November 28, 2021

Replicating the In-Market Pivot, Pre-Launch

Entrepreneur Pre-Market Pivot

7 minute read

Here’s a complaint we hear all too often at Frehner-Jens: “We need to be more entrepreneurial, launching fast while being nimble enough to pivot quickly. The problem is we can’t do that now because our systems are too rigid to pivot once we’re in the market.”

For Big Companies, this statement is tied to the belief that the Entrepreneur is successful due to their ability to remain agile without the limitations of a more disciplined innovation process. However, this assumption neglects the underlying issue that prevents a business of any size from succeeding: When a team pivots in market, it means they launched without the right plan and were forced to adapt.

By launching with the right plan the first time, your business can avoid the costs and risks associated with pivoting in market.

The allure of the in-market pivot

Before we get too far, let’s take a step back and define what a pivot actually is.

Forbes has detailed ten different types of pivots, including changes related to product features, the target market and marketing channels, among others. They describe pivots as a form of course correction designed to “test the viability of a different hypothesis about the product, business model and engine of growth.”

While that’s a fair definition, let’s simplify that even further: A pivot is any change in one or more of the foundational business building blocks of a commercialization plan.

So, if a pivot is simply a change to the building blocks, why is course correcting in-market so alluring?

In the world of innovation, the allure comes from the fact that the balance of power has shifted to the Entrepreneur —  who often pivots in-market. Of all the growth in the consumer packaged goods space, 49% is generated by start-ups and smaller companies, a sharp contrast to the 3% attributed to the top 25 companies. As Entrepreneurs make these high-profile changes seemingly on the fly, it gives the appearance that the reason they’re succeeding is solely because they have the flexibility to adapt in-market.

However, the in-market pivot is the ultimate “the grass is always greener”-type of situation for those in big companies with rigid go-to-market systems designed for operating at scale. Even though they have the flexibility to pivot in-market, no entrepreneur wants to pivot. They do so only because they have to in a mad scramble to survive the in-market mistake of launching with the wrong plan. 

So, if the flexibility to pivot in-market isn’t their true advantage, what is?

What’s driving the Entrepreneur’s success?

When the Entrepreneur makes an in-market pivot, they do so because they’ve gotten deeper learning on one or more of their business building blocks. It’s these learnings that help them gain an advantage against more traditional and rigid competitors — not their flexible structure.

Said another way, successful Entrepreneurs are using the in-market environment to better learn and more quickly adapt their commercialization plans than Big Companies are able to learn and adapt pre-market.

That brings us to our next question: What are successful Entrepreneurs learning that allows them to adapt their commercialization plans so effectively? And, more importantly, could it be learned pre-market?

One of the most common adaptations is the product feature pivot. This occurs when there’s a disconnect between the product itself and the market it was intended to serve. While Entrepreneurs are able to figure this out in-market, is this something that can only be learned post-launch? For most industries, the answer is no.

Big Companies have been using concept and use testing for decades to determine product fit before ever investing resources in manufacturing and customer acquisition. When digging deeper into the other types of in-market pivots Entrepreneurs are doing, we see many research vehicles that Big Companies are already using to learn and optimize pre-market where the cost of failure is a lot cheaper.

If Big Company’s research methodologies are learning and optimizing individual building blocks faster than Entrepreneurs, what are Entrepreneurs learning that’s giving them their advantage? In our experience, the most valuable learning they are getting is the interconnectivity of the building blocks.

Replicate Interconnectivity Learning, Pre-Market

Big Companies are using pre-market research to optimize each of their building blocks individually. Meanwhile, Entrepreneurs are using in-market learning to not only do the same, but to also optimize the interconnectivity of the plan as a whole – which is critical as a new business is only as strong as its weakest link.

One example of learning on “interconnectivity” is 5-Hour Energy. The brand made changes to almost every business building block in their original launch plan through more than five in-market pivots.

Originally, the product’s journey started as a bottle of pills under the brand name of “Chaser” and was to be sold as a hangover cure. Talking with early users led to the learning that consumers were most interested in the energy benefit to overcome a hangover — and that convenience was important.

So, the team changed the product form from pills to a 2oz shot form. This led to the learning that retailers wouldn’t shelve this product with other energy drinks because of theft concerns related to the unconventional bottle size. This pushed the team to focus on getting product placement at checkout where theft is significantly less. These changes resulted in an increase in pricing to cover the additional spending on the display cases needed for shelving at check-out. But, by not sitting next to 20oz energy drinks, the brand was able to further reframe its price higher to $2.99 per shot, dramatically improving profitability for them and retailers, which further drove retailer support.

As you can see, they weren’t optimizing just one building block — they were optimizing the interconnected value of the building blocks working in concert.

Obviously, in-market learning on the interconnectedness of building blocks worked well for 5-Hour Energy, but the big question remains: Can Big Companies uncover interconnectivity learnings pre-market, where teams have a research advantage?

In short — yes. Based upon our work with both Entrepreneurs and Intrapreneurs at Big Companies, we created Fast-Forward® to do just that.

Fast-Forward® enables companies to blueprint, prototype and simulate their plans pre-market, where it’s faster and cheaper. We’re able to generate the vast majority of in-market interconnectivity learnings captured by the Entrepreneur without the cost or risk of making a change once the business is already live. By doing so, we understand the interconnectivity between each building block, optimizing the go-to-market plan holistically rather than as a series of individual decisions.

Contact us to learn more about the Fast-Forward® process or check out our blog on using simulations to replicate the learnings Entrepreneurs are getting with their in-market pivots, but do it pre-market, where the costs and risks are lower.

Key Points

• Big companies often view in-market pivoting as the entrepreneur’s advantage, but pivoting in-market is a costly way to correct for pursuing the wrong plan.
• The hidden value of the pivot is that a company can learn about their plan and change to a better plan before they fail.
• Big companies can use blueprinting, prototyping, and simulations – supported by market research – to get the benefits of the entrepreneur’s pivot, pre-market, when their company still has the flexibility to change the plan.