Pivot · Enterprise software

Pivoting away from your original users


May 30th, 2013

Noah Glass just guest posted for FounderDating's FounderTalk series about falling in love with the consumer market and then having to  pivot away from it.  It's an honest account about how difficult that was and how he cam to terms with the decision.  
Here's a quick excerpt: "What followed was a soul-searching period in my life as a young entrepreneur. I knew that the numbers were not on my side, but did I really want to spend my time working on a non-consumer startup? That wasn’t why I’d gotten into entrepreneurship in the first place. I wanted to create consumer-facing products to make consumers’ lives better. I didn’t want to have to compromise with other companies’ brand guidelines and other exogenous limitations. I shuttered to imagine my company being categorized as just another supplier/vendor/service provider." Read on

Has anyone else had to pivot away from their original userbase? How did you make that decision? 

Mark Piekny Engineer, Consultant & Entrepreneur

May 30th, 2013

I am going through this internal, and external, debate right now.  My current technology application was meant to solve a consumer's problem.  I relish the notion of notoriety, that is, the guy on the street saying, "yeah, that product is great.  You did that?"  Alas, B2B now sounds more feasible.  But I find myself still sceaming about how to make the walk back to B2C.  Perhaps the best play is B2B with your customer a B2C.  One degree of separation.

Bill Kelley

May 30th, 2013

Consumers are expensive to obtain and can be difficult to retain. Loyalty is not the dependable cornerstone of a B2C business that it (allegedly) once was.

Your B2B2C model is one I have a lot of experience with. You can be a specialist in infrastructure, support, service, product development, etc. and not have to add consumer acquisition/retention skills as well. Let those who are established and experienced with consumers carry that load.

You can run a very lean business if it's B2B or B2B2C. B2C? Not so much.

Michael Brill Technology startup exec focused on AI-driven products

May 30th, 2013

I had different circumstances and a very different outcome.  In my previous business, we were 100% focused on consumer but by the second year, B2B was 50% of our revenue and growing (it ultimately represented 80%+). I could put in the same effort to generate a $10K order or a $100K order. It seemed like a no-brainer.

The problem is that the soul of the company was really with consumers and I was simply chasing short-term money at the expense of the long-term. Ultimately, the B2B channel was more sensitive to our high cost structure (built for consumers) and the best ones went on to find lower-cost solutions. Investing in B2B meant that I wasn't investing in consumer, so that business languished. I rationalized this with 5+ years of > 100% CAGR and $15 million of the easiest money ever raised, but how I always described the business and what people were investing in was the consumer business. By the time the problems worked themselves through our B2B channel, we had dug too big of a hole to be able to retreat back to consumer.

The moral? Not 100% sure, but a few thoughts:

1. Make sure you think your pivot through. Listen to the market, but have some conviction about the long-term.
2. If you do pivot, then pivot. I tried to serve two markets at once. I have a black belt in rationalization as I'm sure you do as well. Even if something is 10% of your business, it probably takes just as much energy as the 90%.
3. If you ever think you can change the wine industry with a clever idea... shoot me a message before you invest your time!!!