Every startup needs its unique idea and the right way to bring it to market. However, are initial business decisions always the best option for the development of your venture? As it turns out, a risky change can sometimes make your business achieve its peak performance. What is pivoting in business? Read our article and learn more.
Types of startup pivots – table of contents:
- The truth about a startup pivot
- When to pivot a startup business?
- Types of startup pivots
- Is it a pivot?
The truth about a startup pivot
One of the basic features that sets all startups apart is high uncertainty. This forces startups to be particularly vigilant and highly flexible in their business operations, which will allow them to successfully meet the rapidly changing consumer preferences.
However, even despite such great versatility and a departure from the traditional mechanisms of running a company, every startup needs a clearly defined strategy and business model. But what if an initially attractive action plan turns out to be unsuccessful?
With help comes pivoting, that is fundamentally changing the direction of a business, creating real opportunities to successfully overcome emerging challenges. Pivoting, then, allows you to make the necessary strategic changes while staying true to the startup’s original goals and vision.
When to pivot a startup business?
A startup’s success largely depends on the business model itself. Apart from real profits for startup founders, it should also bring tangible benefits to customers. By allowing you to focus on properly selected market segments and the most effective sales channels, a well-functioning business model gives you a chance to reach people who are looking for the ‘perfect’ products.
However, finding a suitable business model is not always so easy right away. Sometimes, budding entrepreneurs need to try various practices first to finally see which solution is the best option for growing their business. It is difficult to clearly identify a universal moment to start pivoting as each company has its own unique history and individual goals.
When looking for the right moment to change your strategy, it’s crucial to thoroughly analyze your customers’ needs, business environment and the very structure of your business activity. However, even despite such great diversity of businesses, it is possible to identify circumstances that may signal the need for some changes.
The first aspect to look at is overall customer satisfaction with your product. If, after the product is launched, it turns out that consumers pay attention to completely different features of the product than it was first intended, and they don’t recognize its basic functionality, it’s time to rethink your business strategy.
At this point, it’s good to remember that the product is created first and foremost for customers. Therefore, it’s necessary to listen carefully to their opinions, treating them as valuable tips to improve the offer.
Pivoting proves useful whenever initial plans, when confronted with business realities, turn out to be ineffective to give a startup satisfactory profits and a strong position among its competitors. Therefore, running a startup requires entrepreneurs to constantly stay on their toes to be ready to pivot their business when necessary, which can be the most effective solution.
Types of startup pivots
A bad product-market fit, difficulties in achieving previously set goals or a sobering confrontation with harsh reality are factors that motivate entrepreneurs to start pivoting. Depending on the source and specifics of the problem that they are facing, it’s possible to single out the following types of pivoting:
- Channel pivot – it’s connected to the changes related to sales channels. For example, moving sales to the Internet or adding new sales channels to your ecommerce growth strategy.
- Zoom-in pivot – it’s about focusing on one aspect of the product, putting the improvement of its other features somewhat in the background. In such a situation, what previously was considered a single feature of the product becomes the whole product.
- Zoom-out pivot – it’s the opposite of the zoom-in-pivot, the startup focuses on expanding the functionality of the released product until it reaches a sufficiently attractive form for the target group.
- Customer segment pivot – refers to the situation when your offer reaches a different consumer group than you initially expected. Entrepreneurs should then make every effort to efficiently update data on the new target group, adjusting the entire strategy accordingly.
- Technology pivot – it occurs when you change the technology your product is built on.
- Customer need pivot – this pivot is necessary when your product doesn’t solve the right customer’s problem and you need to concentrate on a different one that is worth solving.
Is it a pivot?
It’s worth noting that not every change in business should be equated with a pivot straight away. Minor changes connected with day-to-day activities, such as running new campaigns, expanding the team, changing office locations, updating prices of products and services or building your portfolio are natural improvements that will make your startup function well and grow.
On the other hand, a pivot can’t be understood as a general change, completely removing an existing venture from the business world. When the introduced changes are so radical that they lead to a full rebrand and involve the birth of an entirely new company, this is referred to as restarting a business.
Setting up a startup involves great vigilance and flexibility, which make it easier to stay strong in a highly dynamic market. Budding entrepreneurs should be aware that even the best-designed plan, when confronted with the unpredictable business realities, may need some improvements, and that’s where pivoting will help.
Read also: 10 questions to ask before you start selling a product.
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The most important questions
What is pivoting in business?
Pivoting is fundamentally changing the direction of a business, creating real opportunities to successfully overcome emerging challenges.
When to pivot a startup business?
Pivoting proves useful whenever initial plans, when confronted with business realities, turn out to be ineffective to give a startup satisfactory profits and a strong position among its competitors.
What is not a pivot?
A pivot should not be equated with small improvements that allow your startup to operate and grow naturally. A pivot can’t be understood as a general change, completely removing an existing venture from the business world. When the introduced changes are so radical that they lead to a full rebrand and involve the birth of an entirely new company, this is referred to as restarting a business.