You may need a pivot
Acknowledgement is a big first step
Image : Jametlene Reskp
One of the startups where I knew the founders well, had been struggling for months to gain traction with its original product. Despite numerous iterations and marketing efforts, sales remained stagnant and the team was running out of ideas. In a team meeting, it was suggested that they consider pivoting to a new market or offering a different product entirely. For them, the game changed completely. For the benefit of others here is something everyone should know.
What is a pivot :
A pivot in a startup refers to a significant change in the direction or strategy of the company.
The word "pivot" comes from the French word "pivoter," which means "to turn." In the context of startups, the term "pivot" was popularized by Steve Blank and Eric Ries, two thought leaders in the field of entrepreneurship. In his book, "The Lean Startup," Ries defines a pivot as "a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth." Essentially, a pivot allows a startup to make a significant change in direction in order to test a new hypothesis and see if it leads to better results.
When do you need a pivot?
Lack of traction: If a startup is not gaining traction with its target market or customers, it may need to reconsider its approach.
Changing market conditions: If the market or industry in which the startup operates changes significantly, the startup may need to pivot in order to remain relevant and competitive.
Insufficient funding: If a startup is not able to secure sufficient funding to continue operating or to scale its business, it may need to pivot in order to find a more viable business model.
Poor customer feedback: If a startup is not meeting the needs or expectations of its customers, it may need to pivot in order to better serve its target market.
How to go about pivoting?
Assess the current state of the business: This involves reviewing key metrics such as revenue, customer acquisition, and retention, as well as assessing the company's financial health and resources.
Identify key challenges and areas for improvement: Look for patterns or trends in the data that suggest the current business model may not be sustainable or is not meeting the needs of the target market.
Research the market and industry: Conduct market research to understand the current landscape and identify potential opportunities for growth or areas of disruption.
Solicit feedback from customers: Engage with customers through surveys, focus groups, or one-on-one interviews to gather insights on their needs, preferences, and pain points.
Analyze the competition: Research the competitive landscape to understand how other companies in the industry are positioning themselves and serving the market.
Evaluate potential pivots: Based on the above research, identify potential pivots that could address the challenges facing the business and take advantage of new opportunities.
Develop a pivot plan: Create a detailed plan outlining the steps required to pivot, including any changes to the business model, target market, or value proposition.
Communicate the pivot to stakeholders: Clearly communicate the reasons for the pivot and the benefits it is expected to bring to the business to key stakeholders such as employees, investors, and customers.
Implement and execute the pivot: Put the pivot plan into action, making any necessary changes and adjusting as needed based on feedback and results.
Monitor progress and adjust as needed: Regularly review key metrics and gather feedback to ensure the pivot is on track and adjust as needed.
How to be sure pivoted well !!
Improved business performance: The pivot should result in improved key metrics such as revenue, customer acquisition, retention, or profitability.
Greater market fit: The pivot should better align the startup's product or service with the needs and preferences of its target market.
Increased customer satisfaction: The pivot should result in higher levels of customer satisfaction as the startup is better able to meet the needs and expectations of its customers.
Stronger competitive position: The pivot should enable the startup to differentiate itself from competitors and gain a competitive advantage.
Greater alignment with company vision and goals: The pivot should bring the startup closer to achieving its long-term vision and goals.
Some pivoting Examples
Slack: Slack was originally developed as a gaming platform, but after failing to gain traction in that market, the company pivoted to focus on building a messaging app for teams. This pivot helped Slack become one of the most popular team communication tools on the market, with millions of daily active users and a valuation in the billions of dollars.
LinkedIn: LinkedIn was originally launched as a job search and recruitment platform, but it has since pivoted to become a broader professional networking and job search platform. This pivot helped LinkedIn expand its user base and revenue streams, and it is now a publicly traded company with a market value of over $30 billion.
Nest: Nest was originally founded as a smart thermostat company, but after being acquired by Google, it pivoted to become a broader home automation company. This pivot helped Nest expand its product line and user base, and it is now a leading player in the smart home market.
Zappos: Zappos was originally founded as a footwear retailer, but it has since pivoted to become a broader online retailer of clothing, accessories, and home goods. This pivot helped Zappos expand its customer base and revenue, and it was eventually acquired by Amazon for over $1 billion.
Groupon: Groupon was originally founded as a social media platform for collective action, but it eventually pivoted to become a daily deal and coupon company. This pivot helped Groupon become a leader in the e-commerce space, and it is now a publicly traded company with a market value of over $2 billion.
Would like to talk about pivoting do reach out to me!
© Sameer Babbar
sbabbar@sameerbabbar.com
Disclaimer: This is for information only. It does not take into account your own objectives, financial situation or needs. Author, his company his associates, his directors, his staff, his consultants, and his advisors do not accept liability for any loss or damage, including without limitation, any loss, which may arise directly or indirectly from the use of or reliance on the information provided.