If you are familiar with Entrepreneurship world, then you must have heard “PIVOT” word thrown around a lot. But what exactly is a Pivot and what is it’s role in the business world? And why is it so essential for all kinds of businesses to pivot or die, from early stage startups to even decades old established businesses. A pivot generally means to turn or rotate, like a hinge. It is basically a pin or the central point on which something balances or turns.
In entrepreneurship terms, pivoting is breaking away from the path of your core focus and having to change the strategic direction of your business model. You basically do a market research, create an MVP, find it’s product market fit and then launch. But in-spite of following all the rule books of establishing a successful startup, something can still get messed up, and things may not work out in your favour. It can be anything, from pricing, to regulation changes, to competitive challenges, to political interference, etc. The list can be endless, and it won’t matter what the reason is which can hinder the growth of your startup, there is only one solution left now- Pivot or Die.
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Pivot or Die
Pivoting in business is the smartest way to survive and thrive, helping you have an edge over the market and your competitors. There can be many valid reasons for you to pivot your business model, and we will talk about them in detail below. But the biggest and most important question to ask yourself is, when is the right time to pivot? A smart entrepreneur will know, when a change is required.
It is also crucial to remember that pivots are hard and also kind of risky. Nobody usually likes changes, be it yourself, your colleagues, your customers, and the market itself. So, pivot only when you are fully convinced that it is essential for your startup’s survival. When you do decide to pivot, you do need to rip off the bandage and do it as quickly and clearly as possible, while also keeping in mind to incorporate new skills and mission for your startup.
When to Pivot?
You can pivot your strategy when you feel that you do not have the MOAT or a competitive advantage. There will come a time when you will have only one option, i.e, pivot or die. We will list down a few important reasons to pivot.
1. Unsatisfied Customer
We all agree that customer is king, and without a happy customer, our company is eventually doomed. Every unsatisfied customer does not have to be loud. In fact, many customers who face problems with your products or service actually stop coming back, and find better alternatives silently. It is our job as founders, to have a pulse of the customer mood, even if they don’t explicitly express their dissatisfaction.
If your repeat customers number is slowing down, there is some big problem you’re not addressing, and it needs to be changed fast. Along with it, there are some unsatisfied customers who give a negative feedback via various means. Listen to them, they are trying to help you out in making your product better. Take their reviews seriously, and work on reasonable changes which can eventually turn them into a satisfied customer.
2. Competitor Advantage
Your competitor is not sitting idle and letting you come up and capture their market share. They themselves are working on pivoting and making their products better each day. Apart from these existing competitors, there will be new ones sprouting up left and right, eating up yours and everyone else’s part of the pie. What niche are they offering, which you hadn’t explored yet? What are they doing different to attract the customers, away from you?
It is time to put on the thinking hat and ponder how to acquire these customers, while churning profits for your business too. Check where you can make the production costs cheaper, or adding a new niche which isn’t tapped yet, or pivot to a new market direction which is currently in demand, and will be for a long time.
3. Growth Decline
You have been in the market for a while now, you had seen the rise of sales, customer acquisition, and all of those adrenaline rush phase. The honeymoon period eventually comes to an end, and your marketing budget starts drying down. New customers are a dream now. You need to sit and ponder why? Why have your sales plateaued or even worse declining?
It is a serious time to go back to the board room and think what exactly is missing, and how can you pivot to get back on track. Maybe the customer is not interested in what you offer anymore, or maybe the market need has shifted, or maybe they are getting a better deal elsewhere. Whatever it maybe, we need to pivot or die at this stage.
4. New Opportunity
Maybe you’re doing everything well until now, and your growth has been okay. But something exciting comes up, a new opportunity in the market which has a huge potential. It can be a new technology, or a government has opened up new doors of economic liberalization or encouraging a new market for growth, or a complete new market demand has emerged due to changing trends. It is an opportunity to grab, only if you know what you’re doing and can take advantage of the new situation.
It is true when they say, don’t fix what is not broken. But, it is also foolish to let go off a golden opportunity, just because we are rigid and lazy to adapt to new changes. We do not have to jump into every new hype train out there, and have to carefully analyze and see if it is the right time and right opportunity to pivot into.
5. Dependability on Others
You know your product is good. But if the whole concept of your company depends on someone else’s tools or platform or product for you to grow and sustain, it is better to start thinking about pivoting into a more independent sector. You cannot expect to grow rapidly, when you’re being held back by being dependable on others to make their technology better, so that you can grow after it. You can never completely avoid not depending on other factors, but it is never a good idea to be fully dependent on others for your growth.
6. Losing Faith in Your Own Vision
If we ourselves are not completely satisfied with our company vision, how can we expect the customer to be loyal long term? You might have created a product/service due to high market demand, and it might have helped you grow. But if you don’t have all your heart in it, and feel that this sector is not where you belong long term, then you should pivot to something which you love to do. It does not matter even if the existing product is very good, but if you have lost faith in it, or are not having any interest to keep working on it, then it’s better to pivot.
You need passion to grow and sustain long term, and it is okay to pivot from an existing product even if it is profitable now. Because, you might continue working on the same thing just for the sake of it, but eventually it will burn you out, and then your team and customers can also start feeling it. On a long term basis, it is just a disaster waiting to happen. It is time to pivot or die, and better to move on to an areas which interests you and helps you bring in your passion.
Few Successful Startup Pivots
- Paypal pivoted from starting out as a developer of security software for handheld devices into an online payment platform.
- Slack pivoted from taking a messaging platform available in the video game Glitch, and made the service into an independent communication tool.
- Netflix pivoted from a DVD rental service via mail into the current OTT video streaming platform.
- YouTube was started as a video dating site named Tune In Hook Up, and they pivoted into a general video sharing and uploading platform.
- Pinterest started as a mobile shopping app named Tote, and pivoted into an image search engine.
- Instagram started out as Burbn, basically a check-in app with a photo sharing feature. They pivoted into just photo sharing because it was the most used and loved feature.
- Twitter started out as Odeo, a podcast search and subscribe platform. It later on pivoted into a micro-blogging site where users could update and share their real-time location and activities with others.
- Shopify started out as Snowdevil, a snowboarding equipment’s e-commerce platform. When the platform didn’t succeed, they pivoted into the e-commerce point-of-sale software, utilizing the code they wrote for their original platform.
With great pivot success stories, there are countless startups which failed due to not pivoting on time, or in-spite of pivoting to something else. It is all about perfect timing, perfect opportunities and perfect execution, along with the grind which will eventually lead to a startup’s success. But one thing is always sure, if you don’t change with times and adapt, then the market will not be kind towards you just because you had a good product or service in the past. In short, there is only one thing to do when things are not looking very bright in the future – Pivot or Die.
Pivoting is a necessity to survive and thrive for any startup or an established organization. It might sound dramatic, but it is important to understand that it is Pivot or Die for a long term sustainability. Hope these above points help clear your doubts as a Desi Founder. Check out more insights about Startups here.