5 Strategies to Start Pivot Startup A la Akseleran, Moselo, and Kata.ai

Building a startup is not just a matter of creating traction and gain as many users as possible. Startups are actually thick with a culture of survival through the concept of “file fast, learn fast".

Then, what happens if the startup business you develop doesn't get it? traction which is expected? One of the answers is pivot.

Changing the business model, transitioning to a different service, or so-called pivot is no longer a new way in the startup industry. Several startups in Indonesia have done this, starting from pivot 100 percent by replacing brand companies and platforms to change the type of service.

When you decide to pivot, many questions will arise. Starting from what needs to be prepared, things to avoid, to how to get started.

To answer the question above, DailySocial summarizes various tips and strategies for pivot based on the results of our interview with kata.ai (pivot 2016) Acceleration (pivot 2017), and Moselo (pivot 2018).

For the record, these tips are not arranged in order of steps that must be done the first time.

Communicate with stakeholder

All agreed that startups must communicate with stakeholders if they want to do this pivot. Of course the main thing is the investors and the team in the company.

According to Kata.ai Co-founder and CEO Irzan Raditya, communication is important to provide understanding and readiness to investors and the team. In fact, there should be some time off between planning and starting pivot to employees.

"Do the right communication, especially investors to make sure you get the support from the shareholders to support and give clear understanding why you pivot,"said Irzan.

Meanwhile, for Moselo CEO Richard Fang, startups should avoid one-way communication about reasons and goals pivot. This means that every employee has the right to express their perspectives and concern them against pivot this.

A clear and sustainable business plan

Making a business transition is a big step that requires full commitment, both from the organization and other stakeholders.

Again, for Irzan, before meeting investors, a startup ideally has a clear and sustainable business plan to ensure this new business model can survive in the future.

“We research first before meeting investors. [After that], we were actually assisted by one of our investors to work out the strategic direction. It should be emphasized that when meeting investors, the plans we have must be clear and have the option pivot where to go," said Irzan.

As an illustration, Kata.ai, which was previously known as Yesboss in 2015, offers a personal virtual assistant service with the concept of conversational commerce. In its journey, this business model is considered lacking scalable and give impact large.

Therefore, the company then maneuvered its business in the following year by becoming enablers Artificial Intelligence (AI) which focuses on Natural Language Processing (NLP) technology.

Product-market fit be fundamental

The most common reasons we come across when interviewing startups are pivot: products and services not developing, or growth traction-its slow.

The above becomes a valuable lesson for Akseleran that product-market-fit is a very fundamental point for the survival of a startup business.

Akseleran started his business as a solution for distributing loans to SMEs in the form of equity participation. After six months of release, Akseleran decided pivot become P2P lending due to slow growth in lending. After pivot, Accelerator remains on the same target market, namely SMEs.

Co-founder and CEO of Akseleran Ivan Nikolas Tambunan revealed that the Indonesian market is receptive to equity-based funding. With the slow disbursement of loans at the beginning, this makes Akseleran products less scalable and no market fit.

Ivan also added, if the developed product has not been validated in the market when carrying out the process, pivot, startups should refrain from adding new human resources.

“From the start, we have to give full information about The roadmap products and business models. So they understand the changes made. Well, to facilitate motivation and to stay in one direction, it's good [the team] start small only," he said.

Focus on target market, not features

Another point that should be noted for anyone who is building a startup is how important it is to focus on what the market needs, not what the company wants.

No matter how cool or sophisticated a product or service is, it will be useless if consumers are reluctant to use it.

This experience was experienced by Moselo who was originally a startup provider chat commerce for creative products. Richard Fang believes that this usually happens to startups that are just starting out.

He admitted that initially his party was too focused on developing features so that they forgot the target they wanted to reach. When you want pivot menjadi marketplace offering creative products, the company finally began to focus on identifying the target market more deeply.

In addition, he said, pivot which has been carried out since August-December 2018 will actually make the company more relevant to consumers and businesses can profitable.

“So what we did [when pivot] is to sharpen the target audience Moselo. From the data we collect, we look for solutions that are suitable for them. Get to know pain point from the target because this can be a source of income for the business,” said Richard.

Measuring the limits of success pivot

Don't ask how many startups fail to do pivot. Lots.

So, as a startup player, it is very important to know what our limits are to ensure that pivot run successfully or vice versa.

From our interviews with the three startups above, each relies on parameters to measure success pivot this. Generally, the parameter is the number of users or Gross Merchandise Value/Volume (GMV).

For Kata.ai, Irzan revealed that post pivot In 2016, the company has experienced three to five times business growth, and has even made a profit in 2019. In addition, Kata.ai also has corporate customers from large-scale companies.

“Talk startup, talk Surviving. We have the data and see what parameters can be improved. As a startup conversational AI, we see user engagement-his. Previously only tens of thousands of users, now millions. Income has also increased, he said.

While Moselo from the start did pivot to get traction significant. Therefore, the number of transactions, the number of customers, and GMV will be the main parameters.

"Since pivot, we have achieved a GMV growth of 320 percent with the number of users reaching 50 thousand. We continue track parameters to know whether this initiative succeeds or fails,” said Richard.

In line with Moselo, Akseleran validates the action pivot this with traction. Based on company data, Akseleran was only able to disburse Rp2 billion in funding when it was still an equity-based lending platform.

"In order to have product-market fit, we validate it with traction. After changing to P2P lending, we disbursed more than Rp1 billion in the first month. Then it increased to IDR 30 billion in six months. It validates whether pivot going well or not.” Ivan said.