Stage 4 of the journey and the hardest aspect of being in business. Knowing when to Pivot or Persevere - hard because we need to confront home truths - valuable because e preserve capital

2. Test and Measure –
To Pivot or Persevere

3. The goals of the
Bootcamp
• At the end of the six months to have
worked through the principles of the
book
• To apply many of them to real world
situations that apply to our own
businesses
• To embed some functions into your
activity that give you a cutting
edge

4. This book is for:
• Start-ups
• Stale businesses on the cusp of
adopting new ideas
• Existing businesses struggling with
growing pains
• Anyone who wants to learn about how
to develop their business

5. Mantra stands
Fail fast & Learn faster

6. Let’s Refresh ourselves on
some of what we have covered
• Most businesses fail because they build something
that no-one wants
• Failing fast means we preserve more capital and can
pivot more
• The currency of start-up is learning – validated
learning through a Minimum Viable Produce (MVP)
• Vision leads to steering
• Ideas and assumptions are not the same – Ideas have
embedded assumptions that need testing
• Finding the ‘Big Idea’ and testing it

7. The Goal this Morning
To go away with a set of tools and
thinking to help you to decide if
you should ‘pivot’ or ‘persevere’

8. Why this is important?

9. How and What to Test
Value & Growth

10. A new mindset

11. Reasons why we succeed

12. Research Shows
Bill Gross, Idealab, The single biggest
reason why startups succeed
https://www.hotjar.com/blog/the-passion-
fallacy?

13. Value – to whom?

14. PEST(LE)
• Political
• Economic
• Social
• Technological
• Legal
• Environmental

15. PESTLE - Worksheet
Political
Social
Legal
Economic
Technological
Environmental

16. TIMING

17. Customer Driven
Sustainable Growth
1. Word of mouth
2. Products that sell themselves
3. Paid for advertising
4. Repeated purchase

18. 3-Engines of growth
Sticky Engine of Growth – focus on &
measure:
1. Customer retention
2. Lifetime value
3. Look after the customers you have
before looking for new ones

19. Viral Engine of Growth – focus on &
measure:
1. Value creation
2. Brand and brand design
3. Match everything about your
product or service to your
customers
3-Engines of growth

20. 3-Engines of growth
Paid Engine of Growth – focus on &
measure:
1. Campaign costs
2. Conversion factors
3. Returns on Investment – don’t
make excuses for poorly
performing ads

21. What is your current
engine?
Take 5 minutes and look at the
worksheet
Think about your current engine of
growth – does it match the
aspirations of the business?
If you could change it – how would
you?
Make some notes and think about
some tactics

22. Lift-off or Fail

23. The ‘Runway’
Working Capital remaining divided by
the monthly spend.
RESPONSE
1. Cut back expenditure on costs
2. Raise more cash
Both actions result in a slowdown in
getting through the
Build-Measure-Learn
Loop

24. Focus on ‘Rapid
Testing’

25. Innovation Accounting
Engine of Growth
Registration rate (% of leads
who become prospects)
Activation rate (% of
prospects who do what you
ask)
Retention rate (% of Weeks
stay connected / 52)
Referral (% of existing
customers who bring in new
customers)
Revenue – as a % of total
Lifetime Value

26. Pivots take courage

27. Why?
Is your business on the
right road?

28. Don’t know?
Revert back to the
‘Vision’

29. PIVOT
Place one foot on the
ground for stability –
then turn!

30. Types of Pivot
1. Zoom-in: A single feature becomes
the whole product. Niche and
specialise
2. Zoom-out: A single feature cannot
sustain a whole product. Whole
product now becomes a single
feature
3. Customer segment: change of
customer in that the segment you
originally targeted are not the
ones you are serving

31. Types of Pivot
(cont.)
4. Customer need: the original
problem we were solving is now
less of an issue – so we develop
5. Platform: apps become websites
and vice-versa
6. Business architecture: high
margin – low volume becomes low
margin – high volume or vice-
versa

32. Types of Pivot
(cont.)
7. Value capture: a change in the
revenue stream. A movement away
from the exchange to long term
access
8. Engine of growth: a change in the
marketing strategy that moves us
from retention to viral
9. Sales Channel: a change in the
route to market. We stop selling
through an agent an go direct to
the customer

33. Types of Pivot
(cont.)
10.Technology: sustaining innovation
by switching the old methods in
with the new ways. A new CRM
system, an upgraded website etc.

34. 3 Reasons why we don’t
‘Pivot’
1. Vanity metrics – numbers that
simply confirm what we believe to
be true and of value
2. Lack of a clear hypothesis for
testing. We have growth,
customers seem happy etc.
3. Fear that the vision we have
shared might be wrong

35. 3-signs we should
‘Pivot’
1. Gut instinct – you fess-up to
that nagging doubt in the back of
your mind
2. A lack of ‘traction’ – customers
who don’t engage, don’t enthuse
and resist paying
3. Overwhelming interest in one
feature – and not the rest

36. Finally

37. To come
08 Nov 2016 – Root cause
analysis – The 5-Whys
13 Dec 2016 – The accelerate
through innovation

38. Any Questions?
Back on the 8th of November