How to turn a failing start-up into a success

“The key is always listening to your core customers and adapting the product to suit them,” Coachy founder Luke Grana says. Michel O’Sullivan

In this week’s magazine you can read my article about the double-pivoting Posse – a web-based start-up run by Rebekah Campbell. It has changed from an online music marketing service to a retail marketing service and finally (for now) to a social search platform. (Hence its high degree of difficulty “double-pivot” categorisation).

But what’s a pivot anyway? Niki Scevak from start-up accelerator Startmate reckons it’s as simple as listening to your customers and responding. After making some initial guesses about your product, entrepreneurs should watch how users actually use and interact with the product, he says. “Pivoting is the reaction after going through that cycle and seeing if a lot of your guesses are wrong or right,” he says.

To pivot in this way makes sense whether you’re creating an iPhone app, new software or a opening a retail store.

Here are two more local start-ups that are mastering the manoeuvre.

Coachy: from marketplace to platform

Live video will change the way people get coached, the founder of Pollenizer portfolio company Coachy Luke Grana says. This “always has been and still is” his vision but he has tweaked where his start-up will sit. Grana thought Coachy would be a marketplace. Coaches could set up virtual schools and teach students via live video. Coachy would take a cut of the lesson fees. “A lot of coaches and teachers are using Skype, it’s really popular,” he says.

The site opened for business early 2012 and although coaches signed up, students weren’t so interested. “The coaches on board were bringing their own students and we couldn’t add that much value in bringing students to them,” Grana says.

As well, coaches wanted their own branding and didn’t want to be under the Coachy banner. To pivot, entrepreneurs need to listen to what customers want. Now, instead of a marketplace, coaches run their own website, which is “powered” by Coachy, in the same way that Big Commerce sits behind online retail stores. “Coaches wanted the tools but they wanted to brand their own rooms ... The key is always listening to your core customers and adapting the product to suit them. To me that’s the nature of any pivot. A lot of people have an idea in their mind that makes a lot of sense but really, it’s up to the customer.”

Vero: from invoice app for freelancers to targeted email marketing

At the beginning of 2012, Chris Hexton and James Lamont joined Startmate with their idea of simplifying invoice management for Freelancers: Invc.me. Now they’ve restarted. “A pivot is having the same vision and moving around that,” Hexton says. “We’ve done a bit more than that.”

Why the massive change? “We had about 220 users by the time we got to demo day [after three months of Startmate] ... but we were finding a lot of users were signing up and then abandoning the app,” Hexton says. “You want to create something useful.”

The pair were reluctant to throw in Invc.me so close to the end of Startmate and still pitched for funding at the end of the accelerator process. “We found that a trying time,” he says.

The pair are now working on a more pressing problem for start-up businesses: sending more personalised and targeted emails. They stumbled on the problem working on Invc.me. Hexton was trying to encourage repeat usage from people who had downloaded the app. He wanted to target users based on the activity they had shown, for example maybe they’d used particular functions of the app but hadn’t uncovered its complete potential. “I really wanted to target people in a more personal manner,” Hexton says. “Trying to be more personal with customers is very important. We wanted a tool that allowed us that granularity [very specific targeting] and there wasn’t anything to fill that need.”

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