Pivot like a pro! The key to a successful startup?
So you gave up your job to launch your startup, your friends and family invested in you, it’s a year down the line… and it’s not working. Do you quit, do you persevere… or do you pivot?
Most entrepreneurs and successful business owners will admit to sleepless nights debating this and other questions; Is there a credible plan B? Is there still cash in the bank? Are the investors keen for you to give it another go or do they want to cut their losses? Are you happy to turn down that 9-5 (maybe just for another 6 months..)? And what exactly is a pivot anyway..?
Silicon Valley entrepreneur and author Eric Ries, who came up with the term in his book The Lean Startup, is emphatic about its importance but not too specific about what it actually entails.
A quick straw poll of startup founders at the Innovation Centre in Bath (UBIC) suggests that it can mean anything from a small change in product or market focus to a radical rethink of the fundamentals of a business.
If there is a lack of clarity about the outcome, there is one recurrent theme from all those questioned about the primary motivation – it means your business / idea / life-quest is failing and this is usually seen as a bad thing. Ries, in fact, points out that quite the opposite is true; “Failure” he says “is a prerequisite to learning.”
Deciding to pivot
Easy for him to say perhaps; but when you have external investors, employees and fellow co-founders who are feeling just as frazzled and bewildered as you, drawing salutary lessons from your lack of traction or sales is probably not the first thing on your mind.
“It’s rare to find a flourishing business that has followed to the letter the trajectory that was set out by its founders in the original plan”
If things have felt hard for a long time then there’s probably something fundamentally wrong – and it takes a degree of objectivity and self examination to track down what it is, and then to find out if there is an actual plan B – of if you just want there to be one.
One thing is for sure, if the idea for your startup was conceived in an excitable moment in the pub, the decision to pivot away from that original idea won’t be; it will be after a hard slog of building, tweaking, tracking and responding to criticism, complaints, and occasionally (joy!) words of encouragement – it’s not working like this, we need to do that instead: the stats and the market say so.
When we first launched our business, Storenextdoor – originally a peer-to-peer online marketplace for storage – we would initially be tempted to try and address a lack of traction by delivering a new design, feature or marketing angle because we thought that either our user interface or positioning was the issue.
Startup again - back to the drawing board
However, it was really about getting to know the market in which we were operating and identifying who our real customer was – our decision to pivot to being a hyper-local directory did not come out of the blue, but was a realisation that in our attempts and failure to disrupt a market we had created a platform that could complement it incredibly well – and deliver reward. Suddenly things felt right and we could pick up speed again.
“Customers and markets are fickle friends and the business needs to be adaptable”
And it seems we are not alone; it’s rare to find a flourishing business that has followed to the letter the trajectory that was set out by its founders in the original plan. Customers and markets are fickle friends and the business needs to be adaptable – this is generally why an investor at a pitch will take a big interest (and invest) in the team as well as the proposition itself.
Some famous examples of pivots:
• Uber – apparently it was originally set up to provide a bus service to students
• Youtube – started as a video dating site
• Nintendo – used to make playing cards
• Groupon – evolved from a campaign website called ThePoint.com
• Flickr – was a massively multiplayer online game
• Pinterest – originally called “Tote” which was an online retailer rating website
Case study of a successful startup pivot: Alister Rollins: Founder and CEO – MoveGB
“Even though it’s usual to go through various iterations of a product model before actually scaling it, it’s important to me that you keep your eye on the main purpose of the business. The drive to achieve that purpose will guide you on when to pivot entirely and when to iterate the current model.
For MoveGB our purpose is to create a sustainable model of exercise provision for both provider and consumer so we can stop the new year’s resolution gym fads and create a more active population. It was our obsessive focus on this core purpose that guided us through various iterations and a few complete pivots in our model and proposition.
MoveGB started to really fly with our ‘lifestyle membership’ using our network of fitness and sports provider partnerships to offer a member access to hundreds of different local exercise classes, gyms and studios. MoveGB is expanding rapidly and we are targeting 35 cities to launch in the next 12 months.”