Pivotal FailureA case study by Arrgyle

We focused on small businesses and recommending third-party software solutions to help them solve un-met business problems.

Based on customer and mentor feedback, we have learned that this business is not sustainable in its current form.

Validated Learning1. Businesses admit there are problems within their

business they are not aware of.2. They believe technology could potentially help them

realize and solve these problems.3. They value money over time.4. They say they would sign up for a free or cheap

service based only on web content if it was relevant to solving a business problem.

It’s a Numbers GameCreating a recurring revenue stream is difficult because it requires volume and demand.

In order to gross $250,000 in a year, assuming a 2% conversion rate, we would need to put our product in front of over 450,000 small business owners. The expense of this exposure is not cost effective.

SummaryThrough the lean process, we have determined which of our assumptions are accurate and which are inaccurate. Because of this we have learned that our model is flawed and will require us to pivot. If it weren’t for the Lean Startup Machine, this might have been a very expensive error.

We wish we had started with this idea on Friday so we could have pivoted during the event. Thank you LSM for all your help!