Pivoting in market development projects

As market development project managers we should come to realise that our projects are more of an entrepreneurial endeavour than an execution plan. 

There has been much discussion on what works and what doesn’t in projects working on market and private sector development. Most projects are required to commit to pre-planned project outputs/outcomes to obtain funding. Even though the project's business ideas are still at the hypothesis phase at the start of project, funding requirements impose an implicit assumption that the basic business model is known and that the project can start at the point of execution of that model. A project is most likely to be considered to be completed if it has neatly run through all the activity lines and depleted its budget.

It should come as no surprise that these projects regularly see themselves questioning their impact (hoping that they do review their work critically) or are questioned by the market actors. The reason is that when the pre-conceived intervention ideas with underlying mechanical assumptions are floated onto the bustle of the market; they often fall apart. Success or failure in this context is determined by whether or not the implemented plan has led to any meaningful market traction. Unfortunately this result tells us only about the project's plan. It rarely tells anything about the business idea itself, and whether there was actually evidence for market uptake potential or not.

Lately significant amounts of resource have been put into innovating new methodologies around impact assessment of such projects to understand the systemic level changes that these projects promise to deliver. Despite all these best efforts, assessment methodologies themselves face the challenge of execution: the academic efforts are on methodological novelty and gathering of rigorous data. As a consequence, assessment-learning loops are stretched out over too long a period - not feeding into real time project decision-making. Also if we consider them in a private sector setting, they are too burdensome for commercial ventures to apply.

As market development project managers we should come to realize that such projects are actually more an entrepreneurial endeavour than an execution plan. These projects aim to develop an often “sort of known” product for a currently non-existing market. Customer needs are usually unknown, and as such the solutions for that market. Key decision making in market system development projects are thus bound with fundamental uncertainty. Under such conditions a different project logic applies, namely that of progressive learning for the search for a scalable, repeatable business model. This is completely different from just implementing a known business model. In other words, what a market development project should come to grounds with is that it needs to run more like an entrepreneurial startup. As Steve Blank suggests, “any startup on day-0, is a faith-based initiative.” 

Who is the customer? What is problem are you solving for the customer? What is your sales plan for reaching out to that market? These are the first steps one needs to get validated in the startup development process. The entrepreneurs test these questions to find out whether they have a scalable repeatable business model before actually investing in scaling it up. The startup world has only over the last decade come to realise that confusing search priorities with execution objectives leads to catastrophic results. If you don’t respect this difference, you will end up burning a lot of money based of a set of wild assumptions.

One of the most fundamental development process manoeuvred in customer development is called “the pivot” (a term surfaced by the proponent of the “lean startup” movement, Eric Ries). Upon making the decision to pivot, the entrepreneur comes to realize that his/her vision needs a different strategy. The pivot does not mean that the entrepreneur was incompetent or wrong. Rather the pivot allows the entrepreneur to redeem (or even leverage) the costs of previous failure.

So what I feel is that market systems development projects are stuck with a problem of trying to force market based solutions or as some call it innovations onto a logic model which is inflexible. What these projects are trying to achieve at a systemic level is much of what a startup tries to achieve: to find a scalable repeatable business model.

Flexibility in funding and business development based on learning metrics will be key to dealing with these mistakes. Most importantly, project funding mechanisms need to build in conditions that allow project teams to look for the opportunities and make a pivot on project objectives.

There’s a famous maxim out of Silicon Valley about “Failing Fast”. “Fail Fast. Fail Cheap. Fail Often.” If you think of a business as an experiment, then the more times your experiment fails, the more you learn, the more you know for next time. The faster you fail and learn how to pivot, the closer to victory you progress.