Iterate: Be Willing to Change What's Not Working

Iteration is the art of adapting your business concept or strategy based on real-world feedback. Think of it like tuning an engine. You start with one idea, then adjust as you hit bumps on the road. The best managers, business owners, and entrepreneurs are relentless learners, constantly tweaking products, services, and strategies to meet evolving market demands.

Instagram started as a cluttered check-in app called Burbn, YouTube was once a dating site, and Slack was an internal tool for a failing gaming company. They all succeeded by tweaking or ditching their original concepts as they figured out what worked.

You can iterate in three big ways:

1. Product tweaks – Refine features to match what users love.
2. Customer shifts – Target a better audience or fulfill a different need.
3. Business model changes – Adapt pricing or sales channels to drive growth.

Product-related iterations pertain to changes in the product or service offered by a venture. These may include the following:

• Zoom-in iteration. A zoom-in iteration occurs when a founder or product manager discovers that one feature (or a few features) of an initial product or service is (are) the most valuable for users, and the founder decides to zoom in to make that feature (or features) the whole product.
• Zoom-out iteration. A zoom-out iteration entails expanding the feature set of an initial product or service, going from just a simple product or service to a more expansive suite of offerings in the product or service.
• Technology shift. A technology shift entails shifting the underlying technology at the core of a product. This could be because the initial technology does not work as intended or because a new technology has emerged that is more valuable for the product or service being developed.

Customer-related iterations pertain to changes in the customers served and the means for connecting with those customers. These may include the following:

• Customer segment shift. A customer segment shift is simply changing the segment of customers being served.
• Customer need iteration. A 'customer need' iteration is a shift in a business’s core proposition to focus on a different customer. In other words, the manager or founder changes what the business does to focus on a different customer's “job to be done.”
• Channel change. A channel change is a shift in the channel that a venture uses to distribute and deliver its product or service to customers.

Business model-related iterations pertain to changes in the basic business model of a venture. A business model iteration may include the following:

• Pricing pivot. A pricing pivot is a significant shift in the price point for a particular product or service. In some cases, such a pivot may entail dropping the price or even making a product or service free. In other cases, it may entail increasing the price to increase profit margins or create a better balance between supply and demand.
• Value capture change. A value capture change is essentially a change in the mode, mechanism, or timing for collecting revenue from customers. It might entail shifting from a once-off transaction to a subscription model, as many software firms did as they transitioned to a software-as-a-service model. It might entail shifting from an advertising-based model to a paywall model or vice versa. It might entail moving from a pay-for-service revenue model to a retainer-based revenue model or from a commission-based model to a fixed-fee model.  
• Cost structure change. A cost structure change is just what the label implies, making some changes in the business to radically alter the cost structure.

Beware the Resistance

Research has shown that we often resist iteration because we’re emotionally attached to our ideas. Entrepreneurs sometimes blame customers instead of listening to them. The fix? Take a step back. Imagine your best friend owns your business. What would you advise them to do based on the feedback you're receiving?

If you stay open to change, keep learning, and act on what you discover, your business can achieve next-level progress.

“Give me an entrepreneur with a lot of courage, gusto and who iterates rapidly, and I will back that person day in and day out.” — Doug Leone, American venture capitalist

“Innovation comes from long-term thinking and iterative execution.” — Reid Hoffman, American internet entrepreneur