A little about myself:
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“A pivot is a change in strategy, without a change in vision”
- Eric Ries, author or “The Lean Start Up”
What was the initial insight behind the Power2switch idea?
The insight behind Power2Switch was that consumers lacked a mechanism for comparing electricity deals. We wanted to be the “Expedia for electricity” – providing consumers price transparency across providers.
What changed, when and why? What was it that your customers told you or your team discovered that promoted the pivot?
Shortly after entering the Excelerate program, we realized that we couldn’t acquire customers quickly or cheaply enough. We had to rethink our approach to customer acquisition. One of our mentors actually suggested that we work through local property managers and it was this insight that prompted a pivot to a channel strategy. The upside to this approach was that we were able to reach a lot more customers, the downside was we had to share some revenue in the process. Once we expanded our focus beyond residential to include small businesses, we chose the chamber of commerce as our channel partner.
How did you adapt the business plan?
We didn’t have to adapt our business plan in terms of how we made money. However, going forward we do see Power2Switch’s mission evolving. We believe that there’s a lot more scope for empowering and educating consumers around smart energy choices, both insider and outside the home.
What did you ultimately learn about pursuing path B over path A?
I think iterating on our business plan taught us the importance of focus. We quickly realized that you don’t have unlimited time and energy when building a new business. You aren’t all so smart and so talented that you can afford to pursue all paths simultaneously. You really have to pick one or two things to go after and focus on that. If your assumptions prove wrong, you can then pivot to the next phase armed with knowledge from your past missteps.
Could you have done anything else initially to have foreseen the need for this change?
Our decision to focus on partnerships was really an organic outcome of our market research so we probably couldn’t have pre-empted that learning. We tested a marketing approach that ended up confirming a previous intuition of what we thought might work but at the time lacked sufficient evidence to confirm. When you’re resource constrained you oftentimes don’t have an overwhelming reason to pursue something until it becomes blindingly obvious.
What advice would you offer other entrepreneurs facing the need to pivot?
The need to pivot probably emanated from a need to focus so I would say that having a targeted customer acquisition strategy is very important. We initially started out by targeting everyone before realizing the value in building clear partnerships. I’d encourage other entrepreneurs who find themselves at a similar crossroads to identify what they see as the biggest unmet need or challenge in their target market and to go after that.
Secondly, I think you have to look at your team’s strengths and see how those measure up against the market opportunity. For us at Power2Switch, we knew we could deliver on what we were really good at – technology, fast iteration, and partnership development. Those insights can help you qualify your thinking as you reposition your business.
What do you think has enabled you to be successful in making the transition? Anything you would have done differently? More quickly?
The experience at Excelerate was incredibly valuable and probably allowed us to pivot faster when the need arose. Relationships definitely win the day and the mentors provide incredible leverage on that front. We were probably able to avoid some costly mistakes because of the guidance they provided.
Finally, I would caution against “analysis paralysis”! At the beginning, we spent a lot of time planning, modeling and thinking through all possible scenarios. Oftentimes you have to take the plunge and “just do it”. With start-ups there are no certainties, it’s all about daily execution and experimenting until you find something that works.