TT#005 - The REAL cost of pivots on your business...Apr 05, 2022
I used to think pivoting as a solopreneur was a form of progress.
As I was getting started, I was plowing forward at breakneck speed and embracing the startup principles I know to be helpful for entrepreneurs in build-mode, like "fail fast" and "take imperfect action."
I'd test different audiences. I'd test different messages. I'd test different offers.
And when things didn't pan out, I'd pivot.
I later realized that while I was taking a step forward here and there, I was just as frequently taking a step (or 2 or 3) backward. Because...
I grossly underestimated the cost of “vision switching" when it came to pivoting key aspects of my business.
Now, don't get me wrong. I'm an advocate of hypothesis testing and all the lean startup practices that go into building a business.
But here's the thing: If you overlook the total cost of each pivot, it's like being on a treadmill with the speed dialed way up.
Everything about it feels like you're making progress. But you aren’t going anywhere. Or worse, you're actually going backward.
If you want to consistently find work you love doing, for clients you respect, at rates you want, you have to establish a brand as an expert in your area of expertise.
When you establish a brand as an expert in a particular market, you automatically create the opportunity to charge more for your services.
It’s the “expert premium” people pay for peace of mind that you know what you’re talking about.
There are 2 aspects of branding that solopreneurs that are stuck in a perpetual state of pivoting often fail to realize:
- Brands take time to establish.
Brands are like a reputation. They take time to develop, and that's why they are so damn powerful. A strong brand instantly improves your credibility and increases trust because it takes time to develop.
- The return on your effort in brand building is exponential, not linear.
It's hardest at the beginning because no one knows you. As you get some traction, it gets a little easier. And as time goes on, your brand power starts compounding exponentially.
And this is why the cost of “vision switching" is higher than you initially realize:
Every time you pivot any aspect of your business associated with your brand, you're starting over. You're going back to zero, where it's hardest and you get the least amount of return on your effort.
It's the same compounding principle you see with money: Parking your money in a reliable market fund and letting it compound virtually always returns a hell of a lot more money than constantly moving money around chasing trends and absorbing costs.
(Warren Buffett once won a public bet with a high-performing hedge fund manager on this very concept, which you can read about here.)
Frequently or perpetually pivoting your business confuses the market and is a surefire way to keep you in a state of marketing that has the lowest return on your effort.
If you want to minimize the cost of “vision switching," you need to make fewer mistakes.
"Yeah, yeah, Captain Obvious."
Sounds obnoxiously simple. Yet I talk to solopreneurs every day that...
- Make decisions about technology and platforms on a whim...
- Change their headlines, bios, and website copy every month...
- Switch their focus between markets as quickly as their mood changes...
And are, generally speaking, impulsive when it comes to establishing their brand.
Which becomes their brand.
Here are 3 things we recommend to our clients to help make fewer mistakes, minimize the "cost of vision switching,” and build a deliberate brand as an expert…
- Do less, but better.
This is a term from Greg McKeown's book, Essentialism (if you haven't read it, please do).
And it's referring to our tendency to want to overcommit, do too many things, and end up doing them hastily and half-cocked.
Guess what that leads to?
Bad decisions that need to be corrected later.
- Create a decision impact filter.
Before you make a decision and start taking action, take a step back and determine what you actually want to happen as a result of the decision.
What do you want to accomplish? What does success look like? How will you measure success?
Dan Sullivan has a great tool called The Impact Filter, which you can get for free here.
- Sleep on it.
The "entrepreneur" in us usually wants to accomplish more than we realistically can, faster than is realistically possible.
It's a strength and a weakness.
And this may be blasphemous to some, but the key to making fewer mistakes is oftentimes just a matter of taking the time to sit on an idea and think it through - without acting.
Sometimes just a day, or a week, can help you avoid making a mistake that sets you back months - or years.
When you've made deliberate decisions and they don't pan out, by all means...
But don't use pivots as a crutch, or as an excuse for lazy decision-making.
They come with a cost that is often hard to quantify, and hidden costs are the most dangerous.
I’m on a mission to help 10,000 Solopreneurs & Executive Freelancers discover and enjoy a new lifestyle by creating income they deserve from wherever they choose doing work they love.
For a limited time, I'm offering a free audit of your client acquisition system and will personally help you clarify what’s working, what isn’t, and what to focus on right now to start winning your best clients - on demand.