273. Planning Ahead and Pivoting Your Startup for Beginners in 2026 | Bae HQ IncuBaetor 5/6

0:00When you're building your first startup, that planning ahead can feel so odd because it's so different to maybe other things you've experienced in life. And another big source of tension for so many people is knowing when to pivot. When do you go off your plans? So you need to stick both to a plan, but also know when to leave it. And that's what we're going to go through today. The first thing is that there are no normal timings for startups. How long is irrelevant? Because you look at all the different stories in the media. Some companies will go a million miles an hour and they get to 10 million revenue in two weeks.

0:33But not every company does that. And like an example is Canberra, for example, and Figma. are. Both of those took quite a long time to get to where they are, but then they've done incredibly well since then. So there are no normal timelines and you've got to work out what works for you, but also your industry. If your industry is moving fast, people are adapting fast, and a thing is changing, then you've got to keep up with that. If your industry is a bit more slow moving, then maybe you can get away with being a bit more slower. But this idea that, okay, I need to do this in week one, this is week two, this on like day 100, it's just not a thing.

1:06And you need to get rid of that mindset. You're not in the corporate world anymore where you have strict cycles. So you have to start with setting the long-term vision, right? Of what's the point of any of this? What's the dream? That dream is what you're running towards. And then the short-term goals you make in the in-between is like, how does that get you the next step towards that? So one thing that helps here is big, hairy, audacious goals or B-hacks, which is what is that thing that seems a bit crazy, but it's that delusional carrot that you're running after. Here's examples from a couple of other companies you might have heard of.

1:41So you've got put a computer on every desk and in every home by Microsoft, and then enable human exploration and settlement of Mars by SpaceX. And when Elon Musk said this, it sounds insane at the time, but when you look at as time goes ahead, I wouldn't necessarily bet against him doing that. and it's really interesting to see how something which might seem like delusional a few years ago could actually over time just become something which will get accepted and for some people certain character types those kind of huge goals is what gets them out of bed in the morning and gets them really excited to work on a problem so whatever it is you're trying to build whatever problem you're trying to solve that long-term vision is like if everything goes well what's the result of that and is that something which gets you out of bed is that something which excites you and then you pick short-term targets in the meantime right so you start with a primary metric and primary metrics generally should be along the lines of either user growth revenue growth or profit growth and at the beginning it can be user growth or revenue growth and longer term you probably go more towards profits right what you need to make sure you're doing is that you can set a target based on things that aren't necessarily results driven if people aren't using your product and you're getting results for them, then why are you doing it?

2:59Same thing with the revenue side, right? And this keeps you honest as a business and helps you to move forwards. And then you pick a secondary metric, which makes sure that you're not just gaming the primary one, right? So for example, it could be, how do you reduce your customer acquisition cost? Will you shut overheads? How do you reduce churn and retention? In the age of AI, with so many companies getting really fast revenue growth, how do you make sure that it's not just here today and gone tomorrow? and that's by reducing churn and retention. So you want both of these things to work in tandem, right?

3:30If you are doing incredibly well as a business, you should see that one of the top line metrics, but you need to make sure that it's not at the cost of something else. For example, some companies bear through huge amounts of venture capital to grow their revenue, but actually they don't serve their customers well and the churn and retention is really high or the churn is really high and the retention is really low and that's not really a viable business. So by using both these in tandem, that helps keep you honest and make sure you're on the right track. And looking at a more granular level now, you can use OKRs.

4:00And OKRs help make sure that you're working on something which is a particular task, but it relates to your long-term goal and relates to your short-term target too. So it was created by the guy, I think it was Intel or IBM, I forget now, but all credit to him, incredibly well. And this process has been used by so many different people since then. So you need to first of all think, what's the mission? What progress do you want to make? so that's your BHAG longer term and then outcome is like how do you check for making progress so your objective in this case is okay I want to get to this and then you need to then measure okay what is it that's going to tell me if I've done that or not because okay I want to get customers happy what does that mean right and here's a different time horizon so you can have a one month OKR you can have a two month OKR you can have a year OKR and what you want to do is make sure you don't mistake motion for progress.

4:52You could be really, really busy, but none of it's moving you towards your eventual target. So this is a little sheet that you can print off. And this is an OKR template that's easy to find online. So you put your objective in one corner. Expected result is the metric based thing. So, OK, we want to, like, let's say our objective is to reduce costs. Expected result is that our CAC is going to reduce by 10%. percent actual result is what happened and then you'd have to analyze and the key thing is analyzing why you didn't reach that target or if you did reach that target or excel that target why was that too and then the bottom is the targets the tasks related to that and make sure there's a particular person who's given responsibility for it and when you see to be done by because it's very easy to set loads of targets and dreams and then not deliver because you're not focusing on what's actual tasks i needed to get you there so now if we zoom out a bit right managing priorities as a startup founder is incredibly difficult because you can't have your cake and eat it, right?

5:52You can't say, okay, I want to have 10 million revenue. I also only want to work one hour a day. Usually, unless you're a prodigy, there's going to be a lot of hard work involved and you're going to need to understand what sacrifices you want to make and what you don't want to make. And an easy way to do this is to create a sacrifice list of the things you're not going to do. Maybe, for example, you can't grow into 100 regions at once. So on your sacrifice list, You're going to say, okay, we're going to focus on the UK market. And on the sacrifice list, we're going to not enter the US market, for example, at the beginning.

6:25And having this sacrifice list of things you're not going to do and shiny objects that look exciting, but aren't core to your business right now is really important. Another method, which I quite like too, is from Warren Buffett. And what he says is it is down the 25 most important things. And I think you can do this in both life and business. So what's the 25 most important things in your life? if your startup idea isn't in that top five why are you doing it and in the business when you have so many different ideas and directions you can go when you list out the top 25 things you then need to pick the top five and whatever the top five are is what you focus on and until they're done then you don't worry about this stuff afterwards and i'm very bad at this and it's something which i always need to use myself to make sure i'm in check is i can start off so different things and then the challenge is maintaining them and making sure that you get the results you want.

7:16So by being focused and chasing just one target or a few things at a time, it means you can get better results. And the better results, they mean you can have more money, more resources to then chase the other things on that list. If then plans are something I love too, where in towards the specifics milestone is reached, you don't spread your attention too thin. So say for example, with the podcast is that with the podcast, we say, okay, until we reach 100 episodes, we're not going to then add a new podcast. Let's say with the programs, until we reach a 9.5 level of happiness or customer feedback, we're not going to add, increase the number of customers because it can be quite easy for us.

7:58Okay, let's just keep expanding. But if we're not actually delivering on what we want to, then it's not a good idea for us to expand. So by doing if-then plans, it really helps. And for example, let's say you're doing different distribution channels you can say if you get to one million views regularly on Instagram then you're going to then build a TikTok or then you're going to then do events but what you want to try to avoid is trying to do too many things at once until you've got systems for different things so as you say there adding distribution channels launching new products refreshing brand all of these things can be distractions but if you're doing if then plan you can do them at the right time another key thing to do is keep it done unless you stay motivated because when someone has a lot of work involved there's a lot of different tasks to be done there's so much going on if you keep a list of things you've done it shows you're making progress and even if it feels like sometimes you're on a hamster wheel and you keep having to run faster you are making progress and things are happening that you're prioritizing and then what happened to most first-time founders felt that's just the reality of it but whatever you do if you stay honest and you look after yourself and you make sure that you're prioritizing what you need to prioritize then you're going to learn a lot and whatever you learn, that's going to help you in whatever you go to do in the future.

9:09And hopefully it's that your business takes off and does really well. But even if it doesn't, it doesn't mean time's wasted and it doesn't mean that you've made the wrong decision necessarily. But always think about your own financial circumstances and look after yourself. Do something like managing time, but then when do you know when's right to give up, right? So we look at iterations versus pivots. Iterations are small tinkers, right? It's more or less the same thing but you're just like changing a small thing at once right whereas a pivot is almost indistinguishable for you from what you're doing before it's a more major change and iterations all the time are normal and you're constantly making small changes small changes small changes pivots are more wholesale and sometimes some companies need to do them more regularly but ideally you don't want to be doing it all the time so signals to pivot rather than to iterate Number one is burnout, right?

10:00Do you just hate what you're doing? If you hate what you're doing every day and there's no end in sight, then pivot, right? Life's too short. Head turning. This is when I think of it as a meerkat, right? And if you're really excited by other stuff rather than your own company, that's probably a signal that maybe you're not in the right thing. Customers don't care. You're trying your hardest. Customer feedback isn't that good. Customers aren't really giving you the signals you want. Maybe it's time to change. team struggles you can't get the people motivated to work on a mission trying to work on you're not being able to get the right level of staff and it's just a struggle every day investors not biting if you need investors to keep you afloat because of the style of business you're doing and nobody wants to invest at a certain point you've got to look at it it's like okay are we just in the wrong industry and the point of things that keep listening to the feedback and if the feedback is something you start agreeing with like actually yeah they're right then it's time to pivot and one of the most insidious ways is stagnation where nothing is going terribly wrong but nothing is really going right either and if it's just okay if there is something which maybe your time could be better used doing that might be another time to pivot too then look at the ways to pivot right and there's seven that i've got here so first looking at your customer segment it could be that actually your product is pretty good you're just targeting the wrong customers.

11:25So one of my companies, for example, Tuck that I've invested in, initially they were targeting young people and students with a way to save money, but they realized that actually their best customers were people who were in charge of the household finances. So when they pivoted that way, they started doing a lot better. The next way is to pivot on the problem. Maybe you want to serve the same customer, but you want to change the problem you're solving for them because there's another problem which is more hair on fire. Product. So this is where looking at okay your product that you're making so your solution for the person's problem isn't the right one and you need to start again from scratch and look at different methodology feature as a product so this is where for example slack where one of the features they built was actually much more enticing than other things they were doing so if they double down on that feature that feature then becomes the actual main product and it's similar to internal with the external where maybe it's a tool that you're using internally becomes the main thing that people want to have access to as well.

12:26You might be pivoting your revenue model. So rather than being subscription, for example, you could be pay as you go. And maybe that's a better way of accessing the revenue source that you have available. And then seven is total pivot, where what you're doing now is completely unrelated to what you were doing before. And you have the same team, maybe, but that team skills are better suited to a completely different area and that's the end of this segment so hopefully that was useful and you learned a lot so this is the fifth episode of our incubator async so if you want to do this as part of a cohort you can wait for our incubator next cohort if you want to do the assignments and get our direct feedback on what you're building and to get our thoughts from where you are and like what your plans um whether your plans are the right plans for you, then you can also sign up for that too, which is a paid thing, if you want to get moving now.

13:20So I hope you enjoyed this and take care.