So, you failed. Now what? Pivoting to success
SO, YOU FAILED. NOW WHAT? PIVOTING TO SUCCESS
How a difficult decision to change our approach forced us to improve and rethink our strategy.
A short story about Lizer Group and how a Swedish startup disrupts e-commerce sales.
“How do you eat an elephant? One bite at a time.” Lesson learned.
It is possible that you will have heard by now that running a startup is completely different from running a normal business. If you’re familiar with the world of entrepreneurship, you probably know that a startup is a fast-growing organism that mutates quicker than any competitor in a market where you can expand rapidly and grow from 1 to 100 000 in a matter of days.
Nevertheless, startups are not overnight successes. Even when you read news stories about the next big thing, it is almost always based on at least several months (or even years) of 24/7 work, no sleep, no salary and no consistent pat on the back indicating what great work you are doing. It is only you and your teammates that have to stick to your vision and believe in the solution you are building.
If you have an amazing solution to a huge problem, every now and then you might have stories published about what you are doing, which undoubtedly feels great. We were named one of the world’s 20 hottest startups by CNBC and that was a true energy boost; it gave us wings and made us dream of flying. Someone else apart from us believed in our idea. And it wasn’t just “someone else”, it was CNBC.
So, what is this idea that earned us a spot on that list? Pricelizer, a consumer solution in the form of an app, allows consumers to get personalized alerts when the price drops on products they find online and save to the app. Essentially, we help consumers become aware of the time when the things they like drop in price. And the good news is that it works for all e-commerce sites. Pricelizer
What we learned from this is that we are on the right track and that we have built an impressive backend/tool/method/approach which in a unique way builds insight into consumer behavior and the psychology of online behavior. Which has been proven many times over is totally different from how you act in a normal brick and mortar store.
Everyone we talked to loved the idea and could not wait to get their hands on the app. Now, here comes the interesting part: what people say is not what people do. What a shocker, right?
Turns out, the average consumer has very low tolerance for things that do not work as they expect it to. Their expectations are set by the patterns they observe in all the other apps they use. Consider if something doesn’t work the way you’re used to things working; you’ll soon give up.
If you’re thinking you could be the one to change this, bear in mind that changing customer behavior without providing any incentives will be incredibly hard. This is where viral strategies start to make sense. They are efficient because they provide examples to follow: if you see something trending or if some of your favorite celebrities are all doing this new thing, you naturally want to jump on board and join in the trend.
We had an app that wasn’t exactly intuitive to use and on top of that, our marketing strategy was by no means a viral campaign. Unfortunately, as we are all painfully aware of, two wrongs don’t make a right.
Like a true startup, we thought we had been doing MVP (Minimum Viable Product) releases, all in an attempt to better understand the customers and figure out where we fit on the market.
The formula for such an attempt is rather complex: one has to choose between targeting clients in urgent need of our product, focusing on low-competition parts of the customer base, aiming to release the product in the fastest growing e-commerce countries or picking places where we release our product purely based on the languages spoken, etc. The list goes on and you must come up with your own formula, which specifically fits your business idea.
We launched a Swedish MVP of Pricelizer (our B2C frontend) which, as we learned later, had way too many features to be called an MVP in Silicon Valley. This is when we realized we had spent far too much time working on the product and not enough on testing it with the help of our customers. The plan had always been to test after each new feature, but we got excited and kept building without checking in with our potential users.
It goes without saying that we learned a lot from this first stage; by looking at what worked and what did not work, talking to users, gathering valuable feedback and looking at our offer from a logical approach instead of from a startup approach, we considered how users were using Pricelizer and how they shop online. This made it possible for us to find patterns in customer behavior which we realized could help e-commerce sites transform their visitors into customers. With that in mind, we moved on to a slightly different idea.
How we felt about it
In Sweden, changing your original idea is often perceived as failing. However, in the startup community this is different: pivoting, or changing your original idea, is the most efficient way to improve your business once your product hits low performance. When we had our office in Silicon Valley, we learned many things about how to build a faster moving and rapidly growing organization and one of those things were “fail fast and fail forward” basically don't spend too much time doing something that eventually fails. Better get feedback and knowledge about how your audience acts about the product in reality and using the failures as stepping stones to reach your goal of success.
“The difference between average people and achieving people is their perception of and response to failure.”
Making the tough decision to change the product you offer, which in our case meant switching from a B2C mindset to a B2B one, is undoubtedly challenging. As if on cue, you start to question yourself and your idea; while you are at it, you might as well start questioning the entire world.
Been there, done that. And it does feel like the end of an era. Nevertheless, amidst all the sadness and the disappointment, you can now find, separate from the rest and extract broader knowledge and deeper understanding of your product. Finally, a silver lining. This is something you could not have even dreamed of having when the idea first popped into your head, because what differentiates you from who you were back then is that now you also have the experience to manage this newfound knowledge resource.
Maturing this way is a natural part of the process: you now know more about your area of business and your competition because you have observed your product’s behavior on the market and because your customers have shared valuable feedback with you.
Exactly at this point, it is crucial not to be frightened of change. In fact, scrap that. Be frightened, because it is not small tweaks that are coming your way; I am talking about major strategic changes. Be frightened, but do not let fear stop you from leveling up the way you think about your idea.
You will feel like you are abandoning something very close to your heart, consider yourselves warned. You will quite plastically feel like you are leaving your baby behind, but by no means is this about not believing in what you do. Think of the process of pivoting as a new yoga pose for the product: you build on previous practice, but you shift towards the next level, towards something even more rewarding.
But boy are we getting better!
With this mindset and with everything we had learned from our Pricelizer adventure, we decided to focus on the B2B segment.
It was clear what we had to do. We took our proprietary price monitoring algorithm and pivoted this into an MVP product for online stores and named it Store Clerk. It was a very small, low-hanging fruit, type of MVP tool but which collects customer information in a smart and powerful way.
This time we actually did it right. We WERE quite embarrassed by our first release but it gave us the opportunity to interact with customers to find out what features they really wanted, not what we believed that they should want. Since then, Store Clerk has been improved beyond recognition, but we always try to remind ourselves not to work too much on features before testing it on customers.
In a Store Clerk-empowered store, you can select at what price a product would be of interest to you and then share your contact details with the store. It’s done with 2 clicks and you have now configured a price alert running in the background which you never need to think of again. Store Clerk will alert you when the price reaches your target so that you can buy the product when it fits your budget.
At the same time, the merchant collects a wealth of important pricing data. They learn what products the visitors are looking for and at what price they would be willing to buy it. Most importantly, stores can finally collect the contact details of some of the 98% of their visitors that never buy from them. This and much more are provided in a tool that takes less than 30 seconds for a merchant to install.
Store Clerk was released a few days before Christmas Eve and has been on a frenzy ever since. We have thousands of users already and the stores can now convert visitors into customers when they use the automatic price drop feature. They also attract new customers because, with this tool, they improve their offer for the customers.
What we’ve learned
We meant for this to be a way of sharing what we’ve learned over the last few months. Now we know (and understand, too!) that a startup should always work with the top priority task, be it getting more users or more funding or whatever it is that you need at that exact moment. Improving all other things can happen later. Focus on your number one priority, right now.
The second thing is that you should update the priorities all the time. If you’re in a startup, things are very likely to move like crazy and you have to move with them. Stay anchored in the present, identify your priorities for today, not for this year.
We failed because we focused on making everything perfect in the way we envisaged our app, instead of constantly checking in with the users. Make sure your incremental improvements quickly go through the user filter. Oh, and good luck!
Feel free to reach out to me, share the post, like it and/or write a comment. The intention with this is to inspire and share our experience with you and everyone else that could get value from it.
I hope this article gave you the insight to help you get started on improving your conversion, and that you found the answers you were looking for. I am here to help you so don’t be shy just reach out to me and we can have a chat about your current situation.
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About the author:
Karl Lillrud is a serial entrepreneur with 21 years of experience from this segment. Founder of one of the first interior design e-commerce sites in the Nordic countries where he back in early 2000 learned about the many challenges that e-commerce struggle with even today.
That's why Karl decided to help companies overcome these hurdles and focus on what matters most, keeping customers happy and helping the companies improve their market position. Being a public speaker and entrepreneurial mentor Karl love to share his experience and knowledge with the one goal to help others reach their success easier and faster.
