How to Pivot your Startup.
Oct 09, 2023
Let's Understand: What Is Startup Pivoting?
In simpler terms, startup pivoting is essentially a shift in the business strategy to steer your venture toward profitability or a more desirable situation.
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.
A pivot could entail anything from changing how a product is manufactured to shifting marketing efforts to appeal to new buyer personas.
The term "PIVOT" is relatively fluid but is always related to a change in a startup's business strategy, generally dictated by factors beyond its control.
When to Pivot a Startup
Knowing when to pivot your business model can be tricky.
First and foremost, pivoting should not be considered a failure; it's essentially a part of the startup process.
Many startups have unconventional beginnings and later find themselves in a field they had not initially intended to enter.
When startups decide to pivot, their primary focus areas usually include:
Technical Development: Founders should review the strengths and weaknesses of their operation and implement improvements. However, complete revamping may be easier, quicker, and more reliable than working on fragmented areas for improvement.
Improvement in the Revenue Model: Even if your startup is well-supported by technical aspects, you might need to work on your revenue model for sustenance. There are various revenue models available; you need to choose the one that suits your startup best.
Marketing: There comes a point in the startup journey when a startup experiences a dip in popularity. At this stage, marketing strategies and partnerships with opinion leaders become more crucial. Marketing strategies provide a roadmap for the future of a startup.
Based on my own experiences and my experience of working with startup founders, I am in a position to list a few reasons why startups should pivot.
Reason 1: When a Single Feature of Your Product Stands Out
Sometimes, a single feature of your product, service, or business model performs remarkably well compared to others. If so, exploring the possibility of pivoting to support that single feature exclusively is worthwhile. As a startup founder, if you can identify a single feature of your product or service that your customers enjoy more than others, then you should consider pivoting and building around it.
Reason 2: When the Business Is No Longer Financially Viable
Startup founders often have sentimental attachments to their businesses, which makes it inherently personal. Despite what it might mean personally, a business can only go as far as its capital allows it to. If your business is running out of money, you'll need to pivot it into something more financially viable. Take an honest, objective look at your business, without letting emotion cloud your judgment, and identify where and how you could improve.
Reason 3: When the Market Doesn't Respond as Expected
If your product or service doesn't resonate with consumers as you thought it would, it's a strong reason for a pivot. You need to change your business model to offer better value to your target customers. By pivoting, you can make your customers see your business in a different light.
Reason 4: When You're Consistently Outperformed by the Competition
The startup realm is highly competitive, and you'll always be pitted against some kind of competition. If other companies are dominating your space, it's probably time for a pivot. You may need to radically alter how your company operates, change your product or service, or completely revamp your sales strategy.
Reason 5: When You Want to Be Different
Let's say your startup has been operating for a while, and you're becoming unhappy with its growth. Your perspective and goals might have shifted, or you may have developed new values as your business has grown. Alternatively, you might be attracted to a lucrative niche. In any of these cases, some form of pivot is a viable option. However, be cautious when pivoting. If your business is doing well, making a radical shift could be risky. Nonetheless, as a startup founder, it's up to you to decide how your business operates. Do what you feel is right, considering your vision, morals, finances, or all of them.
It may seem that undergoing a business pivot is an easy task, but executing one requires a lot of work. Let me suggest a few tips to follow to ensure your startup pivot process is successful.
Tip 1: Focus on What Works
Evaluate your business model and products, and retain those that perform best.
Tip 2: Inform and Involve Stakeholders
Talk to your startup's investors; if you're changing business directions, they'll need to know. Communicate the need for a business pivot to employees and get them on board.
Tip 3: Act Quickly, and There's No Going Back
Once you've decided on a new business model or direction, get started immediately. All your resources should be directed to your new projects or a new brand strategy.
Tip 4: Up-Skill If You Need To
Undertaking a startup pivot may require learning a new skill set and possibly bringing in a new workforce.
Tip 5: Get Comfortable with Change and Embrace It
Pivoting your business model in such a dramatic way can be very stressful. Embrace the newness and focus on recalibrating your business to make it the best it can be.
Pivoting your startup isn't a decision to take lightly. No matter what you choose to do, it's going to take considerable effort on your part.
It's a tough call to make. To Pivot or Not to Pivot. Pivoting is a humbling process. It requires a real understanding of where your business is heading and deciding on a potentially drastic course of action. Still, if your startup is radically underperforming, some kind of pivot may be necessary to stay in business.