Startup Pivoting & Software

What is Startup Pivoting?

As Alan Cooper says in To Pivot, Or Not To Pivot,

When a startup company discards Plan A and moves on to Plan B, it is called a “pivot.”

The Lean Startup approach suggests that entrepreneurs use the Lessons Learned from the inevitable failure of Plan A to adjust their business model. An iterative approach that rapidly continues until the business model proves the viability of the idea.

In the context startups, pivoting is a term coined by Eric Ries. Pivoting is when, through a series of small-scale trials (hypothesis testing), a startup moves incrementally toward a better business model.

Each failed trial causes a pivot point where some element of the business plan is tweaked (e.g., customer segment, feature set, positioning).

Does Pivoting Apply to Iterative Software Development?

I propose that we – the iterative software development community – think of each release of new features as a business proposition and an opportunity to Pivot, much like a lean startup. Then, ask

  • What is our feedback loop with our customers?
  • Would our team modify a feature based on negative feedback?
  • Would our team roll back a feature based on negative feedback?

Further, I challenge the iterative development community to think of meaningful measures of the value of a new feature, whether value is measured by revenue generated or by the coolness buzz created.

Beware of Shadow Beliefs

One term I learned from Eric Ries is Shadow Belief. Shadow beliefs are the closely held, somewhat notional beliefs and assumptions that frequently sink good-intentioned entrepreneurs. All of us fall somewhere in the continuum of delusion, particularly those under the spell of a great startup idea or cool software feature.

One shadow belief is We know what the customer wants. Another shadow belief is Advancing the plan is progress.

Hypothesis Testing & Software

What is Hypothesis Testing?


Hypothesis testing is used by Eric Ries in the context of the Lean Startup. Hypothesis testing encompasses:

  1. Proposition – for example: How many users will pre-order our product?
  2. Test – e.g., a website with a picture of the product and an accompanying pre-order button.
  3. Results – Evaluate the number of pre-orders.
  4. Action – Refine the test (e.g., A/B testing or different market segment) or tweak business model (see pivoting).

Does Hypothesis Testing Apply to Iterative Software Development?

A shortcoming I repeatedly see in Agile software development is what I derisively call bogus prioritization. That is, the business or product owner sets the direction of the development team based on seat-of-the-pants guesses of what’s valuable, rather than on something more verifiable.

I propose that we – the iterative software development community – think of each release of new features as a business proposition, much like a startup company. Part of the Lean Startup philosophy is continuous testing and refinement as you converge to a better business model. Can we do the same with each software release?

We might ask,

  • What is a hypothesis and how best to test it with real customers?
  • That is, how do we make a bold hypotheses like “mCommerce will double eStore revenue” testable?
  • What hypotheses are we hoping to get answers to in this release?
  • How might prototyping of features be used to test hypotheses?
  • Will test-marketing feature sets be off-putting to our loyal customers? To new customers?

Believe those who seek the truth. Doubt those who find it.
~ Derek Sivers

 

Startup Pivoting & Shadow Beliefs

Startup Pivoting

At the Startup Lessons Learned conference last week, there was much ado about Pivoting. As Alan Cooper says in his post To Pivot, Or Not To Pivot,

When a startup company discards Plan A and moves on to Plan B, it is called a “pivot.”

When I hear Pivot, I recall my physical education teacher screaming at me not to scuff the gym floor with my “street shoes” when I

put my right foot in
dancing the Hokey-Pokey.

Pivoting for startups is moving incrementally toward something better – a better business model.

Pivoting is like the iterative numerical methods we used in college programming classes. You’d start with a seed value, chunk along for a bit, and then check your convergence. With enough constraints and suitable convergence criteria, convergence was almost guaranteed. Occasionally an anomaly would unravel your code into memory consuming divergence, but hopefully you programmed a check for that condition before you smoked your 256KB.

Shadow Beliefs


Shadow Lines by Abdulla Zaid

One of the things I heard from Startup Lessons Learned conference organizer Eric Ries is the term Shadow Beliefs. These are the closely held (perhaps subconscious), somewhat notional beliefs (and false assumptions) that frequently sink good-intentioned entrepreneurs and insidiously swamp the best agile software teams.

All of us fall somewhere in the continuum of delusion, particularly those under the spell of a great startup idea or a cool software product.

Do we believe we know what the customer wants?

A common shadow belief is

We know what the customer wants. 

Cooper, a digital product and interaction design firm, founded in 1992 by Alan Cooper, is a leader in discovering what users want. Most of us think we know what the customer wants, few of us do.

Do we believe that advancing the plan is progress?

Another shadow belief is

Advancing the plan is progress. 

This is a single-line indictment of dogmatically Agile software teams that harkens back to the Discovery vs. Delivery discussions at Code Freeze 2010: Redesigning Agility. Some time before the Code Freeze conference he organized, 2009 Gordon Pask Award Winner David Hussman tweeted,

If you don’t know where you are going, it’s easy to iteratively not get there.

This shadow belief is an even bigger pothole for startups than software development teams.