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Posted: Thu Feb 13, 2025 5:06 am
Pivot of Business Architecture
There are 2 business models. The first is high profit and small sales volumes, the second is low margin and large sales volumes. Companies choose one of the business models; they cannot use both at the same time. If a startup initially chooses one of the models, it can subsequently pivot to change the business architecture.
How to Pivot: Step-by-Step Instructions
Step 1. Analyze the situation
Pivot can be useful when an organization or startup faces difficulties. Therefore, it is important to analyze the problems first. To do this, all internal and external factors that affect modern business are studied.
To do this, you need to answer the following questions:
Why is business not performing as expected?
What issues, challenges or risks led to the current problems?
Why do customers prefer not our product, but rather choose competitors?
What do competitors have that attracts people so much?
How is consumer purchasing power changing?
What key performance indicators are not being achieved on the project?
What are the current trends in the market?
Step 2: Come up with a new idea
Figuring out how to fix the situation can be challenging. One way to do this slovenia phone number list is to brainstorm. Gather your startup team to generate ideas for products, target audiences, analyze your business model, and come up with hypotheses for potential changes.
Make a list of hypotheses on how to change the business model, product or product promotion. Evaluate them using the ICE or RICE method.
The ICE method allows you to test business ideas based on three criteria:
Impact: What impact will the idea have on the business or users? Assess whether it solves a serious problem or increases revenue. Rate the impact on a scale of 1 to 10, with 1 being the least impact and 10 being the most.
Impact: What impact will the idea have on the business or users? Assess whether it solves a serious problem or increases revenue. Rate the impact on a scale of 1 to 10, with 1 being the least impact and 10 being the most.
Confidence – how confident are you that this idea will work? Rate your confidence on a scale of 1 to 10.
Effort — how much effort it takes to implement the idea. Consider time, team, and other costs. Rate the effort on a scale of 1 to 10, with 1 being the least effort and 10 being the most.
The RICE method is an extended version of the ICE assessment. It introduces an additional criterion:
Reach - Estimate how many users this idea will reach. For example, this hypothesis will reach 1,000 users per month.
All indicators are multiplied and the obtained values are compared. The higher they are, the higher the priority of the hypothesis.
There are 2 business models. The first is high profit and small sales volumes, the second is low margin and large sales volumes. Companies choose one of the business models; they cannot use both at the same time. If a startup initially chooses one of the models, it can subsequently pivot to change the business architecture.
How to Pivot: Step-by-Step Instructions
Step 1. Analyze the situation
Pivot can be useful when an organization or startup faces difficulties. Therefore, it is important to analyze the problems first. To do this, all internal and external factors that affect modern business are studied.
To do this, you need to answer the following questions:
Why is business not performing as expected?
What issues, challenges or risks led to the current problems?
Why do customers prefer not our product, but rather choose competitors?
What do competitors have that attracts people so much?
How is consumer purchasing power changing?
What key performance indicators are not being achieved on the project?
What are the current trends in the market?
Step 2: Come up with a new idea
Figuring out how to fix the situation can be challenging. One way to do this slovenia phone number list is to brainstorm. Gather your startup team to generate ideas for products, target audiences, analyze your business model, and come up with hypotheses for potential changes.
Make a list of hypotheses on how to change the business model, product or product promotion. Evaluate them using the ICE or RICE method.
The ICE method allows you to test business ideas based on three criteria:
Impact: What impact will the idea have on the business or users? Assess whether it solves a serious problem or increases revenue. Rate the impact on a scale of 1 to 10, with 1 being the least impact and 10 being the most.
Impact: What impact will the idea have on the business or users? Assess whether it solves a serious problem or increases revenue. Rate the impact on a scale of 1 to 10, with 1 being the least impact and 10 being the most.
Confidence – how confident are you that this idea will work? Rate your confidence on a scale of 1 to 10.
Effort — how much effort it takes to implement the idea. Consider time, team, and other costs. Rate the effort on a scale of 1 to 10, with 1 being the least effort and 10 being the most.
The RICE method is an extended version of the ICE assessment. It introduces an additional criterion:
Reach - Estimate how many users this idea will reach. For example, this hypothesis will reach 1,000 users per month.
All indicators are multiplied and the obtained values are compared. The higher they are, the higher the priority of the hypothesis.