Your Baby Might Actually Be Ugly. Time To Pivot?
I recall in my early entrepreneurial days reading that entrepreneurs were special individuals with a never say die attitude and an unwavering belief in their idea. Captain Kirk always appeared in my mind’s eye. Today I realize these are the traits of many failed startups.
Entrepreneurs are definitely special people. They generally see things other people don't, especially opportunity. That is to say, where most people would be satisfied to simply complain about a problem or ignore someone else’s complaint about a problem, the entrepreneur inherently sees this as an opportunity and runs with it, i.e., decides to build a company around it.
But this is where the "old school" entrepreneur gets snagged. They convince themselves they've unearthed an unsolved problem, write a business plan, supported by numbers they've found to valid their idea, spend months raising money, while burning through their own money and money from friends and family. Eventually they find an angel to invest. They convince everyone that although sales are slow they're on track for the main stream market, the real money. They are unwavering in their belief in the idea and will not quit, because that's what loses do. They refuse to hear that their baby is actually ugly (translation: their idea is not a sustainable business model) and continue to burn through the money until they fly the plane into the mountain.
I've learned that the true, i.e., successful, entrepreneur is actually someone who a) is the first one to point out that their baby is ugly and b) makes this statement as soon as possible. The true entrepreneur is also disciplined enough to get to this point without burning through investor dollars and has other incremental ideas of making the business grow or has a full blown pivot in mind (new business idea.)
We are currently going through this with one of our client/partners. The company came to us with the product largely built so all we had to do was apply the finishing touches and bring it to market. Sales have been very sluggish; none of the forecast has been met. So KENOVA proposed a market survey of the main problems solved by the software to understand their level of importance in the eyes of the target market. The results were very disappointing, only 29% of interviewees said that the software was addressing problems they cared about.
This explained the sluggish sales and also told us that the product was still at the early adopter stage so we were facing the chasm to the main stream. The founder is facing the fact that their baby is ugly and they need to make changes – more on this in the future.
So it’s crucial as an entrepreneur to not give up at the first sign of trouble, however, it’s also crucial for the entrepreneur not to persevere to death.
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