Building a Pivot-Friendly Investment Model
“Oh, man, I have a real fear of commitment,” a CEO told me this week. We were meeting with his entire leadership team on the topic of innovation. “When we commit, that’s it, we don’t budge. We get attached to ideas like a pit bull.”
His colleagues laughed in recognition of their organization’s blind spot, but it was laughter tinged with remorse. They recently shut down an internal venture that failed to the tune of seven figures. “We should be attached to the business challenge, right? And to the customer’s problem, but instead we fall in love with the idea.”
Although the problem he was describing — pivot resistance — breaks my heart, the process he’s going through to address it got me very excited. His leadership team is collaborating to create a petri dish for exploring new solutions and business models.
When you’ve got the CFO, the General Counsel, and the CTO in the room along with the CMO and SVP of Innovation, you can overcome a lot of challenges, even misguided love. Their petri dish will be a safe place to experiment without contaminating the core business. Where you can fall in love with business challenges and customer problems, but pivot from a flawed idea to a better one as easily as you change shirts.
We’ve learned some hard-won truths about investing in the face of uncertainty, including these two:
Hard-won Truth- Investors can’t pick winners; the market does that.
Implication- Explore multiple options; expect to pivot
Hard-won Truth- Every clever business model unravels upon first contact with the market.
Implication- Share the business model at ‘good enough’. Iterate quickly.
What about you? What have you noticed about pivot-stubbornness or pivot-friendliness in your organization? I’ll share the broader list as we hear from others.
Write me a comment below or email me.
- Tim Ogilvie, CEO