Why Startups Should Not Be Afraid To Pivot?

Pivoting is often looked down upon in the Indian startup ecosystem as a sign of failure, which makes founders fear the step; when in reality, pivoting reflects courage. It takes a lot of courage to realize the fault lines and deficiencies in your existing models and make necessary shifts to avoid big failures in the future. Through this blog, we want entrepreneurs to understand that pivoting is an essential stage of learning and growing through mistakes and not something to resist when required.


Let’s first understand what “pivoting” means for startups


What do you do when your hypothesis does not match with reality? You pivot! You pivot your business model or product or strategies in accordance with the situation. As Eric Ries, the man who coined the term in 2009, said, “Pivot, don’t jump to a new vision”. Pivoting could be explained as a process of experimenting different ways to fulfill the aimed vision for your startup with the right value proposition. Pivoting simply means proactively making adjustments to your business model components and/or product ideation, small or big, with constant testing and experimentation until you meet the ‘right fit’.


Startup pivots can be of several types:


Some of these are-

  • Product repositioning pivot can be done in different ways:

  1. Zoom-in pivot, where your new product is a condensed specific feature of the old product that customers might have liked more.

  2. Zoom-out pivot, where you amplify your old product with more added features, such that your old product is now just a feature of the new larger product.

  • Customer segment pivot, where you target a new customer base with the same product,

  • Technology pivot, where you shift to a better technology to offer the same solutions, keeping in mind that technology is always changing,

  • Channel pivot, where you change the medium to deliver products to your customer group,

  • Customer need pivot, where you target a new customers’ need to solve. This might entail an entirely new product in some cases,

and many more like platform pivot, value capture, business architecture pivot, etcetera.


Pivot is different from growth hacking as well as iteration


As conveyed by David Cummings, while iteration is a minor change in the product or a component of the business model to capitalize on a closely-related market opportunity, pivot is a wholesale change of the current business model in an attempt to capitalize on a different market opportunity, which takes comparatively longer to execute. Moreover, it is different from growth hacking, which focuses on aggressive growth solely challenging assumptions related to your marketplace but with pivoting, you’re questioning what the actual needs of the customers are and the ways in which you think you should be serving customers, so that you can best meet their needs.


Your pivoting efforts should lead to an MVP. An MVP, or a minimum viable product, is part of a strategy to see if your product has the potential to enter a market gap. Testing the impact of your product beforehand helps reduce cost and save time. With each quality output and feedback, you can optimize your product ultimately increasing its value to ultimate users.


Also read: Masterful MVP Practices in a Lean Startup


When and why to pivot?


Most people take too long to pivot. Pivots are important to find the right direction when your startup is failing and should be done as soon as possible. You just get the signals. It's when you realise that you have been targeting the wrong customer segment this whole time or using the wrong distribution channel.

Trust me, not all of your hypotheses are going to be right and one needs to be learning from the regular iterations.

Imagine you launching a product and even after months of tussle, it feels hopeless to get customers or your idea is impossible to get started with at the current moment (maybe due to too much capital/years of building), then you might want to consider pivoting. Another example could be when only one aspect of your business is getting the most traction and the rest are failing, you might need to change your direction focusing on the former aspect solely.



Another way to identify is try asking the following questions to yourself:


✔ Did you find the product-market fit?

✔ Did you understand the archetype of the target customers?

✔ Did your MVP match with those archetypes?


If the answer to even one of it is a 'no', you might need to adopt one of the pivoting types.


In the journey from customer discovery to customer validation, your startup might have to pivot several times.

Instead of trying to validate a product to a customer segment that does not need the product, you need to change the target customer wholly.


It is a common myth that pivot symbolizes changing your company mission and vision entirely. Not all the startup pivots are the massive, 'all-in moments’ type. In fact, these can be as small as changing your customer acquisition strategy or marketing strategy.


There are plenty examples of such companies that have successfully pivoted

  • YouTube pivoted from a video dating website to the biggest video content platform today

  • PayPal, previously ‘Confinity’, a company for beam payment palm pilot, pivoted around 5 times to become the famous online payment system we know today

  • The famous photo-sharing app, Instagram, pivoted from a location-based HTML5 app, Burb

  • Twitter, previously Odeo, began as a podcasting network

  • Nokia started as a Finnish paper mill initially

  • Flickr, the photo sharing and hosting service started as an online role-playing MMOG gaming platform.


So get out there and make those changes!


Read some famous startup pivot stories here.


Having a vision perimeter is essential..

Pivoting should not be done blindly aiming at rapid growth. Having a ‘0 to 1’ plan is important. First, you need to get a good, grandeur vision, then try out different thought processes and execute different experiments with it. But all this while, there should be a vision boundary; keeping your vision solid and firm, you should explore what all things your startup can do.


Instead of thinking that your idea has failed, you could have maybe just failed one of the designed experiments to test your idea. And that is okay. You learn from this experiment and start with a new experiment. But this process should continue only to a certain extent.


Have you heard of the term ‘opportunity cost’? It is the lost potential gain when one opportunity is chosen over the other missed opportunity. When you are spending your resources and energy on an idea that is simply not working out even after months of trial and error, you are not only facing tremendous losses but also losing potential gains.


However, it is also important to remember that pivoting over and over again could kill your startup. So, don't give up on ideas too soon.


Read more on reasons why startups in India fail


All said, I agree that pivoting is a hard step to take but entrepreneurship is all about hustling for the better things, isn’t it? Hope this blog helps you to get a good perspective on pivoting and its ways. At Flyboat, we believe that the business learning gap among potential entrepreneurs can be addressed with the right resources and we want to do our part to empower the startup ecosystem in India.




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