Augustín’s decision to not validate his idea beforehand ultimately hurt his pivot. Validating an idea is important because it serves as a litmus test to evaluate if there is promise in the idea. Ideas can’t just be flying out the window without considering its potential consequences on a business. A decision like this requires deep connection and empathy with the customer/user – what do they value? What do they want? What makes them come back to a brand like Emilia? These questions should have been answered first before going into the deep end and failing miserably because at the end of the day, the end goal of the business is to serve its customer base. Without having the empathy to understand their values and needs, there is no way for the business to be in alignment with its customer base. Another thing he could have done is slashed the discounts in a particular category of his store to see the impacts of his strategy shift on a smaller scale. This could be viewed as A/B testing. This would have been a great substitute since it would have been a slow progression into a new strategy, therefore reducing risk.
If I were to advise Augustín, I would tell him to keep his discount strategy at the core of his business (for now). We know that this strategy won’t work in the long run, but it’s still worth considering that it has been a big differentiator for its customers from shopping elsewhere, as Shari Rudolph points out. With that, there must be thorough experimentation on different strategies that may work. This can involve A/B testing, user interviews/research, etc. The key is to start small, and once he starts to feel a little warm with a particular strategy, move forward in that direction. As Yashodhara Shroff, he must be open to constant change. In other words, he must be agile 😉
