How to Manage a Turnaround

The Startup Help Desk

In this episode we answer questions about turning around your startup. Startup journeys are hard, and it's likely you'll need to turn things around when they start to go badly. We are here to help! In this episode we answer questions including:

• What do I tell my investors about a big pivot?
• How do I hold my team together when people start leaving?
• How can I recapture growth after it stops?

All of these questions were submitted by listeners just like you. You can submit questions for us to answer on our website TheStartupHelpdesk.com or on X/Twitter @thestartuphd - we'd love to hear from you!
Reminder: this is not legal advice or investment advice.

Q1: What do I tell my investors about a big pivot?
Your investors invested in you; they expect challenges. Do not delay in communicating with them, as it will only reduce their ability to support these next steps and it could erode their trust in you.
What you should be doing for your pivot:
- Restarting the customer discovery process.
- Building your wait list.
- Testing workflows.
What you should share with your investors:
- Runway.
- Burn rate.
- Timeline for relaunch.
- Current progress on customer discovery.
- Interest levels.
Communicate early, explain your decision, and explain your process for what’s next.
Q2: How do I hold my team together when people start leaving?
People leave for a lot of reasons, not always the ones you think. Having multiple people leave at once is more common when a key executive leaves, as these executives may have hired the departing employees. Instead of brainstorming ways to prevent employees from leaving, focus on giving them a reason to stay.
In many ways, your company culture is a “product”: it is important to build it intentionally so that your company culture achieves your desired outcomes.
Anytime others follow someone else’s departure, investigate what went wrong in order to avoid the same mistake. While it may be that these employees are simply following the departed executive to the next opportunity, it is also possible that there is a more fundamental issue that needs your attention.
Q3: How can I recapture growth after it stops?
First, is it you or is it the market? Losing product/market fit is common. That doesn’t mean that you can take it for granted that you will find it again. It’s important to move quickly.
Take a hard look at your fundamentals. What changed? Where in the funnel is growth breaking down?
- Are your distribution channels no longer working?
- Are you having a hard time closing the final sale?
- Is your price point off?
- Are you seeing high customer churn?
- Has your use case changed?
Focus on testing and experimentation to find where the problem exists and how to address it. Once you have isolated the issue and opportunity, you can choose the best response, such as:
- New marketing channels.
- New features.
- Better reliability.