Last week, a founder I work with asked me a question I hear in some form almost every other week from founders:

"Is it time to pivot to a different customer segment?"

Underneath that question she was asking: how do I know if I've given this current direction for my business enough of a chance?

Sometimes “this” is the customer segment, like in this case. Sometimes it's pricing ("should I lower it? raise it? bundle it?"). Sometimes it's the positioning ("am I just describing this wrong?"). Sometimes it's the playbook ("should I drop in-person outreach and try paid ads?").

Whatever the surface question, the underlying anxiety is the same: I'm not seeing the traction I expected, and I can't tell if I'm one tweak away from a breakthrough, or if it’s time to try a new direction.

Here's what I've learned from coaching dozens of founders through this exact moment: the question "should I pivot?" almost never has a clean yes or no answer until you answer five other questions first. When founders skip those questions and go straight to "let me try something new," they usually trade a partially-tested idea for a completely-untested one. And as the saying goes, “the grass is always greener…”.

So before you pivot anything, run through these five questions.

When you ask, “should I pivot?”, you’re assuming that the current direction has been tested sufficiently. In my experience, in most cases, founders have not. 

Let’s go back to the example from above where the founder asked me about pivoting her customer segment. She had been in front of 400+ people in her specific customer segment. This is good. However, she had barely had any actual sales conversations with them. 

In the early days, until you hit about 20-50 Happy Paying Customers (depending on type of business and average order value), you need to prioritize one-to-one calls to not only close deals, but also to truly diagnose what’s working or not. Yes, this applies to all types of businesses.

A simple way to think about it is, have you had proper one-to-one conversations with at least 20 of your ideal customers, ideally 100-200. If not, that should be your priority to gather sufficient information to then inform whether to pivot, and in which direction.

A big mistake I see founders make when contemplating a pivot is misdiagnosing the problem. Again, the answers to this lie in the one-to-one conversations with your dream customers.

Try this exercise to first surface the right problem area.

Map your activity to date by user stage from stranger to Happy Paying Customer. For example:

If, like the above example, you are getting in front of people but they aren’t moving to the next step, that’s the problem.

If you are getting calls booked, but they aren’t converting, you need to fix that. Diagnose where in the customer’s journey you need to problem-solve. 

It's possible to have plenty of conversations and still misread what they're telling you. In addition to looking at where in the customer journey there is a problem, you have to look closely at data from the right customers. How do you define right? 

This is the heart of the "in" vs. "out" methodology I teach as part of my Happy Paying Customers™ System. Sort every conversation into "in" (moved forward to the next step in the customer journey, especially purchased) or "out" (didn't). Look at the patterns in data for those who are in vs. out.

Another founder I work with came to her first 1:1 session telling me what she had learned about her customer segment. Much of that information sounded scattered, and I couldn't find any patterns. So I grilled her about her paying customers specifically: who they are, when they bought, why they bought, what their status quo was before, and how her solution was a better fit. In just 45 minutes, the patterns became clear. 

She had been summarizing information across everyone she had spoken with who generally fit the age group and a few other characteristics. When we zoomed in on specifically those who had paid, it became obvious which customers she should be focusing on. Her data wasn't the problem. The way she was slicing it was.

I break business fundamentals into three main parts in my Happy Paying Customers™ System: 

Pricing is a manifestation of positioning, so I pull that into the same bucket.

Once you have figured out what the problem is in the above question, it’s now time to dig into which business fundamental(s) might be causing the problem.

I recommend assessing them in the following order: 

* Running conversations with dream customers is so pivotal that I added my Research-Sales Methodology as a signature part of my Happy Paying Customers™ System.

Why this order? 

The tricky part is that it could be a combination of these. For example: if you’re doing outreach but not getting responses, is the problem with the message you sent (execution), wrong channel (playbook), wrong framing (positioning), or wrong list (customer). The execution is easiest to fix or rule out so I recommend it in this order. 

This one trips up almost every founder I've coached.

When you compare your current direction (which you've been working on for months) to a new direction (which you've been daydreaming about for two weeks), you are not making a fair comparison. You're comparing a real thing with all its real friction to an imaginary thing with no friction yet.

The new direction almost always looks more promising in your head because you haven't hit any of its actual obstacles.

Before you pivot, ask: what's the starting point I'd be at with this new direction? Do I even know who specifically to reach out to? Do I know what their language is for the problem? Do I know how they buy solutions like this? Do I know what objections they raise? Do I know if there is any willingness to pay at all? 

If the answer to most of those is no, then you are not just pivoting, you are starting over. That might be the right call, but you should be prepared to start your validation process from the beginning for this new direction. 

Slack famously started as a game called Glitch. 

Whenever a founder comes to me with a direction - which is very often! - I always have them go through the Happy Paying Customers™ System steps again to define their fundamentals and design a new Playbook to micro-test. This is normal. 

The hardest skill in early-stage building is telling the difference between "this isn't working yet" and "this isn't working." These five questions have helped founders I work with decide whether to pivot and in which direction. They work together: 

If you are in this messy middle, this framework should help you assess if and how to pivot. Reply back with any questions.

And if that’s something you want support with, the Happy Paying Customers™ System is the perfect fit for you.

If you know founders considering a pivot, forward this newsletter to them so they don’t waste time and energy chasing the business direction.

And if you know any founders who are ready to turn their idea into a multi-million dollar business with real world validation, I’ve got spots open to work with me (1 for a May start and 2 for June). Founders can learn more about the investment options, and get started here. You can book a complimentary call with me to confirm fit.

How does this framework resonates? Anything you’d add?

Rooting for you!
Sweta