Three tips I learnt from five challenging SaaS company pivots
Hi, I’m James. Thanks for checking out Building Momentum: a newsletter to help startup founders and marketers accelerate SaaS growth through product marketing.
Pivots usually come at the worst time: running out of money, struggling to find customers, and general confusion and dismay.
I’ve led, or been part of, five major pivots:
- From software for mobile operators to e-commerce retailers
- From email marketing software for anyone, to personalized marketing specific for retailers
- From helpdesk software for IT teams, to customer service software for retailers
- From payments software for desktop developers, to payment software for SaaS developers
- From AI software for diversity and inclusion leads, to diversity software for recruiters
Each have been fantastic lessons in what to do, and what not to do. Here are three quick tips on ensuring successful strategy pivots in your SaaS business.
In this post:
Pivot the customer, not the product
In each of the examples above, we used (mostly) the same product – but adjusted the positioning and go-to-market to appeal to a different type of customer.
I see many SaaS companies trying to pivot their product; completely rebuilding their idea from scratch. That wastes all the hard work, and puts you further back from where you need to be.
Pivoting your target market should mean understanding your new customer so well it becomes a competitive advantage. It’s not a small decision: it means re-architecting your entire company, so do it well based on evidence, not assumptions.
Make decisions, avoid inertia
You might think that you can pivot and expand your target market, without dropping your existing GTM.
Unfortunately, that doesn’t work in most cases. It’s likely that you’re unable to resource both successfully, let alone make strategic plays in both camps.
This quickly leads to inertia: the enemy of momentum. There are two ways this embeds in your business:
- Increased resistance happens when people lose trust in the direction of travel because it doesn’t generate the results they are experiencing or expecting.
- Lost velocity when people are confused about the direction they should be moving in.
Making tough but necessary decisions is absolutely required. This should feed down to your go-to-market activities. Your sales and marketing should actively discriminate against bad-fit customers.
Don’t expect the pivot to work
Honestly, keep your expectations low. You’re not just flicking a magic switch that aligns everything the right way and unlocks that ARR.
You’re still going to be learning what customers want and need, and building to that.
Your teams will still be understanding how best to reach, engage, sell, and support.
You’ll all need to figure out whether the new customer economics make sense over the long-term.
You’ll need to build confidence in your execution. And the best way to do that is by basing your expectations on reality, by validating and testing performance in the real world rather than jumping headfirst.
Working through a pivot is hard
Trying to make these big changes happen is difficult, scary, and tense.
In my experience, execs who haven’t been through pivots before stroll into them without accurately estimating the struggle they’re about to unleash.
Managing up, as a product marketer, is so important. Being transparent about the bandwidth, the work, the checkpoints, and ensuring there are good feedback loops will help.
But it’s a two-way street. Founders, CEOs, and department leads need to make psychologically-safe spaces for honest feedback. Celebrate the successes, embrace failures with open arms, and trust that everyone is doing their best job.
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