What is a pivot anyway? We know in basketball it means having one foot stable and anchored while moving the other foot to reposition for a new move. In business, a pivot usually occurs when a company determines that their product or strategies are not meeting the needs, and so they make a fundamental change.
While pivoting in the startup world means to shift to a new strategy, it doesn’t always mean drastic changes of the entire operation. A company may only have one important problem that needs addressed. For instance, a company could change one feature of a product and make something more streamlined or simple. Or, the company may focus on a new set of customers, positioning the company for a new market. Changing a platform from an app to software or vice versa would be a pivot. There are numerous other directions that would be a pivot.
Pivoting should not be a rash decision, however. It should only be considered when absolutely necessary and when all other options have been tried.
Here are some signs the Founder Institute identifies to help you know when you should pivot:
1. Your company is always playing catchup no matter how much work you put into it.
2. There’s too much competition for what you offer. Your idea was unique and original at first, but now there are too many and bigger companies beating you out.
3. You have hit a plateau. This may be the result of boredom or an unmotivated team, or simply an inefficient strategy, but whatever the cause, a pivot should be considered. Take an honest, objective look and identify something that can be revamped.
4. Only one thing is succeeding. No sense in continuing effort in areas that are not working.Capitalize on what’s working and change, maybe even radically, or completely ditch what isn’t working.
5. There’s limited response from your market. Just because someone told you they would pay you a certain amount six months ago doesn’t mean they will now. An initial lukewarm response usually doesn’t bode well. You can only do so much to convince the world that what you have is valuable.
6. Your perspective has changed. There’s always a chance that after you are doing something for a while you will discover that your goals, vision, and values have changed, and that what you are currently doing is just not the path for you.
Every company experiences difficulties on the road to success, but you have to know the difference between an obstacle and an impossibility. Can this problem be solved with more research, customer development, funding, etc.? If the answer is “no,” and you really can’t think of a solution, you should consider pivoting.
If you’re even thinking about pivoting, it’s because you sense something isn’t quite right. You may have many metrics in your favor, and even solid revenue, but an honest assessment of the situation is such that you know you’re not quite going in the right direction.
You do need to consider whether pivoting is the real answer to your problems or if quitting is the solution. You need to consider where you and your team stand.
Funding: Do you have enough money to make it at least another six months?
Staff: Is your staff still engaged; are they believers in your mission?
Investors: Are the biggest funders of your firm supportive of your direction?
If your answer is yes to all these questions, then a pivot is a possibility that can take you to the next level. If the answer is no to one or two of these questions, then you should seriously consider quitting. Seth Godin said, “Winners quit the right things at the right time.” But before you quit, consider the possibility of a pivot. Wrigley began as a soap manufacturer who gave away gum with its product, and the gum became more popular!
Once you’ve decided to pivot your company . . .
Do it as soon as you can. This avoids wasting time, energy, and money.
Pick new goals that align with your vision. Be brutally honest with yourself and put in the extra time to make sure your new vision is the right one for you.
Don’t throw out what you have already done. Identify what can be salvaged, kept, reused in a new direction. Redirect your current resources in a new way.
Listen to your customers. Their feedback is a great indicator. Criticism and complaints are to be expected occasionally. But if you get the same ones repeatedly, they are telling you vital information.
Make sure the pivot actually presents opportunities for growth. You need to know if this is worth the risk.
Consult with trusted mentors.
Be transparent. It is essential that you be open about your decision-making process with investors and employees.
Don’t look back.One of the biggest challenges in pivoting is the uneasy feeling that maybe you didn't make the right choice. When you decide to take a new path, it needs your full support and attention. Anything less means you'll never know which way works best, while spreading your business dangerously thin.Even more, you need to go all in as a group. There's a time for a debate, but once a decision has been made, everyone needs to get on board.
You can pivot into greater success. Every business will need to pivot at some point or another. If you stake the identity of your company on a product, process, or advantage, then your business has a built-in expiration date. Eventually, like all things, that thing you love is going to be outdated and forgotten.
Pivot properly, on the other hand, and your business will stand the test of time.