When is the Right time for Startup Founders to Pivot
The key to deciding when to pivot is a combination of both quantitative and qualitative data.
This includes learning about your users and what they need, learning about the market that you are in, and learning about your competitors.
Once you have a lot of quantitative data (numbers) it is time to do some qualitative research (in-depth interviews).
This will help you gain a better understanding of the needs of your users, as well as potential growth opportunities. It will also help you get a better understanding of how you stack up against your competitors.
It is important to remember that there are many different ways to approach a pivot, but if done correctly it can have a huge impact on the success of your startup.
What is a Pivot?
A pivot is a change in the fundamental strategy of a startup. It could be an entire business model change, or it could be as simple as changing the type of customers you are targeting.
The most important thing to remember is that the idea that you are pivoting from has to be killed. It can’t live on in some other form.
There are many different types of pivots, but there are two main categories that we see most often: product pivots and customer pivots. Let’s look at some examples of each one:
Product Pivot Examples:
1. The Switcheroo
One of the most common product pivots is to change the product you are selling. This is called a switcheroo. A switcheroo occurs when you completely change the core functionality of your product, but keep the brand and logo the same.
Let’s look at an example of a startup that did this: Stack Exchange. It was originally launched as a question and answer site called Stack Overflow, but it was doing poorly.
They realized that there was a lot of demand for programmers to ask questions and get answers, but they didn’t have a good way to find people who were willing to answer those questions.
So they launched Stack Overflow Jobs as a place for programmers to post their job openings, which worked much better than their Q&A site did. This is an example of a product pivot because they changed the core functionality of their original idea (Stack Overflow) into something new (Stack Overflow Jobs).
2. When it’s Time for something New
Another type of pivot is when you realize that your existing product isn’t going to work out and you need to come up with something new altogether.
One example is Reddit, which was originally a collection of links, but then they realized that the community wanted to be able to discuss those links as well.
So they created a new section of the site called “subreddits” where people could post their own links and discuss them.
This is an example of a product pivot because Reddit realized that their original idea wasn’t going to work out and they needed to come up with something new.
3. Finding New Markets
Sometimes you will find that your product is great, but you are just targeting the wrong market.
One example is Dropbox, which was originally launched as a way for people to share files with each other on their desktop computers. Then they realized that most people wanted to be able to access those files from anywhere, so they pivoted and started offering cloud storage instead.
This is an example of a product pivot because Dropbox realized that their original idea wasn’t going to work out and they needed to come up with something new.
Customer Pivot Examples:
1. Targeting Different Customer Segments
One type of pivot is when you change who your target customer is. For example, let’s say you are building an app for local businesses, but you realize that it would be much more valuable if you could get restaurants to use it. This is an example of a customer pivot because you are changing who your target customer is.
2. Moving from one type of customer to another
Another type of pivot is when you change from one type of customer to another.
For example, let’s say you are building an app for businesses, but realize that you could make more money if you targeted consumers instead. This is an example of a customer pivot because you are changing from one type of customer to another.
3. Changing the way that your customers pay for your product
One other type of pivot is when you change the way that your customers pay for your product.
For example, let’s say that at first users were signing up for your service and paying with their credit cards, but then they realize that they can’t scale with this model and need to switch to a subscription model instead. This is an example of a customer pivot because they changed the way that their customers paid for their product.
4. Changing the Business Model
Finally, one other type of pivot is when you change the business model of your startup.
For example, let’s say that you are making a mobile app and at first you are charging users for it, but then you realize that it would be better to make it free and get paid by advertisers instead.
This is an example of a customer pivot because they changed the business model of their startup.
What Happens When You Pivot?
Once you have decided to pivot, there are a few things that will happen:
1. You will need to decide what your new idea is going to be (i.e., what product or service you are going to offer).
This can be a hard decision if you don’t have any ideas for what to do next, but once you do it should get easier.
The key here is not to get stuck in analysis paralysis and just pick something and move on. In most cases this means starting from scratch again with your branding and messaging so that users know what your new product or service is all about.
Sometimes it’s good to keep the same name (as long as there isn’t already another company with the same name), but sometimes it’s better to change it so that you can start fresh.
2. You will need to update your messaging and branding
So that users know what your new product or service is all about. You should make sure that this messaging is consistent across all of your channels, including your website, your app store page, social media, etc.
This can be a little bit tricky if you have a popular brand name, but it is something that you will need to do eventually anyway if you want to pivot (i.e., once you come up with a new idea for what to do next).
3. You will need to get some quantitative data
On how users are responding to the new product or service so that you can decide whether or not it is working out well enough for you to keep going with it.
If the data looks good then keep going with it and keep working on improving it (you may even be able to raise money at this point). If the data doesn’t look good then it’s time for another pivot.
The key here is not getting stuck in analysis paralysis — if the data isn’t looking good then just move on and try something else instead of trying to fix what isn’t broken (i.e., don’t try to fix what isn’t broken).
In conclusion, pivoting is a great way to respond to changes in the market, and it can also be a great way to learn more about your users and what they need.
However, it is important to remember that there are many different ways to approach a pivot, but if done correctly it can have a huge impact on the success of your startup.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.