How to Pivot: Lessons in Reinvention from Successful Startups

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The concept of the "pivot" has become central to the wildly popular entrepreneurship bible The Lean Startup. As you'll learn below, deciding whether to stay on track or try something new is very much a function of questioning your assumptions and refining your visions of your business.

What's a Pivot?

The concept is simple: stay the course or change things up? It's an important "moment of truth" that all entrepreneurs must face.

But if your initial assumptions and hypotheses turn out not to be working out, a pivot can represent a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."

"Lean Startup" guru Eric Reis explains on his blog: "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."

What are some famous "pivots"?

  • The ultra-successful online retailer Fab.com began life as gay community site fabulis.com. Founder Jason Goldberg struggled to find a niche for his fledgling site when Facebook and other dating sites were already so successful. Fab.com was born from the ashes, focusing on a completely different niche: high-end design.
  • Groupon started life as an online fundraising platform for nonprofits. Founder Andrew Mason wanted to create a successful alternative to Kickstarter and Indiegogo but faced pressure from investors about how the business would make money. By settling on collective buying, Groupon was born.
  • Even Twitter was once something else -- namely a podcasting platform called Odeo. When Apple launched a competitive podcasting solution in 2005, the founders pivoted to a microblogging service.

    When you should pivot:

    When you realize a business isn't working as well as you'd hoped, you might consider a pivot. When you know the market's not there, or not responding to what you have on offer. When there are too many internal disagreements about what course to take. When something just not clicking. These are all time to consider pivoting and trying something new.

    Pivoting is all about timing. It takes guts -- sometimes its harder to fold than to keep going, even when you know you're fighting a losing battle.

    Pivoting is rarely the same as "quitting" -- it means a correction in course, changing things up to find a more profitable enterprises

    Successful pivots often see successful companies rising from the ashes of abandoned ventures. These ventures often bear little or no resemblance to what's come before. But there's a kernel in there, something essential has been carried over.

    Jesse Phillips of NueYear says: "No one knows the future. It's impossible to create the perfect product that meets customer needs perfectly without testing.

    Therefore, once you launch and realize some other aspect is more desired by the customer, you need to be willing to shift. It's arrogant and foolish to try to force your will on the market, you have to shift with your growing knowledge of your market."

    Tips for being ready to "pivot":

    Kanban has attained tremendous popularity in recent years among software developers and entrepreneurs, partially because it recognizes that market forces change rapidly and startups need to be ready to pivot and adapt at a moments notice.

    Dabble co-founders Erin Hopmann and Jessica Lybeck decided to start a site called 30 Days of Honesty to chronicle their own struggles and to ultimately force a central question that a number of entrepreneurs struggle with: "Should I keep at it or give up?" Here's what you can learn from their experiment.

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