The Reserv Pivot: When Saying No to Revenue Saves Your Business

The Reserv Pivot: When Saying No to Revenue Saves Your Business

The hardest decisions in business aren’t between good and bad options. They’re between revenue today and viability tomorrow. In a recent episode of Category Visionaries, Martha Dreiling, Co-Founder & President of Reserv, walked through the brutal calculus of shutting down a product line that was generating real revenue—and why walking away from paying customers was the only path forward.

The Revenue Trap

By late 2023, Reserv’s self-service product had established a revenue stream. Customers were signing up, paying monthly or annual fees, and using the product. The business was generating income. On paper, this looked like validation.

But revenue alone doesn’t make a business sustainable. The self-service customers were paying around $4,000 annually with churn approaching 50%. “You’re never going to make enough money off of those customers to recoup your cost of acquisition,” Martha states bluntly.

This is the trap many founders fall into: conflating revenue with viability. Revenue proves someone will pay. Viability requires that the revenue exceeds the fully-loaded cost of acquisition, service, and retention by enough margin to build a real business. Reserv’s self-service product cleared the first bar but failed the second.

The decision facing the leadership team was whether to continue investing in a product that generated revenue but destroyed value, or to shut it down and redirect resources toward customers with fundamentally better economics. Choosing the latter meant voluntarily reducing revenue in the short term—a decision that looks insane on a spreadsheet but sometimes represents the only rational strategic choice.

The Real Cost of the Wrong Customers

Beyond the unit economics, the self-service product was creating a more insidious problem: it was destroying Reserv’s ability to attract the right customers.

“We were getting inquiries from people who wanted to use the self-service product and thought that was what Reserv was,” Martha recalls. The brand confusion wasn’t just internally frustrating—it was actively preventing enterprise deals from closing.

When enterprise prospects researched Reserv, they found messaging, case studies, and positioning built around self-service. The disconnect between what they saw in marketing and what sales was pitching created confusion and killed trust. “And so when they came inbound and we’re like, oh, you know, average deal size is 250k a year, they were like, what? No, we were going to spend $99 a month.”

This brand damage had a calculable cost. Every enterprise deal that stalled due to positioning confusion represented $250,000+ in lost annual revenue. Every sales cycle that extended because of brand confusion added costs and reduced close rates. The self-service product wasn’t just failing to generate sufficient revenue—it was actively sabotaging the high-value deals that could sustain the business.

Industry analysts faced similar confusion. “What are you? Are you WordPress? Are you, you know, Contentful? Are you Sitecore? Like, who are you?” The inability to clearly articulate Reserv’s market position made it exponentially harder for prospects to understand where Reserv fit in their evaluation process.

The Opportunity Cost Calculation

Perhaps the most important metric in the decision to kill self-service was opportunity cost. Every hour engineers spent on self-service features was an hour not improving the enterprise platform. Every marketing dollar optimizing self-service conversion was a dollar not generating enterprise pipeline. Every support interaction with a $4,000 customer was time not spent with a $250,000+ account.

“Average deal size is 250k a year,” Martha notes about Reserv’s enterprise business. The math is stark: one enterprise customer generates the same annual revenue as 62 self-service customers. But the cost to acquire and serve that enterprise customer is nowhere near 62 times higher.

In fact, the enterprise motion likely requires similar or even lower customer acquisition costs when measured properly. Yes, enterprise sales cycles are longer and involve more touches. But they don’t require building and maintaining separate product infrastructure, supporting high-volume low-touch customer service, or optimizing for self-service conversion funnels.

When you factor in the opportunity cost of team time, engineering resources, and organizational focus, the self-service product wasn’t just unprofitable—it was actively destroying company value by preventing the team from capturing vastly more valuable opportunities.

The Decision Framework

How did Reserv’s leadership team ultimately make the call to shut down a revenue-generating product? Martha’s experience suggests a framework that other founders can apply when facing similar decisions.

First, calculate true unit economics. Don’t just look at revenue. Calculate the fully-loaded cost of acquisition including product development, infrastructure, support, and marketing. Factor in realistic churn rates based on actual data, not aspirational projections. “You’re never going to make enough money off of those customers to recoup your cost of acquisition,” was the conclusion after honest analysis.

Second, assess brand impact. Is the product or customer segment helping or hurting your ability to attract your ideal customers? Reserv’s self-service product was actively damaging their enterprise brand, creating confusion that killed high-value deals. The cost of this damage exceeded the revenue the product generated.

Third, consider opportunity cost. What could the team accomplish if they redirected all resources currently allocated to the underperforming product? For Reserv, refocusing entirely on enterprise meant the potential to close deals 60+ times larger than self-service contracts.

Fourth, evaluate strategic alignment. Does this product line advance the company’s long-term vision, or is it a distraction from the core mission? “We’re really focused on complex digital experiences for organizations that have a lot of sites or really complicated sites,” Martha explains about Reserv’s repositioned strategy. The self-service product served simple use cases for small teams—the opposite of this focus.

The Courage to Act

Even with clear analysis showing the self-service product was destroying value, making the decision to shut it down required courage. It meant admitting years of investment had been misallocated. It meant accepting short-term revenue reduction. It meant telling customers their product was being discontinued.

“Don’t be afraid to make hard decisions quickly,” Martha advises. “The longer you wait, the more brand damage you do, and the harder the recovery becomes.”

This is where many companies falter. The analysis shows the problem, but the decision keeps getting delayed. Maybe next quarter will be different. Maybe we just need to optimize the funnel. Maybe we can thread the needle and serve both markets. Each quarter of delay accumulates more brand damage and opportunity cost.

Reserv’s experience demonstrates that once the analysis is clear, speed of execution matters enormously. The longer a failing product continues, the more it damages the brand, distracts the team, and prevents the company from capturing better opportunities.

The Rebuild Requirements

Shutting down self-service was just the first step. The real work was rebuilding capabilities that had atrophied during years of focus on the wrong customer.

“We basically had to start from zero,” Martha states. “We didn’t have any demand gen engine. We didn’t have any of the like basics in place.”

This is the hidden cost of pursuing the wrong strategy: not just the direct losses, but the degradation of capabilities you’ll need when you eventually correct course. Reserv spent years optimizing for self-service signups while their enterprise demand generation muscle atrophied. The decision to refocus on enterprise required accepting that rebuilding would take time and investment.

Lessons for Other Founders

The framework Reserv used applies beyond their specific situation. Any time you’re serving customers or markets with poor unit economics, causing brand confusion, creating significant opportunity cost, or misaligning with strategic direction, you face a similar decision.

The key insight is that revenue alone doesn’t justify continuing. “You have to be just so buttoned up and really smart about how you spend your money and like what you say no to,” Martha emphasizes. Sometimes saying no to revenue—even significant revenue—is the right strategic choice.

The courage to make this decision separates companies that muddle along indefinitely from those that refocus and build sustainable businesses. Reserv chose the harder short-term path: accepting revenue loss, rebuilding from fundamentals, and refocusing entirely on customers with viable economics. The alternative—continuing to optimize a fundamentally broken model—would have been easier in the moment but fatal over time.

For founders facing similar choices, Reserv’s experience offers a clear lesson: when the analysis shows a product or customer segment is destroying value, the right decision is usually to exit quickly and redirect resources toward viable opportunities. The revenue you walk away from today might be the cost of building a sustainable business tomorrow.