When do you shut down or pivot?
Richard Gao
18 replies
Curious to hear from founders, how do you know when to shut down or pivot? 👀
Do you stick it out till the end or succumb to shiny object syndrome?
For me, it would be a lack of revenue growth even after doing everything for marketing
Replies
André J@sentry_co
Shut down when you're out of money. Pivot when your bet didn't pan out.
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Breveto
I’m curious about this as well. I few years ago I took my first app off of the App Store because it wasn’t getting any sales. Nowadays I wonder if I had left it there, would it have have grown over so much time.
I suppose any revenue, even if it’s small is better than no revenue. Assuming your product brings value, isn’t losing money, and isn't leeching time off of projects that will do infinitely better.
Breveto
Lyrist
@realjordanellis how long after you noticed it wasn’t getting any sales did you remove?
@realjordanellis If there's no cost leaving it up, it might be better to do so
Imho, Pivot: when you've spoken to enough users(more than 1k+ at least) and none of your sales/marketing strategies are able to retain users.
shut down: when the market's too saturated or if you've started up for wrong reasons(I want to get rich quickly, blah blah, blah)
Summitry
@uma_venugopal 1,000 users????? If 30-50 conversations don't yield any interest, why do another 950?
Summitry
@uma_venugopal I'm actually going to disagree with that (respectfully of course). It's mathematically proven under binomial distributions (with 5% error) that 30+ is good enough for a focused population.
I've built a large business and know personally many more founders that gave built businesses larger than mine.
Not one has tried to survey 1,000 users.
No doubt the insights will be better BUT
1. Surveying 1,000 users costs $20-$50k through a quantifiable survey and a full-time job if you want to do it yourself
2. The incremental information from the additional 950 has a very low incremental value.
Finally, my first company (proSapient) actually does exactly this line of work and I can tell you that after 20-40 interviews, it's extremely clear where to go next
Lack of revenue growth is not the right indicator. What if you have stable revenues and great profits, but no revenue growth?
Decliniing profitability or consistent losses would be a better indicator, in my opinion
Summitry
HarvyAI - Professional Email Assistant
An investor once advised me, "Keep building as long as you don't run out of ideas." It helped me to some extent to better understand when I should stop or pivot.
Look and listen to your analytics; what story are they telling you. What is the user base telling you? Do you have an researcher? If not, take your products to the streets and do raw and authentic research live with the people you are targeting.
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pivoting has be based on data otherwise it is shiny object syndrome. Build quick tech prototypes, getting real customer/market data. I prefer to think of it as a constant series of micro adjustments as you continue to aim towards your goal.
Summitry
If your product doesn't resonate.
If you work hard enough you can usually find initial clients.
How long do those clients stick around
How many referrals come from those clients
Do your customer conversations inform you that you have some edge or not
Knowing when to shut down or pivot depends on various factors such as market conditions, customer feedback, and financial stability.