Start Something, Columbia! welcomed Greg Hilton, serial entrepreneur and owner of SOCO Coworking Space in Columbia. He joined Larry Jennings of Capsure Studios for the July 17th episode of Start Something, Columbia! Here are the show notes:
Theme for the day:
Pivot or Proceed?
Start Something, Columbia is made possible by the Women's Business Center of South Carolina at Columbia College. Learn more about them here.
Agenda review:
We’ll hear from tomorrow’s 1MC presenter
We’ll work through the concept of “pivot” as defined by our July book The StartUp Manual
This is a big day! We have a launch coming up we’ll tell you about later on.
Segment 1:
This week at 1 MC -- Rita Patel of Hotel Trundle (emailed invite 7/13)
What is Hotel Trundle?
Who is your target audience?
What do you hope to get from presenting at 1MC tomorrow?
Let’s learn more about Greg and his entrepreneurial background either before Rita calls (while we’re waiting) or after we hang up with her.
Segment 2:
Pivot or Proceed? How to know when to continue on your path or turn the ship around.
According to Entrepreneur.com, A pivot is structured course correction designed to test a new fundamental hypothesis about the product, business model and engine of growth.
Failure is not the end, it is the only way to learn!
Ask most entrepreneurs who have decided to pivot and they will tell you that they wish they had made the decision sooner. There are three reasons why this happens.
Vanity metrics can allow entrepreneurs to form false conclusions and live in their own private reality.
When an entrepreneur has an unclear hypothesis, it's almost impossible to experience complete failure, and without failure there is usually no impetus to embark on the radical change a pivot requires.
Many entrepreneurs are afraid. Acknowledging failure can lead to dangerously low morale. Most entrepreneurs' biggest fear is not that their vision will prove to be wrong. More terrifying is the thought that the vision might be deemed wrong without having been given a real chance to prove itself.
There is nothing wrong with pivoting, just make sure you have a clear objective.
Pivoting is frightening and overwhelming, but if you do it strategically, you will benefit your business tremendously! So, how do you pivot strategically? Follow these Guidelines:
When to Pivot?
Think about what your customers have been saying over the past few months and the volume of your customer base that is saying those things.
What are senior members of your team saying?
Make sure the change you are making is not incremental. If it is, wait until you can make a more substantial change.
Ask advisory team for help
What to Pivot?
Analyze parts of business strategy that are working, then preserve or expand them.
Don’t have to start from scratch. Ask yourself: What’s making the most money? What do customers rave about? What has attracted more customers?
External forces
Have to have product-market fit to be successful.
Market may not be ready for what you have, even if it is a great product.
How to secure team buy-in to pivot
Use data, market forecasts, customer feedback, observations, etc.
For an awesome “learning path” about how/when to pivot or proceed, visit this link. They have amazing videos that walk you through the entire decision process!
When deciding whether to pivot or proceed think about these three things:
You never get the time back that you are spending
Are you spending every dollar wisely and with impact?
How is your team holding up?
Then, consider these questions:
Should you keep on trucking? Before you completely change course, consider other correctional methods: tweak product, increase marketing, or ramp up sales spend
Should you think about a pivot? Not always a guarantee to success, so only pivot if you have a great idea and an even greater team
Should you shut it down?
What's your next move? The answers to the following questions should give you some clarity and guide you to the right next move:
How long do you have to live? How much cash do you have to continue pursuing your dream? Can you raise more money based on the traction you have?
Is there traction at all? Are you building something that people like? How certain are you that this will be a winnable market? Are you early? Late? Is your timing off?
Can you do something that has much more relevance? Have you developed any new insights that demonstrate that you should be chasing something else, ideally something you and your team have seen is a clear need? If you can: Is your team the right one to execute on this idea?
How do you want to treat those who have invested in you when you are unsure of where you want to go? Are you able to provide a return to shareholders rather than just burn through the cash?
Most importantly: What are you prepared to take on? A pivot means starting all over again--fundraising, recruiting, hyping what you've built. If that prospect doesn't fire you up, it may be time to look elsewhere.
Segment 3:
Metrics that Matter
5 Steps to Creating Metrics that Matter for your Company
According to Zac Carman, CEO of Consumer Affairs,
“The lesson I learned from the hidden trend is that a CEO really can not build a business based on faith. Essentially, dashboarding eliminates faith. You build a successful business based on facts and figures that lead to conclusions. As we focused more on being data driven, our growth trajectory continued to rise but first, we needed tools and metrics that evaluated productivity at the individual sales rep level and at the sales team level. Once key performance indicators (KPIs) were implemented, an increase in profitability from the sales department began to set in.Overall, the most important aspect of evaluating performance in sales is determining a leading indicator from a lagging one. Armed with the employee net promoter score as a KPI, we can enhance employee retention much more effectively.”
In other words, if you’re not measuring performance, you can not improve it. So here are 5 steps to get metrics that matter:
Get Data Together
Dedicate a Team
No off the shelf product will solve your problem
Define what success means for each division
Make sense of it all
When you’re talking about startups, metrics that tickle the limbic system - like money (revenue) and proxies for popularity (growth) - do not necessarily prove that a company’s mission is more likely to be achieved in the long run.
It’s quite easy to rattle off growth and revenue statistics. It’s much harder to
(1) explain a startup’s investment thesis carefully and responsibly,
(2) present the evidence corroborating that thesis to date (and what evidence, if any, undermines it), and
(3) evaluate what needs to be done to achieve the startup’s longer-term vision.
The key thing to focus on is a startup’s investment thesis.
An investment thesis does two things:
First, it crystallizes the founders’ understanding of the company’s core aims.
Second, an investment thesis articulates the general approach the company will take to fulfill those objectives.
Successful companies do not focus on typical metrics, they figure out what they’re really trying to accomplish and then determine whether their efforts are actually successful by carefully comparing results with their predefined goals. The delta between these original goals and the actual results provides valuable metrics.
The metrics that matter are the difficult goals your team is trying to realize. You might go further and say that the metrics that matter aren’t really metrics at all, they’re testable elements of your overall hypothesis.
While there’s nothing that makes one metric better or worse than any other, it’s important to keep in mind that the most important metrics in your business will change over time, depending on the company’s stage of development and market conditions.
For most small businesses, the following metrics are a great start:
Revenue per week or month
Leads generated per week or month
Profit per customer per week or month
Cash on hand
Operating reserve (savings)
With just these five metrics, you can tell how healthy your business is.Do not assume that you need to track the same metrics all the time. Every stage of your business development requires the monitoring of different metrics that will help you keep track of how you’re leading and how your business is performing.
Don’t forget virtual metrics.
Ex: Personal Stress, Personal Fulfillment, etc.
Segment 4:
Events of the week
1 Million Cups Columbia meets at the Richland Library at 9 a.m.
The Women’s Business Center of South Carolina is hosting 12@12 with Chef Sarah Simmons at the Cafe at Richland Library this coming Friday, July 20th. Register on eventbrite for that event.
SOCO Sessions presents The Path to Financial Indiependence on July 26th. That event is a great opportunity to talk personal finance for entrepreneurs and will be held at SOCO’s Vista location at 5:30 p.m. NEXT Thursday, the 26th, register for that on eventbrite as well.
Richland County’s Office of Small Business Opportunity is hosting a Worker’s Comp program on the 19th at 9 a.m. It’s free and on eventbrite.