Every startup’s journey is unique. Unique in the challenges, direction, opportunities and threats it faces. Sometimes the course you take doesn’t always hit the jackpot. Course corrections and adjustments need to be made until you find the right mix that works. That’s when the ‘Pivot’ comes in. But how do you recognize the need to course correct, execute it successfully, and ensure it’s the right move?
Recognizing the Need to Pivot:
Market Feedback:
- Customer behavior is the best indicator. If they’re not engaging or showing interest, something is wrong.
- Feedback loops: Regularly solicit feedback and, more importantly, act on it to improve your product and their experience.
Financial Indicators:
- Are finances an issue despite having a good customer base?
- Key Performance Indicators (KPIs) sliding south can be an alert.
Different Types of Pivots:
A pivot can be a change of direction of your product or business. There are many different ways can happen based on specific insights and circumstances; here are a few common pivot strategies;
Zoom-in Pivot:
- You notice your users using a specific feature of your product more than the rest of the product. Narrow focus on that specific feature of your product and make it the whole product.
Eg: Instagram started as Burbn, which allowed users to check in at their favorite spots. It also allowed them to share photos. Kevin Systrom started it as a part-time gig to teach himself how to code. When he noticed the popularity of the photo-sharing feature, he streamlined it and renamed it Instagram.
Zoom-out Pivot:
- Realizing your product is just a feature of a larger product and expanding it. This usually happens when your feedback loops with users point to a specific user flow/ journey that makes their experience easier or more wholesome.
Eg: Linkedin started as a platform for professionals to showcase their professional achievements/ online resume. They then started adding features likes groups, lists, advertising and more to become the behemoth it is today.
Customer Segment Pivot:
- Retaining the product but changing the target audience. You realize the product is good but there is a better product-user synergy with a different audience.
Eg: Foursquare was a popular app in the 2010s that allowed users to check-in to places and win discounts and badges. It fell out of favor with users once Facebook introduced the feature on its product. Foursquare then pivoted to enterprise users, allowing them to leverage their data and use it to power their business intelligence or their apps as well.
Platform Pivot:
- Transitioning from an application to a platform or vice versa.
Eg: When Uber started, the idea was to monetize the huge oversupply of limos waiting in parking lots for their next drive. They used this oversupply and started providing users with luxury limo rides on demand for a little more than standard taxis. Looking at the opportunity and competition in the space, they pivoted to a platform model where they started onboarding all kinds of cars/ drivers and matched them to consumers in need. They then extended the platform to include food delivery and couriers.
Navigating the Pivot:
People Alignment:
- Ensure that everyone, from top leadership to interns, understands and supports the new direction. Collect feedback and understand multiple perspectives that you can include in your pivot.
Customer Communication:
- Be transparent with your existing customers about changes. They deserve to know, and their feedback can be invaluable.
Business Re-evaluation:
- Reassess your market, competitors, and value proposition post-pivot.
When executed correctly, a pivot can catapult your startup to unforeseen heights. Think of Twitter, which began as a podcast platform, or Slack, which started as a gaming company. The decision to pivot is both daunting and transformative. It requires a mix of intuition, market understanding, and sheer grit. While pivoting sometimes might seem like a setback or failure, it is absolutely essential for a business to adapt to feedback, and in more cases than one, is the first step to success.
Are you aware of any successful pivots or has your startup pivoted to a different offering? Please share your stories in the comments, would love to hear them.
This is post #7 in the series Idea to Scale, to view other posts click here.