Pivoting – When Is The Right Time To Pivot?
All entrepreneurs and businesses hit hard times and tough choices. Some survive because they stick to their original idea, while others survive because they pivot. There are different types of pivots and each type of pivot requires making a significant change to the existing business model. But, to make a pivot successful one must have significant knowledge about the product, the customer, or problems that are plaguing the business. After the initial analysis, the company has to conclude whether to make a substantive change to the business to survive the competitors or to stay their ground. Whether big or small, strategic pivoting need to be carefully planned and well-timed to be successful.
What is pivoting?
Pivoting in the startup world means to shift to a new business strategy, and it is often believed to entail drastically changing the whole company and the business model. Oftentimes, a company only has one major problem that needs to be addressed and it requires only one aspect of the company to change. Pivot can be different things such as :
- Turning one feature of a product into the product itself.
- Turning one product into a feature of a larger suite of features as part of another product.
- Focusing on a different set of the target audience by positioning the company into a new market.
- Changing the platform, from an app to software or vice versa.
- Employing a new revenue model to increase profit.
- Using different techniques/technology to build a product.
There are three types of pivots:
- Product Pivot– Here your customers are attached to one feature of the product but not the overall product.
- Customer Pivot– Here you discover that there is a new market segment that is willing to pay more than your existing customer.
- Problem Pivot– Here you talk to your customers and do research and you discover that there are bigger problems with the product or service you are selling.
When should one consider pivoting?
- When as a company you are lagging behind your competitors and always playing catch up. The benchmark you’re trying to meet is being met by lots of other companies, and you’re being overlooked.
- When your company offers a dozen services, and only three of them make you any money. Over time, markets change. If your money-maker is not profitable anymore, it’s time to cut the losses and get back to building your empire.
- When your company has hit a plateau. If you notice slow or no progress in your company’s development, then a pivot should be considered. It doesn’t need to be a major pivot but an objective overhaul of whatever is holding you back.
- When you’re no longer serving your target market. If your target audience is desiring a different way to be served, you must adapt or narrow your niche to a new market that desires your product as is.
- When people, processes, or profits are declining steadily then it might be wise to discuss the possibility of a pivot.
- When you’re no longer seeing positive results from the things that made you successful. This is the biggest indicator that your company needs to evolve to overcome the rot.
How to pivot successfully?
Set new goals and objectives to align with the new vision
Pivot, however small or big, must come after careful consideration. Once the decision is made, you must set new goals for your team and yourself, ones that help you overcome the problems that you faced previously. The new objectives must reflect the new direction that the company is taking.
Don’t scrap everything, but build on what you have created
Pivot does not have to change everything about a company. Strategic changes can help you build a more sustainable brand. Evaluate the best practices or changes to implement that would bring back your business to its former glory; it can help you build on the brand that you have already established without having to start from scratch.
Do the research and create hypotheses
To ensure that the pivot gives you the push that the company needs and not turn out to be a failure, conduct thorough research and create hypotheses. Consider different scenarios and outcomes, to ensure that the one you pick gives you the best odds of success.
Listen to the customers
Customer feedback is valuable and it provides you with an opportunity to grow and become better. When considering pivoting, you must consider what your customers have to say. Listen to customer’s suggestions and pain points to create a better product.
Examples of successful pivots
- Kissmetrics pivoted from an analytical tool for everyone to an analytical tool for marketers.
- YouTube pivoted from a basic video sharing tool to a collaborative video platform.
- Yelp pivoted from its original automated system to a successful local business review site.
To pivot is a risky but necessary business move. To reach the result, companies must adapt on-the-go and validate everything that they do. Planning and execution are vital to ensure that the company pivot is successful. At Alkye, we help companies with business strategy services to help them chart the most effective and efficient route to success in a competitive marketplace.