How, Why, and When to Pivot a Startup Business
Starting a business is a huge endeavor and one that comes with no guarantees of success. If your startup does become successful, you may find that the market, your strategy, and/or your product has changed drastically from the original plan. In these cases, you may need to consider pivoting your business in order to stay competitive and grow. Read on to learn more about the definition of a business pivot, the various reasons startups need to pivot, when and why you should pivot, and a step-by-step guide for how to pivot a business.
What is a Business Pivot?
A business pivot is a change in strategy for a business, when it adapts its approach or direction to better meet changing market and customer needs. It typically requires a shift or repositioning of the existing product or service and/or the underlying business model, in order to grow and remain competitive in the market. Pivots often involve significant shifts and changes, such as dramatically altering the company mission or vision, adding or removing products or services, or changing the way you reach customers. For example, during the pandemic, some ecommerce businesses pivoted to curbside pickup and in-store shopping, while others switched to a digital-only model.
When and Why to Pivot Your Business
Business pivots are often used to respond to changes in the market and customer needs, but there are other indicators that could prompt a pivot. Below are a few of the most common reasons startups need to pivot:
- A Shift in the Market
Your industry, market, or competitive landscape could have shifted over time, requiring your business to adapt its approach to remain competitive. For example, if demand for your product changes due to economic conditions, competitors entering the space, or a new innovation that disrupts the market, your business may need to pivot from its original strategy.
- Customer Behavior Has Changed
Your customers’ purchasing habits, preferences, and needs can change over time. Your business needs to pivot if it is unable to meet these changing customer needs. For example, if your customers are now using mobile devices more frequently than desktops or demanding faster shipping times, you may need to pivot to keep your customers satisfied and engaged.
- Inability to Reach Scale
If your business is unable to reach the scale it requires to be successful, a pivot may be necessary. You may need to adjust your product, pricing, customer base, or pricing model to reach the scale you set out to achieve.
- Your Business Model is No Longer Relevant
Your business model may become outdated or change over time. For example, if you have an asset-heavy model in a sector prone to rapid technological change, it’s important to regularly review your business model and make necessary changes to keep it relevant.
- Detour from Original Plan
Your original business plan may need adjustment if it is no longer working. If your business is having difficulty meeting customer needs or achieving scale, you may need to pivot away from the original plan and find other pathways to success.
How to Pivot a Startup Business
If you need to pivot your business, you likely want to know the exact steps to do so. Luckily, pivoting your business is not as difficult as it may seem. Here is a step-by-step guide to help you successfully pivot your startup business.
- Problems and Opportunities
The first step is to identify the problems your business is facing and the opportunities you can exploit in the market. Consider what changes you could make to better meet customer needs and how your existing product or services can be repositioned to take advantage of these opportunities.
- Consider Alternatives
Look out for innovations or competitors that could provide alternative solutions for customers. Ask yourself if there are new or better ways to solve customer’s problems that a pivot could achieve, or evaluate how your product or service could be further improved.
- Step Back and Evaluate
Take the time to step back, assess the situation, and carefully review all ideas and alternatives. Having a second-set of eyes can be helpful in determining where your business is compared to the market, customer needs, and competition.
- Prioritize and Brainstorm
Once you have evaluated the situation, prioritize the most important and valuable opportunities and create a timeline for implementing them. Brainstorm ways to speed up the process or find more cost-efficient solutions.
- Make the Change
Once you are ready, make the changes to your business model, product, or service that are necessary for a successful pivot. Ensure you have the support of your team and/or investors, and be willing to adjust the plan if needed as you go.
- Monitor Results
Finally, closely monitor the results of your pivot. Look for feedback from customers, analyze the data, and pay attention to how the competition is responding to your changes. You may need to fine-tune or adjust the strategy as you move forward.
Be it a large scale shift or a minor tweak, pivoting your business when the circumstances demand can be a critical move in the success of your startup. It’s important to stay abreast of changes in the market, customer needs, and competition, so you can identify opportunities and pivot quickly when it is necessary. Always be willing to adjust your plan as needed, and use the step-by-step guide above to successfully pivot your startup business.
