A pivot is defined as a quick turn by either a company or a project. Sometimes it’s like a shift in focus in a small startup. Other times we see it in companies as large as Google, when it announced it was shutting down Google Buzz, a service that it announced to great fanfare but had not quite caught up.
As you can imagine, a pivot is something that can be quite stressful for any entrepreneur, as it means changing the direction of the business, sometimes radically. It might require an extra amount of cash or runway that you don’t have. And of course, no one will guarantee that this shift will mean success for the project.
One of the companies I previously worked with, ExpoTV, had not one, but two major pivots. In a candid interview, Bill Hildebolt shared some thoughts about this process with Zack Mansfield:
Having been an entrepreneur for a few years now, I believe the truism that every technology start-up pivots. That said, I also believe successful entrepreneurs start with an idea that they are passionate about. So it’s somewhat paradoxical: to be a successful entrepreneur, you need to be passionate about an idea. But to have a successful company, you have to throw that idea out and do something different. I think this goes a long to explaining the failure rate at start-ups and also why you see so many founders leave relatively early in a company’s development.
Eric Reis, who has written The Lean Startup book talks about pivots in this blog post:
I want to introduce the concept of the pivot, the idea that successful startups change directions but stay grounded in what they’ve learned. They keep one foot in the past and place one foot in a new possible future. Over time, this pivoting may lead them far afield from their original vision, but if you look carefully, you’ll be able to detect common threads that link each iteration. By contrast, many unsuccessful startups simply jump outright from one vision to something completely different. These jumps are extremely risky, because they don’t leverage the validated learning about customers that came before.
It is important that your recognize the signs that your startup needs to pivot well in advance, so that you change direction and align the resources before it’s too late. Some of these signs can be:
- Internal: like the sales department that reports that it’s becoming too hard to sell the client, or technology constantly having to change features on projects that had a committed deadline.
- External: like customer service calls ramping up or competitors becoming all of a sudden successful in areas where you dominated, thanks to a better approach to the business requirement.
So when is the right time to pivot?
- I think it’s a gut feeling more than anything. As a founder, or as a CTO or VP of Engineering, you feel that something’s not right. Gather the group and talk openly about the issues.
- When the project fails to hit specific goals in its allotted time. For this to work you need to be clear on your metrics: for example sales revenue goals or millions of unique visitors.
- When your customers tell you to change. Don’t get too sold on your idea, be open to hear criticisms and embrace change. It might not mean that you’ll change your business plan every time a customer tells you to, but learn to see trends from your customer feedback.
The most important thing is not to trash everything you’ve done. A pivot, in essence is changing direction by leaning on what you’ve learned. In basketball, the pivot is done by rotating the body, but anchoring one foot in the ground. If a pivot means starting a completely new idea, don’t do it. But sometimes a small change of direction can mean the difference of continuing afloat or joining the startup graveyard.
In a recursive theme, this blog post is a pivot to this blog. I’ve decided, after three years of blogging about technology in general that I want to start writing about all the things I’ve learned as a tech lead in startups in the last 10 years. If you want to keep reading about social media and technology in general, there are many blogs out there that do a better job at it. But if you work in startup, either you’re a founder or you’re thinking about starting one, I will be a good resource as I go through my experience in participating in the crazy world of technology entrepreneurship.
