Your startup journey will be filled with dead ends, false starts, and long treks down the wrong path. When it’s time to pivot, there are two traps to avoid.
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When you closed your last round of funding, you had a plan for what happened next. You had a strategy for growth. You knew what key milestones you needed to hit. You had a clear path to your next fundraise, at a higher valuation, with a cash buffer in place just in case things didn’t go exactly to plan.
And now, 12 months later, it’s clear things are not going exactly to plan.
Your sales growth may have slowed. Perhaps customer retention and lifetime value are slipping below your targets. Customer acquisition costs can explode, leading to accelerating cash burn.
The definition of insanity is doing the same things over and over and expecting different results. There may come a time when you realize that you’re past the point of iteration and incremental improvements in your products or process.
It’s time to pivot.
One of the most complex leadership challenges a founder will grapple with is implementing significant shifts in team or strategy when it’s clear your original assumptions aren’t delivering the expected results.
There are two traps to avoid when trying to change the course of your startup.
First, don’t change too many things at the same time in a frantic effort to accelerate the impact. I’ve seen founders simultaneously try to make changes in critical leadership roles, product strategy, and sales channels. You risk sowing confusion across the company and hurting execution at a crucial time.
It’s also important to recognize that not all of your changes will be right the first time. When you change too many variables simultaneously, it can be impossible to figure out what changes are working versus those that need further refining.
Second, avoid the trap of impatience and the resulting constant course correction when you believe the change you seek isn’t coming fast enough. New hires take time to settle in to make an impact. Products take time to find product-market fit. Shifts in sales channels and customer acquisition strategies need to be slowly dialed in and constantly tested to find the truly scalable path.
Constant pivots in strategy will only serve to frustrate your team and shake their confidence in your leadership. And you’ll likely find yourself no closer to the answers you seek.
You increase the risk of falling into these traps when you don’t leave yourself enough runway to thoughtfully make big changes and the small adjustments that inevitably follow. Act early and decisively when it’s clear your initial assumptions are wrong.
If your runway isn’t long enough to carefully step through a process of change, deal with that problem first. Shut down unproductive initiatives, find your stop doing work, and reduce your monthly burn. Choose the one or two areas that represent the greatest opportunity for short-term ROI, and focus your change efforts there. Rack up some small wins that might support a bridge round if you need additional cash.
Your startup journey will be filled with dead ends, false starts, and long treks down the wrong path. It’s inevitable, and it’s not a sign of failure. Be prepared for this scenario, and approach the process of change carefully and deliberately.