When you begin your startup journey, you may have a clear idea of your product or service, goals and company direction. However, this original idea may not always be the one that eventually pays off.
Many startups choose to go in a different direction, or start afresh by undergoing what’s called a ‘pivot’.
Pivoting might be a viable option for your startup, but what is it, and should you do it?
What is a pivot?
For the purposes of a startup, a pivot is a “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” Eric Ries – The Lean Startup
Put simply, a pivot is a change of direction for your startup. Whether it’s the audience you’re targeting, the focus of the product or even your business structure, a pivot could make the difference between startup success and failure. There are many elements of a company you can change through a pivot, which are essentially summarized by Forbes as:
- Zoom-in – Building product features into standalone products.
- Zoom-out – Reversing the above and consolidating a product.
- Customer segment – Reassessing who your actual customer has become.
- Customer need – Is the problem your business solving for your customer still relevant.
- Platform – Is an application or a platform the most suitable solution for your customer?
- Business architecture – Should your business be “high margin, low volume” or “low margin, high volume”?
- Value capture – What is the ideal monetization or revenue model for your business?
- Engine of growth – Should you be using a viral, sticky or paid growth engine?
- Channel – Are you optimizing how you deliver your product to customer? This can include revising your pricing, feature or competitive positioning.
- Technology – Can you improve on your tech to provide pricing or performance efficiencies to your customer?
It can be tough to initiate a pivot as it requires a process of identifying that there is something wrong about an aspect of your business. However, successful startups will quickly progress from the stages of acceptance to remedying these potentially critical failure points.
How to pivot your startup
Pivoting is not a decision to be taken lightly or irrationally. It will significantly change your business, so think hard about the ramifications. Here’s what you need to consider before pivoting:
- Know when and why
Choose to pivot at a point where you know that your original idea is no longer working. Brainstorm the reasons for the failure, and let ideas for the direction you pivot towards come from that.
Don’t just throw away your original concept. Learn from the mistakes you made, the experience gained and use that to drive your new venture. Think of a pivot as a ‘revision’ rather than a complete overhaul.
- Plan and test
Planning is essential. Have clear goals for your pivot outlined from the start and plan how you are going to measure success throughout your startup journey.Before jumping in with a complete pivot, test elements such as target audience and product objectives by conducting research, focus groups and looking at industry data.
- Get your team on board
This can be tricky as your team will have signed on to your original idea. Let them help with the pivoting process. Keeping communication lines open and make sure no one gets left behind pining for the old idea.
Don’t be afraid to pivot, and do it over and over if you have to. It could be the change that defines your success.