Pivoting Your Product: The Good, The Bad, and Everything in Between

I’m a second-time founder. Already.

I can hear you saying, "But Sam, that’s not what your LinkedIn says. What gives?"

The first company I founded was TestBox. The second company I founded was TestBox.

In the past six months, we have completely pivoted TestBox. We've revamped our business model and turned our go-to-market on its head. While we still use the foundation the TestBox marketplace was built upon, our roadmap is influenced by an entirely different end user.

Needless to say, we’ve been pretty busy this year.

We hear about pivoting in early-stage startup successes all the time. Slack (initially a gaming company) and Shopify (originally a snowboarding online store) are famous examples. 

But how do you know if you need to pivot your company? How do you know when it’s time? How do you make it happen? And what are the implications of that decision — both the good things we hear about in the success stories and the unfortunate things that aren't as widely discussed?

The beginning

TestBox started as a marketplace. Our mission was to “Make buying software not suck.” 

We built a platform to enable buyers to test drive and compare different software products from the same category side-by-side, with AI-generated data and use cases all built out so you could A/B test every feature/function in all of the products on your shortlist. 

For the first time, you could do a true apples-to-apples comparison of HubSpot vs. Zendesk vs. Intercom, all without ever needing to talk to someone or build a single thing in a free trial. 

The TestBox marketplace was free for the end buyer, paid for by software vendors as part of partnership agreements. It was an absolute utopia, perfect in every way. 

On our launch day, we had everything we wanted. We were in the top ten on Product Hunt, and we were featured in its newsletter the next day. We had our first converted customer via TestBox within two weeks of launching. 

We had companies like TikTok testing products on TestBox. Within a year, we had TestBox “Test Drive” buttons on G2. It seemed like we were, in fact, building the software buyer's utopia. 

The feedback from the buyers who used TestBox was exceptional. No one had ever had such a wonderful software buying experience — one where they had the full set of information they wanted at their fingertips so early in the buying journey. 

And the feedback from the vendors on our platform was great as well. TestBox leads closed faster than other sources (often within a week or two) and at a significantly higher win rate. 

Everything about TestBox looked wonderful to the outside world, and we were doing all the right things. 

The messy middle

Building marketplaces is hard. Everyone says it. I’m another person now who deeply believes it.

The first problem we ran into was generating enough demand to scale the business. While the marketplace had no competitors in terms of its functionality, we did have marketing competitors: our own partners. 

The keywords we needed to rank for, the ads we wanted to run, the events we wanted to sponsor: our partners were all competing for eyeballs on those same channels.

Over time, we realized that we were trying to change 30 years of software buying behavior with a marketing budget of just 2.5% the size of just one of the larger vendors on our platform.

And our struggle to generate demand created another problem: it was difficult to secure new partnerships. 

Partnering with us wasn't an insignificant ask. We needed our partners to do a small amount of engineering work to integrate with TestBox, and we needed them to commit to a revenue share agreement for any leads we sent them. To commit, they wanted to see that we would be able to send them lots of new leads.

But to use TestBox, software buyers wanted to be able to compare all of the tools on their shortlist side-by-side. If they were going to have to go directly to the vendor for some, TestBox was less useful.

To secure partners, we needed buyers. To secure buyers, we needed partners. We had a chicken and egg problem.

And even for the partners we did secure, it was difficult to realize revenue from them. Some thankfully had sophisticated systems for paying partners out; for others, we had to manually compare leads using Crossbeam and hope that they would pay without pushing back.

Over time, it started to feel like we were pushing water uphill with a rake. We just couldn't generate the demand we needed to secure the partners we needed to earn the revenue we needed to keep building.

The light at the end of the tunnel 

Though we were struggling to bring the marketplace to market, we did have happy partners. They understood we had something special. 

In the middle of 2022, one of these partners approached us and said: “TestBox can demo our product better than we can ourselves. Could we use it internally to sell? It would save us a bunch of time and effort.” 

“How much would you pay us?” I asked. We agreed to build it for 10% of the first-year contract value of any of their deals that closed after using Testbox.

Over four weeks, we repurposed the product for them, and within a few months, we were earning far more from them using TestBox directly than we were before. Best of all, their win rates on qualified opportunities doubled after they started using TestBox. 

After a couple of months, we thought, "If this partner wants to use TestBox this way, what about our other partners?" 

A few months later, we tested this with a much larger company. We started to see the same results. They were closing deals at a 25% higher close rate when TestBox was involved in a deal. There was something there. So I started to invest in a sales team. More product. More development. 

We hired an incredible marketer and asked her to focus on the marketplace while we did outbound sales on the vendor product. We had engineering and product working on two things at once. Our sellers were trying to build partnerships and sell our product. It was just too many things at once.

It feels like it should have been pretty obvious that we needed to make a change when we made more revenue in two weeks with the vendor-facing SaaS product than we had in a year on the marketplace. 

But all of us were desperate to make the marketplace work. That’s why we started TestBox. That’s why people joined the company. That’s who we were. Even if it was doomed for failure. Even if the ship was inevitably going to go down. 

The end

We’d spent two years pushing water uphill with a rake, and suddenly a downward-facing stream had emerged. But we were resistant to jumping in it. We wanted to be able to have one foot in the stream while still raking water.

I held onto the marketplace product for too long. It’s an age-old mistake. I was so emotionally invested, and so was everyone on the team. I didn’t want to disappoint anyone. I knew that if I shifted the business, there would be people who didn’t want to work here anymore. 

I didn’t change because I was scared. 

In June 2023, I took time off for my wedding, and we left for our honeymoon. It was the longest period of time that I’ve ever spent not working actively on TestBox each day, but, of course, the back of my brain was still whirring — just a little quieter than normal. 

Before I left, I realized that the whole team was feeling this frustration and tension at being pulled in two different directions at once. I was beginning to feel like something had to change. 

I came back from my honeymoon to a six-page document from my marketing leader stating that she no longer believed we could make the marketplace work given our budget and runway constraints — constraints that were compounded by the complexity of trying to bring two products to market at once. For the future of the business, she felt we needed to go all-in on the SaaS product. 

It was funny because I had come to that same conclusion while on my honeymoon. 

Within 30 minutes of being back at my desk on that Monday, I told my leadership team that the change was happening, and it was going to happen fast. 

There was resistance, understandably. We were emotionally attached. None of us wanted to do it, but there was a dawning realization that we had to. 

One leadership team member really wanted us to stick with the marketplace. I asked them to write the case for why we should stick at it, but — just as importantly — the case for why we shouldn’t. A week later, they were on board as well. It was clear what we needed to do. 

We spent significant time figuring out the why behind the change and how to communicate it to the team. We spent a long time determining what it would mean for our people. What about our product? Marketing messaging? Our former users? Our current partners? We were basically shutting down the company and restarting again. 

In August 2023, we officially sunset the marketplace and went all in on the product that we'd built off of the back of it for sales and marketing teams.

It felt incredibly relieving. And it has absolutely proven to be the right decision. 

TestBox 2.0

The software we built to make the marketplace work was revolutionary. No one had ever done anything like it before. And it's that same technology that powers TestBox today; we're just building the product for a different set of customers.

Sales and marketing teams use TestBox to deliver personalized demos and POCs to their leads. Just like the tools buyers could test on the marketplace, we preconfigure our customers' products with realistic data and functional integrations. And just like the marketplace, there are helpful guides in our sandboxes to make testing and understanding tools simpler for buyers.

In essence, we're delivering the exact same thing to buyers as we did with the marketplace; it's just delivered by the vendor — a more familiar touchpoint — instead of through us.

Through our customers, buyers still get what they want — to get into the products they're evaluating and test-drive them for themselves. We're still delivering on the original mission of TestBox, but we're now meeting our customers, and their customers, where they're at today.

What I learned from pivoting our product

As a first-time founder, I learned a lot from this process, so I wanted to offer some advice to other founders out there who may be facing the same dilemma.

How to recognize when it's time to pivot

• You and your team have done most of the things you hypothesized would work for your product to succeed, and they didn’t lead to your dream results.
• You are forecasting demand and looking at the economics for the business, but the math just isn’t making sense.
• You’re not hearing the excitement and urgency you need from your customers; there is an alternative to what you’re offering that already works well enough.
• You are directly competing with market forces or trying to create a huge behavioral change without a significant war chest backing you.
• You’re worried. There’s something inside of you saying this doesn’t feel quite right.
• You can't find product-market fit. It's easy to oversimplify product-market fit and think of it as building something no one wanted. But in our case, I think we just built something people weren't quite ready for. The inability to find product-market fit is sometimes the result of being too far ahead of market trends.
• Most importantly, there's something about your product that people are asking for and excited about that you could shift your focus to.

The hard things about pivoting

• You’re in denial for a while, and then when you know you need to shift, you probably berate yourself for not doing it sooner. It’s an emotional journey, but it's a key part of the learning curve for a CEO or founder.
• We knew pivoting would lead to us saying goodbye to many of our employees who had joined because they were inspired by the vision for the marketplace. It was sad, but we also are excited to see what they go on to do, and I know that having team members in place who are truly energized by our new journey is what we need to succeed.

The great things about pivoting

We pivoted, and immediately (for us anyway) things felt better: 

• I was able to put all my energy into selling and making sure our customers were happy.
• Before the pivot, it was a struggle trying to communicate the value of two completely different products. Our website was a mess of landing pages and blog posts that were targeted to completely different, wholly unrelated audiences. Now, it's focused and clear.
• I immediately got way too busy to service all of the inbound leads that were coming in (we don’t do outbound at all). It was the exact opposite problem we had with the marketplace: with very limited marketing effort, my calendar was flooded with demo requests and conversations with deals that were progressing toward contracts.
• The pivot created focus and cohesion among the team. We were once again aligned on a single goal.
• Internal decisions have become more streamlined, and it's easier for a single team member to have the confidence they need to make those decisions themselves.
• Hiring became easier. We now know the backgrounds that we need. And having a shared, focused vision inspires people to want to join us.

Tactical first steps toward pivoting

Deciding to pivot your business is just the first step in a long journey. Here are some of the things we did after making the decision that you might want to prepare for:

• Bring your board on the journey. When you have the first inkling that you might need to pivot, bring it up with your board. This isn't something to tell them out of the blue. Involve key board members as needed as you go through the announcement process.

• Discuss it with your leadership team in person. Have another leader on your team do an analysis in advance to be shared in person. Then, have a discussion on the decision — not the analysis. 

• Communicate the change with your team. This isn't a decision you want to just casually drop into your company announcements Slack channel. We announced our pivot to the whole team at an on-site and had every company leader explain why they felt the pivot was the right decision.

• Expect departures. When any company makes a major change, it's typical for some team members to decide to move on. We told people during our announcement that we understood if the pivot meant that TestBox was no longer the right place for them. Many did move on over the course of the next several months.

• Communicate the change with impacted customers and partners. Go into those conversations with specific communications around what the change means for them and a detailed timeline for when changes will happen. 

• Update your messaging. Conduct a full audit of your website, ads, third-party profiles, etc., determine what needs to be changed to reflect your new messaging and positioning, and make those changes as soon as possible so you don't continue getting new leads for a product you're no longer supporting.

• Redesign your product roadmap. Our product and engineering leaders spent a week working together in person to develop a roadmap for our new product.

• Identify what your new company needs. If you're moving from product-led to sales-led, you might need to hire a sales team. If you're moving from a free product to an annual subscription model, you might need to bring on a customer success team.

• Start connecting with potential future investors. If you're VC-backed, get going as soon as possible sharing your new approach with investors and explaining why it's an exciting new future for the business. 

Beyond that, I also found it's important to reinforce the reason for the change over and over again to make sure everyone fully understands why the decision was made and to get them on board with the new vision for the business.

Final thoughts

My guess is that if you're reading this, you’ve also read a bunch of articles and business books. There’s not much new in me telling you the importance of pivoting for companies. 

The hard part of pivoting is the tactics. I learned these by fumbling my way through, and that will likely be part of the journey for you as well. 

However, if I can leave you with one thing, it would be the following: 

When it starts to feel like you’re pushing water uphill with a rake, maybe you are. Take a step back, re-survey the landscape, and see if there are different pastures that you haven’t looked at in a while. Making the change may unleash you in ways you previously only hoped for.