It’s time to retire the 3 Horizons Model because it’s quietly costing growth-stage tech ventures millions. The future belongs to the 3E Model.
Introduced by McKinsey, the 3H / 3 Horizons model has been a strategic staple for decades. You’ve probably used it. Maybe even still use it.
But the cold truth is: As the world evolves, so do the frameworks.
Last week, I broke down the three core flaws we’ve seen in the 3H model:
- It assumes you get to play a 12-year game. But in today’s tech landscape, you get 12 months if you’re lucky.
- It justifies delay and procrastination.
- It keeps teams busy optimising for H1 while tomorrow’s innovators are already disrupting the market.
At Pivotal, we’ve stopped using 3H altogether. It no longer reflects the way great companies actually evolve.
We’ve replaced it with something FAR more actionable: the 3E Model: Exploit, Experiment, Explore is the new kid on the block.
Here’s how it works:
→ EXPLOIT
These are initiatives where you squeeze every drop of value from what’s already working, even if it’s not the long-term play.
Raise prices. Cut operational fat. Optimize what you know is profitable. You’re not building the future here. You’re “funding” it. Think of it as squeezing the citron.
→ EXPERIMENT
Here, you test promising waters. You’ve got clear signals of demand. Now you need proof.
This is where you run commercial tests and pilots to validate the metrics of the potential next version of your business model.
→ EXPLORE
This is your long-range radar. You’re not chasing demand. You’re detecting “where” it might emerge.
Since there’s no market data to guide you yet, but the concepts seem logical: You don’t throw the whole company at it.
You assign selected, dedicated people to go deep: talk to potential customers, future partners, investors. Conduct interviews, run market explorations on professional AI tools. Use third-party intel to map the next big opportunity BEFORE your competitors spot it.
The beauty of E3 is: it doesn’t assume the world will wait for you.
It gives you a way to operate in three modes at once (exploiting, experimenting, and exploring) without letting one cannibalize the others.
In a “normal state”, most teams find their balance like this:
- → 80% resources: Exploit
- → 15% investment: Experiment
- → 5% investment: Explore
But in a pivot situation, Experiment and Explore tend to be much more intensive.
We’ve watched E3 model save $400K+ in wasted bets, recover 6 months of GTM velocity, and pull teams back from the brink of internal fracture.
>> Drop me a message if you want to see how we’d map this to unlock the next growth curve in your venture.