A pivot is the decision to make fundamental changes in the company, based on thorough research and analysis. We talked about its main characteristics and hidden threats in the previous article. Here we’ll discuss the ten types of pivot outlined in Eric Ries’s book The Lean Startup.
These pivot types can be grouped into three fundamental aspects of a startup: The product, the business strategy, and the target audience.
Product pivots
1. Zoom-in pivot
This type of pivot is concerned with choosing one or a couple of your company’s services and discarding the rest. Zoom-in is necessary when some of your company’s services don’t have any or enough users.
Another reason for discarding services could be frustration around the company. For example, if you create a platform both for business and romantic relationships, it’s better to stick with only one direction – just like it happened with Linkedin.
2. Zoom-out pivot
In contrary to the zoom-in strategy, zoom-out means broadening the range of offered services or products. What before was the main product of the company, now becomes one of the many. This is a good strategy for those who have already secured their place in the market and are making a lot of progress in the primary direction. Another case may be inefficient revenue or seasonal business model.
3. Customer need pivot
There’s another side to product pivots: One day, you may find that your users are asking for something other than what you’re offering.
A good example of this type of pivot is the chewing gum company Wrigley’s. Did you know that William Wrigley was selling soup and baking soda when he started out? The gum was just a small gift for the clients. Over time, Wrigley noticed that his customers were coming back for the gum, not for his main products. And so, the pivot happened.
I love this example because it demonstrates two lessons quite well: First, it’s always rewarding to go the extra mile for your customers. Second, you need to be attentive and always try to get their feedback. You never know what they might share with you.
4. Platform pivot
You may get your project started with a mobile app, but then, based on results, notice that it is not working as well as you expected. So, you decide to build a web platform too – or maybe even, instead. This example goes both ways, but in any case, platform pivot means exactly what it says – changing a platform.
5. Technology pivot
This type of pivot happens mostly in well-established companies. It happens during changes or breakthroughs in a specific tech direction that would greatly simplify your product or lower the expenses.
Target audience pivot
6. Customer segment pivot
In this case, the company’s vision is right on point, and the product solves real problems affordably, but not for the people you expected. The reason might be that you made false assumptions on user segments, or maybe they need the product but can’t afford to pay for it.
7. Business architecture pivot
In the broadest sense, companies can be divided into two main types: Business to business (B2B) and business to customers (B2C). Changing from one architecture to another often may be critical for the company. If your offering is too expensive, it may be a good idea to adapt it to business needs. Change in business architecture may also affect your marketing strategy, so be sure to look into that as well.
Business strategy pivot
8. Value capture pivot
If the business architecture pivot meant changing customer types, the value capture pivot is concerned with changing the business model. Maybe you started by selling every aspect of your product but then realized that it’s easier and more rewarding to offer free and premium features instead. Or you may even stumble upon a completely fresh business model. In any case, such changes also require good customer research and behavior analysis.
9. Engine of growth pivot
There are three main strategies for marketing: Viral, paid, and sticky, when you have a high return rate. Which one works best is individual and requires real-world testing, meaning you may often need to change the course here.
10. Channel pivot
Social networks are indeed the most widespread and effective marketing channels, but they’re not the only way. Attending relevant events and appearing in the hot spots for your target customers are other great ways to spread awareness about your brand. Channel pivot can affect your company just as great as any other type.
Development doesn’t mean moving forward. As new obstacles arise on your path towards success, you gain new knowledge and insights. It’s more likely than not that all of it results in shifting from previously held beliefs. It’s important not to be afraid of making a change, but at the same time sometimes you have to risk persevering. Balance is in everything.
Product, business architecture, and customer segment pivot models
30 October 2020A pivot is the decision to make fundamental changes in the company, based on thorough research and analysis. We talked about its main characteristics and hidden threats in the previous article. Here we’ll discuss the ten types of pivot outlined in Eric Ries’s book The Lean Startup.
These pivot types can be grouped into three fundamental aspects of a startup: The product, the business strategy, and the target audience.
Product pivots
1. Zoom-in pivot
This type of pivot is concerned with choosing one or a couple of your company’s services and discarding the rest. Zoom-in is necessary when some of your company’s services don’t have any or enough users.
Another reason for discarding services could be frustration around the company. For example, if you create a platform both for business and romantic relationships, it’s better to stick with only one direction – just like it happened with Linkedin.
2. Zoom-out pivot
In contrary to the zoom-in strategy, zoom-out means broadening the range of offered services or products. What before was the main product of the company, now becomes one of the many. This is a good strategy for those who have already secured their place in the market and are making a lot of progress in the primary direction. Another case may be inefficient revenue or seasonal business model.
3. Customer need pivot
There’s another side to product pivots: One day, you may find that your users are asking for something other than what you’re offering.
A good example of this type of pivot is the chewing gum company Wrigley’s. Did you know that William Wrigley was selling soup and baking soda when he started out? The gum was just a small gift for the clients. Over time, Wrigley noticed that his customers were coming back for the gum, not for his main products. And so, the pivot happened.
I love this example because it demonstrates two lessons quite well: First, it’s always rewarding to go the extra mile for your customers. Second, you need to be attentive and always try to get their feedback. You never know what they might share with you.
4. Platform pivot
You may get your project started with a mobile app, but then, based on results, notice that it is not working as well as you expected. So, you decide to build a web platform too – or maybe even, instead. This example goes both ways, but in any case, platform pivot means exactly what it says – changing a platform.
5. Technology pivot
This type of pivot happens mostly in well-established companies. It happens during changes or breakthroughs in a specific tech direction that would greatly simplify your product or lower the expenses.
Target audience pivot
6. Customer segment pivot
In this case, the company’s vision is right on point, and the product solves real problems affordably, but not for the people you expected. The reason might be that you made false assumptions on user segments, or maybe they need the product but can’t afford to pay for it.
7. Business architecture pivot
In the broadest sense, companies can be divided into two main types: Business to business (B2B) and business to customers (B2C). Changing from one architecture to another often may be critical for the company. If your offering is too expensive, it may be a good idea to adapt it to business needs. Change in business architecture may also affect your marketing strategy, so be sure to look into that as well.
Business strategy pivot
8. Value capture pivot
If the business architecture pivot meant changing customer types, the value capture pivot is concerned with changing the business model. Maybe you started by selling every aspect of your product but then realized that it’s easier and more rewarding to offer free and premium features instead. Or you may even stumble upon a completely fresh business model. In any case, such changes also require good customer research and behavior analysis.
9. Engine of growth pivot
There are three main strategies for marketing: Viral, paid, and sticky, when you have a high return rate. Which one works best is individual and requires real-world testing, meaning you may often need to change the course here.
10. Channel pivot
Social networks are indeed the most widespread and effective marketing channels, but they’re not the only way. Attending relevant events and appearing in the hot spots for your target customers are other great ways to spread awareness about your brand. Channel pivot can affect your company just as great as any other type.
Development doesn’t mean moving forward. As new obstacles arise on your path towards success, you gain new knowledge and insights. It’s more likely than not that all of it results in shifting from previously held beliefs. It’s important not to be afraid of making a change, but at the same time sometimes you have to risk persevering. Balance is in everything.