The Blue Sky Week
Part 4 of a continuing series for entrepreneurs and investors sharing diverse perspectives on a successful business pivot.
With much uncertainty, the team decided to come up with a strategy to see what they could do to salvage all the hard work they had invested into building YUPIQ. They established a timeline – one week to pivot.
“Because we felt like there was nothing to lose, we didn’t really hold back at all. It was more try something or it’s over.” -Mike Doyle, YUPIQ marketing and product design/Product manager at Referral SaaSquatch
Day One consisted of focusing on the problems. The entire team sat down and pinpointed the weak points of the company. They discussed the problems in very frank and honest terms. Afterwards, every single member of the eight-person team self-assigned themselves areas to perform market research in for potential ideas that would help them solve the issues they were facing.
“We knew we missed the market. We knew we had some problems in the business and we weren’t making progress. I think everyone knew that.” -Torben
Day two was split up into three phases. Phase I consisted of each team member pitching ideas – no questions, no critiques. It was an open-minded listening session: Here’s what we have, and here’s what we can become. Once the various ideas were reflected on, phase II took place. Each presenter was questioned about their ideas and concepts. Finally, once everyone was satisfied that they fully understood each of the ideas, the team entered phase III. At this point, ideas and assumptions were critiqued and suggestions were given to see what improvements could be made. Finally, the team split into working groups, tweaking ideas, and pitching them to the whole group once more.
Two principal proposals emerged from this process. The first was based on YUPIQ’s existing premise, adjusted to create an in-product customer referral program that closed the referral loop by rewarding users that made successful referrals. The second was to build a referral program for ecommerce companies.
“We split into two groups. One group was focused on trying to save YUPIQ and the other was trying to come up with something new.” -Valerie Keys, YUPIQ marketing team/Sales Enablement at Referral SaaSquatch
The favourite across the team was the second idea, focused on commerce. However, both ideas needed to be tested before deciding which was best. In order to prove that the ideas were viable, the groups had to validate their assumptions regarding the marketspace, revenue potential, and the ability to attract customers. To properly test the hypotheses, each team set out to sell their hypothetical products to customer prospects.
Days three to five found the team working with rough product offerings and pricing models. The sales competition between the two teams began. Targeting new clients across Europe, Canada, and the US that had not engaged with YUPIQ prior, the teams pitched their ideas and asked for credit card numbers to qualify the level of customer commitment. The selling process helped the teams discover and draw a number of valuable insights about the ideas, and reach conclusions on viability.
Focused on the Software as a Service (SaaS) market which was on the upswing, idea #1 was able to get commitments from five customers interested in a customized referral platform for their products. Idea #2 was focused on ecommerce customers and it ran into three critical problems: a lack of education about referrals, a lack of in-house technical resources or knowledge, and a lack of willingness to spend money up front, without proof-of-value, for a tool of this type.
It’s interesting, and noteworthy in hindsight to realize that both customer feedback, and the team itself recognized that choices represented a tool versus a platform, and the more positive response was for the platform option.
By paying attention to what the market response was telling them, performing real world A/B testing to investigate the ideas thoroughly, and listening to what prospects were saying, an informed decision was made to shift focus. Having the flexibility to let go of what was previously presumed would be a winning strategy allowed the YUPIQ team to identify a market and customer niche that was ideal for their business.
The demand for their type of offering in the SaaS market was growing, and customers in the space tended to naturally have a strong desire to make referrals, with the technical resources necessary to implement a referral program. Customers were also accustomed to investing in tools that assisted them in achieving their goals. The referral market space opportunity solved a lot of the issues that YUPIQ was facing and opened up a long-term strategy for customer acquisition and retention.
The next obstacle to overcome was selling their new direction to their investors.
“Mutiny or Pivot?”
With the decision made, and the research done, the team geared up for change. The final part of the transformation was to convince YUPIQ’s investors that this was the right way to go. Admitting that you’ve spent a lot of time and money proceeding down the wrong path is difficult. Going to your backers and asking them not to flick as you make the case that they need to back you through the changes is nerve-wracking.
Will and Logan sat down with Owen and presented their findings, their process, and the final decision, anxiously waiting to see if they’d all be out of jobs.
Much to their surprise, Owen seemed to take the whole thing in stride, continuing to offer the same support and guidance to the new product that he’d offered to YUPIQ. After some consultation about the direction, the brand, and reviewing other details, the co-founders left feeling even more assured that the new path was an amazing opportunity to create a better, more successful product and company.
“The Alacrity Foundation has always been fantastic. To their credit, I think one of the most important things is that they’ve invested not just in companies, but in people.” –Logan
Continued tomorrow; “An Investor’s Perspective on A Pivot in their Portfolio“