Step 7: Created a plan for strategic pivot
Found the fundamental problem with the business model
The fog created by a fragmented product and insulation from the users had been lifted. With this cognitive burden lifted, we now had the freedom to start thinking proactively rather than reactively. As it turns out, the problem was right in front of us all along. By focusing on trying to attract creators, without whom the site has no value, VideoShops faced an uphill battle. Consumers would never come to VideoShops without content, but nobody would create content for it without an audience. Moreover, we had to find a match between participating affiliate products and creators who wanted to promote them.
Flipped the business model on its head
The solution we came up with was blunt but effective and obvious in hindsight. The Web 2.0 approach of user-generated content faced the classic "Cold Start Problem" and a startup operating on a limited budget in a faltering economy could not hope to solve it. Instead, we proposed that the site create its own content using semi-professional creators, and abandon both the A-listers and independent creators for the time being. This would free up development resources that would go into creating simple but powerful editing tools for creators, and allow them to go into creating a compelling consumer app.