what was planned at its inception is still possible. Regularly examining key project milestones, customer involvement and feedback can help show whether original assumptions and objectives are still valid. The data may indicate that the project is not achieving its goals or that the market requirements are changing; this would be an indication for a pivot. Conversely, if progress aligns with the project's goals and there is favorable market feedback, staying on course is preferable.

Embarking on this decision requires a deep understanding of not just where you are but where you aspire to be. In my years of steering projects through turbulent waters, I've learned that the essence of this dilemma boils down to vision and courage. It's about having the vision to see beyond the immediate hurdles and the courage to make tough calls. Embracing this dilemma as an opportunity rather than a setback has been a guiding principle in my journey.

The lean startup approach, pioneered by Eric Ries, is a widely embraced framework for R&D decision-making. It revolves around the concept of constructing, gauging, and learning from a minimum viable product (MVP). The MVP represents the most basic iteration of your product capable of providing value to customers and validating assumptions. Through the MVP, you can assess customer reactions and discern effective strategies. This insight enables informed choices on whether to pivot or persist with your product based on acquired knowledge.

The lean startup method highlights the value of building, measuring and learning as a cycle in order to inform when to pivot or persevere. This means creating an MVP to test the project’s hypotheses quickly in real markets. Analyzing data from the MVP will tell you if your target audience’s needs are being met by it. If there is a wide divergence between what the market wants and what you have produced, then it may be necessary to opt for a new direction. If your hypotheses are validated by the evidence, keep improving and evolving the product through iterations.

Most of the time, you’ll immediately go to product-based research, but R&D can (and should) be so much more than that. There are myriad aspects of your business where innovation will make a huge difference, not only with your products and services, but also in more broad terms, such as the efficacy of your customer flow and systems that can help your business run more smoothly. At the end of the day, R&D is about taking what you have?and doing the necessary research to enhance capabilities and be more efficient, and that is important to all business owners, regardless of company size or industry.

So many of the best products I've seen initially started out in Google Sheets. Something as simple as that can determine whether your customers will find the results useful or not. If it's not buildable in a spreadsheet, you can go even simpler. Send out cold communication to existing or new clients where you offer your solution. If it attracts attention and you start getting replies/meetings booked, it's a good sign to pursue it. You don't need a completed, or even near-completed product to get the green light you're looking for.

The philosophy of the Lean Startup, with its emphasis on agile development and customer feedback loops, has been a lighthouse in the fog for many of my projects. It taught me the invaluable lesson that every iteration, every feedback cycle, is a stepping stone towards clarity. The key lies in learning fast, adapting quicker, and recognizing that each loop is a chance to edge closer to a product that resonates deeply with your users.

The lean startup approach employs the innovation accounting method as a tool to measure and learn from feedback effectively. This method entails tracking and assessing the advancement and efficacy of R&D projects through metrics and milestones. It encompasses three fundamental steps: defining the value hypothesis, establishing the baseline, and setting up learning milestones. The value hypothesis constitutes the assumption that the product will generate value for both customers and the business. The baseline denotes the current status of key metrics like customer satisfaction, retention, and revenue. Learning milestones encompass the objectives and experiments intended to evaluate the value hypothesis.

Innovation accounting has allowed me to translate vision into actionable insights. By setting milestones that act as beacons of progress, my teams and I have navigated through uncertainty with a clearer sense of direction. This method is not just about tracking progress—it's about defining success in a landscape where traditional metrics fall short. It's a testament to the belief that every challenge surmounted enriches our understanding and every milestone achieved is a celebration of perseverance.

Build a clear strategic framework Assign a dedicated R&D team to manage the strategy. Have a proper test environment. The final step in determining the effectiveness of your R&D program is making sure you have the right test environment.

Understanding the nuances of pivots—whether zooming in on a feature that's capturing the user's imagination, zooming out to see a bigger picture that we might have missed, or shifting focus to a new customer segment—has been crucial. These pivots are not admissions of defeat; they are bold declarations that we're on a relentless quest for excellence. Each type of pivot has taught me that flexibility in approach and steadfastness in vision are not contradictory but complementary.

Often, R&D projects start to create a proof of concept and work on it to define a minimum viable product. Once the minimum viable product is tested to find product-to-market fit, there may different scenarios when the pivoting strategy would be applied accordingly. ?Market Feedback ?Product Market fit analysis ?Competitors landscape and offerings ?Strategic alignment ?Iterative R&D experimentation

Best practices in this realm are anchored in transparency, communication, and an unwavering commitment to the team's north star. Keeping the team aligned, motivated, and engaged through the highs and lows of this journey ensures that whether we pivot or persevere, we do so as a united front. Celebrating every small win along the way builds momentum and fortifies our resolve to navigate the challenges ahead.

Pivot when: - The market has shifted significantly. - A better solution emerges. - Your core concept needs major restructuring. Persevere when: - You have promising early results. - The initial challenges are surmountable. - Pivoting would be too costly or time-consuming. Remember: Agility is key. Be data-driven, adjust when needed, and keep propelling your R&D forward!

I would recomment to consider the following best practice arrow heads: ?Continuous market feedback ?Findings from industry analysts ?Client feedback at every stage ?Cross functional feedback and refinement ?User Testing

?? I faced this decision during the development of a new cabinet door hinge system. ? Initially, our team encountered challenges with the initial design, including durability issues and production complexities. ?? Despite setbacks, we persevered by refining the design based on user feedback and conducting additional testing to address durability concerns. ?? However, after thorough evaluation and market research, we realized that the concept didn't meet market demands and decided to pivot. ? We shifted focus to a different hinge mechanism that better aligned with consumer preferences, leading to a successful product launch and market acceptance.

An actual R&D project may be impossible or not technically or financially feasible to complete. However, you don't know until you try it in practice for a while, find roadblocks, or become able to quantify the actual costs. In that case, desist and pivot. Even if technically possible, you may launch a beta or MVP and discover that no one wants the product. Without customers or market, desist and pivot. Finally, it could be that, unbeknown to you, a competitor was also preparing a similar product that was launched as a surprise, making your offering less unique and perhaps more expensive. Competitors are a good sign, it means there's a market, so try to win the competition.