A successful pivot; lesson’s learned
It’s been eight months since Spreedly announced we were pivoting. Originally a digital subscription offering competing against the likes of Chargify and Recurly we decided instead to focus on being an online payment platform. We wanted to create a Braintree or Stripe like experience for companies that need to work across payment gateways.
We worried about using the term “pivot”. Was it just short hand for “delaying the inevitable”? Certainly we got that look more than once from friends and family, customers’ and potential investors. Yet more than a year after we made the decision, and 8 months after going public with it, we’re pleased with our progress. We’ve passed 125 customers, raised nearly $1 million and are processing nearly $100 million per year on the platform. To be sure we could still fail for a whole host of reasons. Yet we can’t blame the pivot. We’re well past that point.
That realization got me thinking about a successful vs unsuccessful pivot. Was there anything we could share from our experience to help others in a similar position? Here’s our lessons learned:
1) Are you pivoting away from something or toward something? All pivot’s involve both so it’s more of a question of the mix. Our pivot presented itself vs something we went searching for. Prospective customer’s came to us and said “I have no need for your subscription API’s but want to get to the underlying credit card vault and multiple payment gateways” We heard that more than once and created a completely no frills alpha/beta offering. When 4 or 5 customer’s used that and started to grow we began to believe. We felt we knew the overall potential for subscriptions and what it could be. This felt much bigger. I think a lot of successful pivots are from “accidental” discoveries like this when pursuing the original idea.
2) Does your pivot match your culture? Both our subscription service and our new offering are API driven. So we always appealed to developers and enjoyed selling to that market. However our new service is much more of a “platform” vs completed solution like a subscriptions offering. We realized that fit better with the makeup of our founder team. I can imagine though that might not always be the case. It’s good to think about that for your team. How will your new pivot map to what you know about your team’s strengths?
3) Is there any momentum around your pre pivot that can help your new offering? We kept Spreedly.com and completely changed the messaging to the new offering. We were still an API driven service involved in online payments. No matter what we said it was inevitable that in the first 60 - 90 days we had a lot of confused sign ups who thought they were getting an out of the box subscription service. Yet more importantly we had 100’s of people coming each day and reviewing our new offering. Maybe 95% of them left with no interest but it also meant we had some lead flow and some awareness. There was enough overlap that we were better off than if we were starting from scratch with a new name and domain. That really helped win those crucial first set of customers.
4) What did you learn about your team? The good news is that launching and then deciding to pivot is a pretty stressful process. So you’ll have learned a lot about each other. Do you feel more confident about your co-founder/s than before? Should you address real issues there as part of the pivot? Are you better prepared to weather the storm because you’ve already been through a lot together?
In conclusion. We pivoted toward something vs away from something that was failing miserably. We also understood a lot more about our strenghts and weaknesses as a team/culture. Having some awareness from our prior service sure helped too with those first critical wins.