Pivotal Failure - Lessons Learned from Lean Startup Machine DC
Pivotal Failure A case study by ArrgyleWe focused on small businesses and recommending third-partysoftware solutions to help them solve un-met business problems.Based on customer and mentor feedback, we have learned thatthis business is not sustainable in its current form.
Validated Learning1. Businesses admit there are problems within their business they are not aware of.2. They believe technology could potentially help them realize and solve these problems.3. They value money over time.4. They say they would sign up for a free or cheap service based only on web content if it was relevant to solving a business problem.
It’s a Numbers GameCreating a recurring revenue stream is difficult because itrequires volume and demand.In order to gross $250,000 in a year, assuming a 2%conversion rate, we would need to put our product infront of over 450,000 small business owners. The expenseof this exposure is not cost effective.
SummaryThrough the lean process, we have determined which ofour assumptions are accurate and which are inaccurate.Because of this we have learned that our model is flawedand will require us to pivot. If it weren’t for the LeanStartup Machine, this might have been a very expensiveerror.We wish we had started with this idea on Friday so wecould have pivoted during the event. Thank you LSM forall your help!