I find myself wondering why so many founders of great companies with fantastic ideas don’t make it. I see in daily life that many of the founders that I know are absolute pros in what they do. They know their own industry inside out. They know what works and what doesn’t. They have usually been in the industry that they work in for years or even decades.
Now, having this deep in the street knowledge can be both a blessing as much as a curse. If you truly understand it in the street you will probably strive for perfection of your product before launching it. The time to market for products made by industry specialists, is generally speaking far too long. Even if the perfect product does get finished, it is still hard for them to let go of the conventions that they think works best in their industry.
Most company founders who have started a new business focus very strongly on the end consumer and not so much on the business model itself. By business model I also mean the commonly used tools and conventions that applied to digital businesses, not just the financial business model but more the product/user flow and sales funnel. A classical lead funnel and sales funnel might not work in the exact same matter as it would in an off-line world.
Use the tools that industry specialists know
I have seen many brilliant industry leaders and specialists fail in their attempts to change a market. Simply because they did not use the tools right that were at their disposal. A product does not need to be perfect for you to start. But what it does need to do, is communicate your message clearly and explain your business model and unique selling proposition. When the potential customer has understood exactly what you want to sell it is imperative that you use the digital tools that he is used to.
When company founders and start ups try to impose their off-line knowledge on to a digital native customer, this generally backfires. What often happens is that they become blinded by the fact that they see that they can attract people to their site, but they don’t seem to convert. Often times the founders blame this on the end consumer. Where is they should’ve simply use the tools that are readily available to them.
A good first indication of this phenomenon are the bounce rates of new visitors. When these are relatively high, there is not necessarily a problem getting people to the site, but more in the way that the product is communicated and quite possibly how the sales funnel works. It is (usually) not a big problem to get the right people to your site, given performance marketing is done well. Yet, it can be a challenge to channel the user to your desired final conversion step.
Pivot & Focus on perfection when you’re done
In my opinion, a product is not finished until it works. This means that I need to be bold and brave if I want to make a change. I develop numerous digital products that did not meet the exact needs of my target audience. The first thing I tried to do was make small incremental changes to the product itself. However if this doesn’t always suffice.
When your conversion rates are not going in any type of direction, it is time to pivot.
It doesn’t mean that you need to throw everything away that you’ve done, but it doesn’t mean that you have to make some large adjustments. Maybe the elements are not in the right place on your website. Or you might not be communicating the correct proposition. Or your pricing might even be off. These are all things to consider depending on your business model.
Now when it turns out that nothing works at all, you might even have to start from scratch. As hard as this may sound this is generally a good idea. Now before making these big changes, the beauty of digital is that we can test things. So we set up dedicated a/b tests, with a common set of hypothesis. Your control product or landing page is the current product that you have. This is the one that you have put all your love and effort into.
Beware of the perfectionist in you
Now are often times happens is that the start up founders, expect the second product or second landing page that they’re testing to be exactly as beautiful as the first one. This is where the perfectionist in industry specialists comes in. I would urge any founder to try and let go as much as they can at this point. When you have gotten this far and you know that you need to change something, then don’t over engineer your product. Once you start to do this the second product will start to look a lot like the first one. If you would really like to make a change that would be bold, brave and beautiful.
There are a lot of different ways to get to your desired result. Incremental changes can be good, and you should definitely not to change the winning team. However, I personally think that you need to continue to pivot until you have reached profitability. Incremental changes are something that you do at the end to perfect your product. If you would like to make a big leap forward you cannot get too attached to the product that you initially created. This is probably the hardest part of being a digital entrepreneur.
I personally believe that you need to continue to pivot until you reach profitability
This phenomenon for me personally is one of the biggest challenges of digitalization. Not only do we need to give people the tools to develop their business model, but we need to educate them on how the world of digital works as well and teach them how to pivot at the right time. Those industry specialists who are open to learning and listening to other a new opinions and approaches will be more likely to succeed.
If you would like to find out more about this approach and how we work, please feel free to contact us at anytime. I’m looking forward to your ideas and views as well.