After you finally accept that you must change business direction in order to survive (that’s the previous post), when should you start that process? Immediately? Yes.
But that doesn’t mean you pull the plug on current customers immediately, or you instantly cease your current operations. Perhaps in some cases this is necessary. In our case, not so much.
While we clearly saw the winds shifting and our current market stagnating, we knew that keeping the current revenue stream alive extended our runway. This is startup lingo for keeping more cash in the bank so that you can keep the doors open longer.
What we’re getting at here is that phasing into your pivot over time has a few advantages.
- Keep current revenue flowing to fund product development.
- Use current customers for customer research on the new product and direction.
- Use current / previous customers as your new prospect base.
Here’s the academic way to describe this, penned by Ron Adner in this Harvard Business Review article. The ecosystem carryover: “using existing positions in existing market spaces to jump-start a winning position in a new market space”.
Of course, a phased pivot poses a serious risk: Holding on for too long when you should be letting go. Perhaps you should hold on loosely, but don’t let go. If you cling too tightly, you’re gonna lose control.
What better way to start the weekend than with a dose of 38 Special’s classic rock brilliance?