In a startup’s life, there often comes a moment when the main team gathers and asks the question that will define their future: Should we change the course of action or stick with the plan?
The Lean Startup, the book that became a must-read for every startupper, offers us a methodology that’s built around the concept of pivoting.
Let’s start with the definition
Eric Ries, the author of The Lean Startup, defines a pivot as:
“Pivot is a structured course correction designed to test a new fundamental hypothesis about the product, business model, and engine of growth.”
In simpler words, a pivot is a research- and feedback-based decision to make fundamental changes in the company in simpler words.
What’s the difference between a pivot and creating a whole new product?
During a pivot, the goals of the company stay the same. The only thing that changes is the strategy towards the goal. This may be a complete transformation of the product, but as long as the changes are based on primary research and analysis, it is considered a pivot.
One of the most radical examples of a pivot is Stewart Butterfield’s change, of course, from a videogame to a communication platform Slack. Even though the two products have nothing in common, Slack was a system that was used by the team while they were working on videogame development. The system was well-tested; They knew there was nothing like it on the market, and they also knew how important and useful their hidden product was.
On the other hand, when Evan Williams and his team quit on the podcast platform Odeo and started working on Twitter instead, they successfully closed one company and opened a new one that had nothing to do with the former: No research, no industry, no proposition.
What’s the difference between a pivot and a small change?
Updating a marketing strategy or even coming up with a new one is not a pivot. Targeting a new customer base is a pivot. Broadening the marketing channels is a pivot. Improving product functionality is not a pivot. Changing the design of the product is not a pivot. Adding new services that broaden the niche of the company is a pivot.
To come back to the definition of a pivot, it consists of two main criteria:
A pivot must be based on primary research and testing, customer feedback, defined goals, and objective analysis of the results.
A pivot must fundamentally change the course of the company’s development to be considered as such.
When’s the right time to pivot?
There’s no formula for it. Nobody can tell you whether you need a pivot or not. This decision has to be made by the company and those directly involved in it. And because of the obscurity around it, It’s essential to come back to this question throughout the project development.
Before you make any changes, you have to be able to give an argumented answer to the question:
What have I learned that led me to pivot?
Do you think that your product is valid, but the market strategy does not yield satisfactory results? Maybe the technological part turned out to be more complex and more expensive than you thought?
Answers to such questions come from product testing and customer feedback. If you don’t have a valid argument as to why you need to pivot, you should persevere until you have a good understanding of what’s working and what’s not.
Start thinking about it from the beginning
A startup is an ideal environment for experimentation – especially in the beginning stages. Use this freedom to its maximum. The bigger the company becomes, the harder it gets to make a risky turn.
Hidden threats
Needless to say, a wrong decision about pivoting or persevering might cause your whole project to fail. Testing, research, and communicating with the customers will help you make the right call, but there are factors you need to be careful with. Ask yourself how relevant the metrics you chose to assess your progress with; How objective are your assumptions? Is the source you use for making a decision trustworthy?
Press and friends
Often, the press sees reality in a whole new light. Their opinions should not affect your decisions. And the same goes for your friends. Friends always help and support each other, but that doesn’t mean that you should turn to them when making a business decision. When it comes to your company’s fate, it’s your customers you need to listen to, not the press, not your friends.
Vanity metrics
There might be some metric of your progress that looks good in terms of mere results, but that shouldn’t blind your judgment. Success doesn’t last forever if you don’t work for it as you go. Metrics that look good but don’t provide sufficient feedback, Eric Ries calls vanity metrics, and he shares his personal experience with them.
When Eric’s startup, the IMVU (I won’t get into the details), started seeing good traction, the team members basically stopped developing the platform. They were constantly adding new features, sure, but they were neglecting the idea that there might be some fundamental changes still needed. Later on, it turned out that the platform architecture was too weak and even hard to use. When they moved from initial customers to mainstream adopters this problem showed its ugly head and Eric and his team had to face it under a lot of stress, with user acquisition going much slower and harder than before.
This story is a good example that you always have to keep on checking the product no matter what. As long as your company exists, you should be asking yourself from time to time: Are there changes that we need to make to keep growing? As we’ll see in the upcoming article, there’s no need for the whole project to be flawed to make some changes in this or that direction.
Pivot without validation
Changing the strategy of a company is good, but that doesn’t mean it’s always necessary. Remember, The Lean Startup methodology is based on the following steps:
Build, Measure, Learn
You can’t jump over these steps. Until you build the product you envision and check the results, you won’t be able to validate or invalidate its validity.
As we read from Eric’s book:
“The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere.”
What Is A Pivot And When Is The Right Time For It
27 October 2020In a startup’s life, there often comes a moment when the main team gathers and asks the question that will define their future: Should we change the course of action or stick with the plan?
The Lean Startup, the book that became a must-read for every startupper, offers us a methodology that’s built around the concept of pivoting.
Let’s start with the definition
Eric Ries, the author of The Lean Startup, defines a pivot as:
“Pivot is a structured course correction designed to test a new fundamental hypothesis about the product, business model, and engine of growth.”
In simpler words, a pivot is a research- and feedback-based decision to make fundamental changes in the company in simpler words.
What’s the difference between a pivot and creating a whole new product?
During a pivot, the goals of the company stay the same. The only thing that changes is the strategy towards the goal. This may be a complete transformation of the product, but as long as the changes are based on primary research and analysis, it is considered a pivot.
One of the most radical examples of a pivot is Stewart Butterfield’s change, of course, from a videogame to a communication platform Slack. Even though the two products have nothing in common, Slack was a system that was used by the team while they were working on videogame development. The system was well-tested; They knew there was nothing like it on the market, and they also knew how important and useful their hidden product was.
On the other hand, when Evan Williams and his team quit on the podcast platform Odeo and started working on Twitter instead, they successfully closed one company and opened a new one that had nothing to do with the former: No research, no industry, no proposition.
What’s the difference between a pivot and a small change?
Updating a marketing strategy or even coming up with a new one is not a pivot. Targeting a new customer base is a pivot. Broadening the marketing channels is a pivot. Improving product functionality is not a pivot. Changing the design of the product is not a pivot. Adding new services that broaden the niche of the company is a pivot.
To come back to the definition of a pivot, it consists of two main criteria:
A pivot must be based on primary research and testing, customer feedback, defined goals, and objective analysis of the results.
A pivot must fundamentally change the course of the company’s development to be considered as such.
When’s the right time to pivot?
There’s no formula for it. Nobody can tell you whether you need a pivot or not. This decision has to be made by the company and those directly involved in it. And because of the obscurity around it, It’s essential to come back to this question throughout the project development.
Before you make any changes, you have to be able to give an argumented answer to the question:
What have I learned that led me to pivot?
Do you think that your product is valid, but the market strategy does not yield satisfactory results? Maybe the technological part turned out to be more complex and more expensive than you thought?
Answers to such questions come from product testing and customer feedback. If you don’t have a valid argument as to why you need to pivot, you should persevere until you have a good understanding of what’s working and what’s not.
Start thinking about it from the beginning
A startup is an ideal environment for experimentation – especially in the beginning stages. Use this freedom to its maximum. The bigger the company becomes, the harder it gets to make a risky turn.
Hidden threats
Needless to say, a wrong decision about pivoting or persevering might cause your whole project to fail. Testing, research, and communicating with the customers will help you make the right call, but there are factors you need to be careful with. Ask yourself how relevant the metrics you chose to assess your progress with; How objective are your assumptions? Is the source you use for making a decision trustworthy?
Press and friends
Often, the press sees reality in a whole new light. Their opinions should not affect your decisions. And the same goes for your friends. Friends always help and support each other, but that doesn’t mean that you should turn to them when making a business decision. When it comes to your company’s fate, it’s your customers you need to listen to, not the press, not your friends.
Vanity metrics
There might be some metric of your progress that looks good in terms of mere results, but that shouldn’t blind your judgment. Success doesn’t last forever if you don’t work for it as you go. Metrics that look good but don’t provide sufficient feedback, Eric Ries calls vanity metrics, and he shares his personal experience with them.
When Eric’s startup, the IMVU (I won’t get into the details), started seeing good traction, the team members basically stopped developing the platform. They were constantly adding new features, sure, but they were neglecting the idea that there might be some fundamental changes still needed. Later on, it turned out that the platform architecture was too weak and even hard to use. When they moved from initial customers to mainstream adopters this problem showed its ugly head and Eric and his team had to face it under a lot of stress, with user acquisition going much slower and harder than before.
This story is a good example that you always have to keep on checking the product no matter what. As long as your company exists, you should be asking yourself from time to time: Are there changes that we need to make to keep growing? As we’ll see in the upcoming article, there’s no need for the whole project to be flawed to make some changes in this or that direction.
Pivot without validation
Changing the strategy of a company is good, but that doesn’t mean it’s always necessary. Remember, The Lean Startup methodology is based on the following steps:
Build, Measure, Learn
You can’t jump over these steps. Until you build the product you envision and check the results, you won’t be able to validate or invalidate its validity.
As we read from Eric’s book:
“The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere.”