Working with one start-up company was extremely painful. The company management was dead set on a single ecommerce vision and strategy. Ultimately, as we did market research and tried to validate the product/market fit, it became pretty clear that not only was the strategy wrong, but possibly even the vision wasn’t right.
The challenge was, at the time, this category of startups—e-commerce—was red hot. The approach the company was taking was to replace an old-style communications network used in many industries with the Internet. At first blush, the vision and strategy sounded great. It was what had been pitched to all the investors and they bought into it hook, line and sinker. (Reminds me today of some of the bizarre social start-ups, now that “social” is hot.) But the reality was that the applications used in this space were so “wired” into the old-style network, that replacing the network meant replacing all the apps at the same time, something that was not going to happen any time soon. It took years to get these systems in place and pouring the new wine of the Internet into the old bottles of the backwards networks just wasn’t going to happen in this start-up’s lifetime (which turned out to be pretty short).
Because of the commitment to this hot space, and the strategy that was communicated to the investors, it was difficult to get anyone within the company to think otherwise. When the research started throwing up all kinds of red flags, management did nothing. The company was in desperate need of a major pivot. The strategy needed to be abandoned for one that could solve real problems in a reasonable time. Potentially, the company could have continued to work in the e-commerce space (the vision), but with a new strategy.
As I look back, this was a classic example of trying to shoe horn a technology solution round peg into a square hole market. In these kinds of scenarios, which really are not all that unique, it is critical that management bite the bullet early on and begin evaluating pivot options. Company leaders need to be willing to pivot and pivot and pivot again if necessary until a real product/market fit can be determined.
The sad thing is the company had raised a reasonable amount of money, had built a good team, but it lacked the knowledge that pivoting is not only critical but normal, and willingness to make a change when necessary. Even if meant going back to the investors and explaining the situation and new direction.
With successful pivoting, the company could have potentially found a strategy that could have worked. Of course, there are many other things that would have been required to be successful. But at least it would have had a fighting chance. As such, it didn’t go very far without pivoting.