How A Pivot Saved Our Startup From Dying

This post originally appeared on Startup Grind

It was June 19th and I was sitting at the San Francisco airport waiting to board my flight and contemplating future of our startup. I was returning from Valley after an exhausting few weeks full of customer feedback and learning that would shape the direction of our startup.

Still feeling jet-lagged I went to the office next day, gathered everyone on the team around the table and said, “Guys, we’ve got a problem — things are not working as we had expected and we need to seriously rethink our strategy or we will die a slow death.”

It was incredibly tough to communicate this to the team, but I knew if I didn’t inform them now, we would just be living in denial mode — and eventually our startup would die.

Fast Forward Six Months

At six months we were still alive and going strong. The team was leaner, the product was better, and growth has been encouraging so far. We had no idea that the decision to pivot would take us to where we are today!

So How Did This Turnaround Happen?

We had been dabbling in the conversational commerce space for almost a year and had come up with a model that we thought was good and would change the way people provided professional services, starting with freelancers as a core segment.

After months of iteration and experimentation with our product, I went to the valley to gather first-hand feedback on our chat-based freelance services model. While we were clocking in some revenues (around $40–50k ARR at one point), I knew things were not as great as they should be.

Even with our best efforts, we weren’t scaling due to fundamental reasons such as low frequency of use (missing engagement hooks), lack of standardization in services and pricing. We had a dependency on in-house operations, limited growth beyond early adopters, and fragile defensibility.

We had a clear choice — keep pursuing the same model and try to bulldoze growth via paid channels or cut our losses and focus on a scalable solution while money was still in the bank.

I always believed as a bunch of smart and determined individuals we should strive for a creative tech-driven product, even if it meant taking an unchartered and more difficult route.

Alternative Solutions

In the same meeting, rather than moaning about the pain, we discussed an alternative solution in the form of - a chat bot platform, that I thought was a better take on our mission to simplify the way the world works.

After a week of hypothesizing we came up with wireframes and decided to move quickly to the development phase.

The transition period to the new product was the toughest in our startup’s life. We lost almost all previous team members due to obvious motivation issues.

Fortunately, some brave souls (thanks to Mayank and Arjun — my partners in crime) stuck around and still believed in the mission and we were all excited about the new product.

Thanks also to the superhuman effort by the team. We completely turned things around in 3 months and launched an MVP last October.

Since Then We Haven’t Looked Back.

We are a thought-leader in the chatbot space globally. I’m microscopically ashamed to brag that we are among top 5 hunts of the day. When we launched, (even DDoS attacks couldn’t stop us!), and to our great pleasure, we have a few thousand signed up users. We’re growing at a good rate MoM with more than half million messages exchanged so far.

Such defining moments are pretty common in any startup’s life and can make or break things. While it’s hard to predict the future, I’m quite happy with how things have turned out so far and thought it might be good to share some of what we learned, so our fellow entrepreneurs can benefit from what has happened to us.

When Writing Is On The Wall, Don’t Hesitate To Break The Wall

I’m a strong advocate of product induced engagement and growth to build a sustainable startup. We seemed to be doing okay on LTV vs CPA metrics, but the repeat weekly and monthly activity just wasn’t very encouraging. We tried our best to deliver the most seamless experience to users, but the market was not responding favorably.

We could’ve pursued the same model and built a lifestyle business but that wasn’t exciting enough for me or rest of the team.

Be In The Game For Right Reasons

This is probably the most important factor for a turnaround. It’s easy to lose heart if your first attempt isn’t a success — especially when the whole time you have been dreaming of that fat jackpot. It rarely happens that way. At such moments reminding yourself of why you exist or even started up in the first place really helps you stay alive.

Learn And Plan Meticulously

It’s easy to get lost when things aren’t going well and you start looking for shortcuts. If you have the right attitude and appetite to learn, always remember you never fail you just evolve and figure out something that is better than your last attempt. It’s important to correct your mistakes and have a clear idea why you think pivoting is better than last product and how you plan to address the issues you faced in the previous model.

Communicate Clearly

Your team is banking on you, looking up to you and it’s your responsibility to be absolutely clear and strategic in your thought process so they are on the same page as you. More importantly getting things out will encourage more people to share ideas and you might come up with a better solution collectively. Don’t hesitate to rebuild and reward those who hang around

You need to recognize that such moments are very hard and disappointing for a team and not everyone can relate to, or is willing to go through the pain. That’s natural and if it means losing people then so be it. You will be able to build a much stronger team for the long run with remaining few and can focus entirely on a product in hand than worrying about day to day motivational challenges.

Don’t Make Noise And Keep Burn Low

Until you’ve found the P-M fit you should strive to keep the team size to a bare minimum (5–6 max). It helps in maintaining high levels of efficiency and keeping costs down. It’s hard to scale down any startup if you’ve committed enough resources and capital into it. We were fairly lean and got even leaner with and therefore extended our runway.

A Pivot Is Well, Hard

While it’s not easy to throw away what you’ve built and been working on. But, sometimes for the bigger and better cause — you have to make the tough call.

If you find yourself in such situation, don’t hesitate and do the right (read: difficult) thing. It will be very very hard — but necessary.

And never forget: “one should fall in love with the problem and mission, not the solution.”