Why and When Should a Startup Pivot?

Few people know that behind the phenomenal success stories of YouTube and Instagram lies a powerful concept - pivoting. YouTube, originally designed as a dating site, transformed into the world’s leading video platform, while Instagram pivoted from a locationbased check-in service to become a thriving social media giant.

By founderlabs

Pivoting involves altering a company’s business model, product offerings, or marketing strategy to find success. This transformative strategy can be risky but holds the potential for tremendous growth and staying ahead of the competition. In this article, we delve into the art of pivoting, when to consider it, and how to successfully execute this game-changing maneuver to drive startup triumph.

What is Pivoting?

Pivoting refers to a company or a business changing its original business model or product or offerings to find success. A change in the marketing strategy to appeal to new customer categories is also a part of the pivot. This relatively fluid concept always involves a change in the business strategy of a startup.

This strategy of changing gears to a new business model is hard and risky. Startups should embark on a pivot only if they are convinced that it will be worth it. A pivot can happen at any stage of a company’s life and may involve scrapping a key product or a market.

When to Consider Pivoting?

Pivots are hard and it is difficult for a business to recognize that it needs to drastically change its business model. Some signs that indicate that a business needs to change its strategy are:

1. One Product Feature is Doing Well- If a review of your existing business model reveals that one feature or aspect of your product is being received well while others are not, you should consider pivoting that feature into a full-fledged product.

2. Business is not Financially Viable- Merely having a good business idea is not enough. It should be financially viable too. An objective analysis of expectations. This could be due to many reasons including faulty products, high level of competition, overpricing, or changes in customer requirements. Change your business model to provide better value to customers.

4. Too Much CompetitionPivoting can also be considered if the market for your product is overcrowded and competition is tough. Differentiation is your business idea will reveal what aspects are worrisome and burdening the finances. The business also needs to find ways to identify the available resources in a better manner. This helps in identifying a reference point for pivoting.

3. Poor Market Response- Another good reason to consider pivoting is when the market response for your product or service offering does not match your the key to overcoming high competition. You will either need to modify your product or business model or adopt new marketing strategies to beat the competition. This is pivoting.

5. Shift in Your Goals- Another reason for pivoting could be a change in your goals or objectives. This could be because of changing regulatory environment or market dynamics.

How to Pivot?

Pivoting is also difficult to implement and may demotivate the employees while draining the energy and resources of the business. So, it needs to be thought out carefully and planned well. This will reduce the chances of your business hitting another roadblock. Here are some tips to successfully pivot your business:

1. Discuss with StakeholdersAn important step in your pivot journey is to involve all stakeholders and discuss the reasons for pivoting. Talking your investors, employees, and other associates into confidence will help you get better insights and ensure their cooperation in the whole process.

2. Be Decisive- Once you have decided to pivot, set a plan of action and implement it immediately. This will reduce the wastage of time and resources and help in improving business metrics.

3. Acquisition of New SkillsPivoting whether in the form of a changed product or strategy may require the acquisition of new skills. Identify the skills required and ensure that your existing workforce acquires them. You may even need to employ more people who specialize in these skill sets.

4. Accept the Change HappilyAlthough pivot takes you away from your initial idea or business model, it is important for growth. Accept the change gracefully and let go of previous failures. This approach will help in a smoother transition while allowing you to focus on the new goals and objectives.

Pivoting can be beneficial for startups since it allows them to find new growth opportunities while staying ahead of the competition. But the timing of pivot is important to get the desired results. Startups can take the advice of their accelerators or other experts to identify their pivot strategy and implementing it successfully.