How do you decide when to pivot or persevere with your product idea? This is one of the most challenging questions that product managers and entrepreneurs face. In this article, you will learn some practical tips and frameworks to help you make this crucial decision.
One of the most popular methods to validate product ideas and assumptions is the lean startup approach, pioneered by Eric Ries. The core idea is to build a minimum viable product (MVP) that delivers the most value to your target customers with the least effort and resources. Then, you measure the results and feedback from your MVP and learn from them. Based on your learning, you can either pivot or persevere with your product idea.
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I agree. I’m fact all new product should have a MVP in the development plan. A MVP will help to develop a robust requirements/specs but also also uncover any product developmental challenges.
A pivot is a change in strategy or direction based on what you have learned from your MVP. A persevere is a decision to continue with your current strategy or direction based on what you have learned from your MVP. How do you decide which one to choose? Ries suggests a simple framework: ask yourself three questions. First, do you have a problem worth solving? Second, do you have a solution that customers want? Third, do you have a viable business model that can sustain and grow your product?
And often, we can reasonably answer these three questions by building low code or no code prototypes and testing them on real customers quickly and cheaply. Then we start the build - measure - learn loop again.
The first question is about finding the problem-solution fit. This means that you have validated that your product solves a real and important problem for your target customers. You can use various techniques to test this, such as customer interviews, surveys, landing pages, prototypes, or experiments. If you find that your problem is not worth solving, or your solution is not effective, you may need to pivot to a different problem or solution.
The second question is about finding the product-market fit. This means that you have validated that your product meets the needs and expectations of a large and profitable market segment. You can use various metrics to measure this, such as customer satisfaction, retention, referral, revenue, or growth. If you find that your product is not appealing or competitive enough for your market, you may need to pivot to a different value proposition or customer segment.
The third question is about finding the business model fit. This means that you have validated that your product can generate enough revenue and profit to cover your costs and achieve your goals. You can use various tools to test this, such as business model canvas, lean canvas, or financial projections. If you find that your product is not viable or scalable enough for your business, you may need to pivot to a different revenue stream or cost structure.
If you decide to pivot, you need to identify which aspect of your product idea needs to change. Ries proposes 10 types of pivots, such as zoom-in, zoom-out, customer segment, customer need, platform, business architecture, value capture, engine of growth, channel, or technology. For example, Instagram pivoted from a location-based app to a photo-sharing app (customer need pivot), Netflix pivoted from DVD rental to streaming service (technology pivot), and Airbnb pivoted from couchsurfing to home rental (customer segment pivot).
Only through testing with users quickly with a proof of concept will you assess whether they want it and be willing to pay for it. If you can't find anyone to buy the product it's time to pivot quickly to next idea. Likely it's either the lack of market need or the marketing aren't serving you well on your current product.
How do you know when to pivot? There is no definitive answer, but Ries suggests some criteria, such as running out of time, money, or passion, facing insurmountable obstacles, or seeing diminishing returns. How do you pivot effectively? Ries suggests some steps, such as defining your hypothesis, designing your MVP, running your experiment, analyzing your data, and making your decision. The key is to pivot based on evidence, not emotions, and to communicate clearly and transparently with your stakeholders.