Lean startup - what is pivot
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Lean startup - what is pivot






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    Lean startup - what is pivot Lean startup - what is pivot Presentation Transcript

    • Lean StartupWhat is Pivot? Yuki Sekiguchi
    • Pivot is a structured course correctiondesigned to test a new fundamentalhypothesis about the product, businessmodel, and engine of growth.→One of the core concepts of Lean Startup. “Pivot orPersevere” decision is made once the company getsthrough a Build-Measure-Learn feedback loop.
    • Companies that cannot bring themselvesto pivot to a new direction on the basis offeedback from the marketplace can getstuck in the land of the living dead.*The state where a company is neither growing enough nordying, consuming resources and commitment from employeesand other stakeholders but not moving ahead. It is a terribledrain of human energy.
    • A pivot is better understood as a newstrategic hypothesis that will require anew MVP (minimum viable product) totest. Successful pivots put a company on apath toward growing a sustainablebusiness.→Pivots are a permanent fact of life for any growingbusiness. Even after a company achieves initialsuccess, it must continue to pivot. Decision on whenand how to pivot cannot be made formulaically. Itrequires human judgment.
    • As a goal of a startup is to find a pathtoward growing a sustainable business,runway should be measured by howmany pivots a startup has left: thenumber of opportunities it has to make afundamental change to its businessstrategy.The startup has to find ways to get toeach pivot faster and cheaper in thatsense.
    • Many business books talk aboutimportance of pivot-like changes, but lackspecifics.With Lean Startup, the pivot is built in themethodology and processes. It is whatmakes the companies that follow LeanStartup resilient in the face of mistakes: ifwe take a wrong turn, we have the toolswe need to realize it and the agility to findanother path.
    • Sample Types of Pivots (1/4)#1: Zoom-in PivotWhat previously was considered a single feature in a productbecomes the whole product.#2: Zoom-out PivotWhat previously was considered the whole product becomes asingle feature of a much larger product.#3: Customer Segment PivotA company changes customer segment when it realizes thatthe product it is building solves a real problem for realcustomers but that they are not the type of customers itoriginally planned to serve.
    • Sample Types of Pivots (2/4)#4: Customer Need PivotA company changes product when it realizes that the targetcustomer has a problem worth solving, but just not the onethat was originally anticipated.#5: Platform PivotA changes from an application to a platform or vice versa.#6: Business Architecture PivotSwitching of architectures such as from high margin, lowvolume (primarily B2B) to low margin, high volume (primarilyB2C).
    • Sample Types of Pivots (3/4)#7: Value Capture PivotA company changes the way it captures value (i.e. Commonlyreferred to changes to monetization or revenue models).#8: Engine of Growth PivotA company changes its growth strategy (e.g. the viral, sticky,and paid growth models) to seek faster or more profitablegrowth.
    • Sample Types of Pivots (4/4)#9: Channel PivotA company changes the sales or distribution channels (e.g.from dealership sales to direct sales) when the same basicsolution could be delivered through a different channel withgreater effectiveness. (A channel often determines productfeature, price, and competitive landscape.)#10: Technology PivotA company provides the same solution by using a completelydifferent technology when the new technology can providesuperior price and/or performance compared with the existingtechnology. Much more common in established businesses.