10 Years, 10 Lessons: Year 7: Change or Die

photo courtesy of asw909

photo courtesy of asw909

It’s not them, it’s you

Often startups can’t understand why they have a group of customers they didn’t expect or who want to use the product in a way they didn’t anticipate.  Don’t fight the power – change.  Particularly when you are creating a new category, it is essential to get it out there early and get user feedback. If you build a perfect solution because you think you know who the customer is and what they want, you will find it is difficult to change when you learn your initial assumptions were wrong.  Founders At Work (as Guy Kawasaki suggested, it really should have been called Flounders At Work) is full of examples of startups launching a product, stumbling, realizing what the market really wanted and revising their offering to suit and then enjoying market success.

A shout out is due to Eric Ries of Startup Lessons Learned for his concept of The Pivot – that critical point when you must change the business to match what the market needs.  I’ve experienced this first hand with Edge Dynamics.  When the market changed structurally, and we finally realized it, our product was way too complex to be easily changed.  We needed to either stay in a shrinking high end market, or change our entire organization for the new reality (to change from mission critical enterprise software to nice-to-have reporting application best delivered as Software as a Service).  We dithered and died.  Abilizer did this better, cutting to the bone and re-launching (in this case from SaaS application to enterprise software).  In both cases, we proved that SaaS and enterprise software are two completely different businesses.  You can’t be both and to change from one to the other is very, very difficult.  The failure of hybrid software delivery business models is another example of the need to Focus!

Key Takeaways: Get the simplest, cheapest, bare bones product in front of customers as fast as possible and learn what they want. Then build the product they really want.  You’re either offering SaaS or software – don’t try to do both.

Sign Posts: How do you decide what features your customers need? Who makes the decision on what to include in the next release, and using what criteria? Do you offer on-premise and on-demand software?

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