Few people know that YouTube was created as a dating site where users could
post videos to describe their ideal partner. The original concept was, however,
not received well and the company’s founders Steven Chen and Jawed Karim
decided to pivot. YouTube’s pivot to allow users to host all kinds of videos was
successful and made the platform a highly popular one. Similarly, Instagram, a
successful social media platform was initially launched as Burbn, a location-based
check-in service.
What is Pivoting?
Pivoting refers to a company or a business changing its original business model or
product or offerings to find success. A change in the marketing strategy to appeal
to new customer categories is also a part of the pivot. This relatively fluid concept
always involves a change in the business strategy of a startup.
This strategy of changing gears to a new business model is hard and risky.
Startups should embark on a pivot only if they are convinced that it will be worth
it. A pvot can happen at any stage of a company’s life and may involve scrapping
a key product or a market.
When to Consider Pivoting?
Pivots are hard and it is difficult for a business to recognize that it needs to
drastically change its business model. Some signs that indicate that a business
needs to change its strategy are:
- One Product Feature is Doing Well- If a review of your existing business
model reveals that one feature or aspect of your product is being received
well while others are not, you should consider pivoting that feature into a
full-fledged product. - Business is not Financially Viable- Merely having a good business idea is
not enough. It should be financially viable too. An objective analysis of your
business idea will reveal what aspects are worrisome and burdening the
finances. The business also needs to find ways to identify the available
resources in a better manner. This helps in identifying a reference point for
pivoting. - Poor Market Response- Another good reason to consider pivoting is when
the market response for your product or service offering does not match
your expectations. This could be due to many reasons including faulty
products, high level of competition, overpricing, or changes in customer
requirements. Change your business model to provide better value to customers. - Too Much Competition– Pivoting can also be considered if the market for
your product is overcrowded and competition is tough. Differentiation is
the key to overcoming high competition. You will either need to modify
your product or business model or adopt new marketing strategies to beat
the competition. This is pivoting. - Shift in Your Goals– Another reason for pivoting could be a change in your
goals or objectives. This could be because of changing regulatory
environment or market dynamics.
How to Pivot?
Pivoting is also difficult to implement and may demotivate the employees while
draining the energy and resources of the business. So, it needs to be thought out
carefully and planned well. This will reduce the chances of your business hitting
another roadblock. Here are some tips to successfully pivot your business: - Discuss with Stakeholders- An important step in your pivot journey is to
involve all stakeholders and discuss the reasons for pivoting. Talking your
investors, employees, and other associates into confidence will help you
get better insights and ensure their cooperation in the whole process. - Be Decisive- Once you have decided to pivot, set a plan of action and
implement it immediately. This will reduce the wastage of time and
resources and help in improving business metrics. - Acquisition of New Skills- Pivoting whether in the form of a changed
product or strategy may require the acquisition of new skills. Identify the
skills required and ensure that your existing workforce acquires them. You
may even need to employ more people who specialize in these skill sets. - Accept the Change Happily– Although pivot takes you away from your
initial idea or business model, it is important for growth. Accept the change
gracefully and let go of previous failures. This approach will help in a
smoother transition while allowing you to focus on the new goals and
objectives.
Pivoting can be beneficial for startups since it allows them to find new growth
opportunities while staying ahead of the competition. But the timing of pivot is
important to get the desired results. Startups can take the advice of their
accelerators or other experts to identify their pivot strategy
