What, When, and How of Startup Pivoting

What is pivoting?

Pivoting is a relatively fluid term, and entails a change in a startup’s business strategy, generally dictated by factors beyond its control. A pivot could be anything from changing how the product gets manufactured to shifting marketing efforts to appeal to new buyer personas.

A startup pivot occurs when a company shifts its business strategy to accommodate changes in its industry, customer preferences, or any other factor that impacts its bottom line. It’s essentially the process of a startup translating direct or indirect feedback into a change in its business model.

Examples of pivoting:

* Turn one product feature into a new product itself 

* Turn one product into a feature of a product

* Change a platform from app to a web app or vice versa

* Focus on a different customer set 

* Use a different technology to build a product

Why do startups pivot?

In the initial phase, there are chances that a startup might have skipped a specific aspect.

Pivoting, generally, happens after feedback is given either by the consumer or expert on the product or the strategy currently employed by the venture.

Other reasons for pivoting are:

* There is not much progress even after putting in tremendous efforts, money, and resources 

* There is too much competition.

* The company’s progress has plateaued.

* Only one of the company’s features or services gets traction.

* Customers do not respond to the products as expected.

* Their perspective on the industry has changed.

How To Pivot Your Startup: The Best Strategies

1.  Develop a prototype before you pivot

If you are contemplating pivoting your startup, develop a prototype first, and see if people would use it. Ask for feedback. Feedback at the beginning stages is essential for determining where the impact of the product would be the greatest. A prototype would also enable you to identify whether the product is a good fit for the brand. 

2. Pick goals that align with your business vision

As an entrepreneur, your vision statement must align with the changing market. It is important to re-evaluate what needs to be done and draw a business model pivot to meet the new objective. 

3.  Ensure your pivot gives out growth opportunities 

If you pivot in a totally new direction without giving much attention to the plan, you could fail again. To ensure you do not hit another roadblock, we would recommend two things –

a. Not expanding in the current market since you have already explored it. 

b. Perform extensive market research. 

4.  Consider alternative technology 

The technology world is constantly changing. For a startup to pivot, it is essential to be on top of the technology trends. If your business can incorporate the latest technologies, you would be able to pivot with the probability of success. 

5.  Keep the investors in the loop

At every pivot stage and when you take the decision, make sure the investors are kept in the loop at least six to eight months in advance. A drastic change without discussion with the investors can harm the relationship and make pivoting unachievable.  

6. Analyze what your competitors are doing:

Before pivoting, analyze what your direct competitors are doing and how you can do better. If you are planning to offer the same services or products as your competitors, you might not be able to see significant results. At the same time, look at how big your competitors are and if your startup can compete with them.

7. Understand your target market and problems:

If you are unable to sell your products and you can not find any problem with them, you might just be selling them to the wrong target audience. In that case, pivoting your business to sell the product directly to B2B companies can help you improve your sales and traction. 

Pivot Startup Pyramid: 

It helps founders evaluate which business area to change to drive maximum growth.

Layer 5: Customers:

The customers are the base of any startup. Everything from the issue you solve, the product you develop, and the technology it is built upon, depends on who the customers are. You can change and pivot the customers, but that will make you re-evaluate the entire pyramid. 

Layer 4: Problem 

There can be instances where the customers’ choice is correct, but the problem you are looking to solve does not matter much or is not existing. If you pivot here, you need to relook at the solution, tech, and growth plan. 

Layer 3: Solution 

The next step is to develop a product that would resonate with more customers than the ones currently in the market. Changes made at this stage should be growth-focused. 

Layer 2: Technology 

The technology choice is the key to developing your solution. Even if the products relate to the customers, the technology choice could be a hindrance to your retention and growth. 

Layer 1: Growth 

Every change in the pivot pyramid should be growth driven. Most experiments do not call for any change in the technology or product. Marketers tend to experiment with startup growth strategies to prevent the growth channels from becoming saturated or overly expensive.

Conclusion 

One thing founders struggle with when making the tough call to pivot is the fear of being branded with failure. The pressure to persevere is high in the startup community, But working at something that is not working is not perseverance.

The vital thing to remember about pivoting is that change is just part of the startup process.

Many things in life are a line, not a dot,” Casey Schorr, Co-founder of Printfection,observes, “Entrepreneurship is not a big-bang event to make a static vision come to life. It is a way of life, a crooked line always adapting and evolving.”

Sources:

https://www.startups.com/library/expert-advice/startup-business-pivot

https://www.feedough.com/startup-pivoting-101-a-guide-for-beginners