The word pivot has appeared in the business world quite recently, but it’s become one of the most popular terms used in the startup vernacular.
So where did this term come from, and more importantly, what does it mean?
The word pivot was first used by Eric Ries in his book The Lean Startup to define a “Structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”. In other words, a pivot marks the change of direction of a company, usually a startup. As Casper Ravn-Sørensen points out, almost all startups will pivot at some point. This is a normal course of growth for almost all companies, therefore pivoting is not something to be afraid of. Many successful companies have resorted to pivoting at crucial times °- Pinterest, Groupon and Twitter are just some businesses that have reimagined themselves with pivoting and grew with new ideas afterwards.
What does pivoting look like?
When a company tries out the service/product that it offers, there will be some user feedback, and if the feedback is less-than-positive, that’s when the leader should consider pivoting. As Casper Ravn-Sørensen says, the CEO’s job in this case is to reflect on the first experience in order to modify the initial plan and ideas.
There are two versions of pivoting:
- some startups go through small tweaks and keep the initial product and/or idea with some modifications
- others do a 180° and change their initial idea almost completely
No matter the change, pivoting brings fresh additions to the original creation which often leads to a serious boost in business.
What should one do when the company has to resort to pivoting?
Having some trouble with your startup does not mean instant failure, you should just take some easy steps in order to improve your business. Here are the steps that Casper Ravn-Sørensen recommends:
- Take a step back and analyze the customer feedback.
- List the reasons that led to dissatisfaction.
- Work on new plans and ideas to improve the original plan.
- Chose the best ideas and develop them.
- Discuss the new plan with your team.
- Implement the new plan.
- Review new feedback and react accordingly.
As you can see, pivoting is not an impossible task and it is certainly not a definite sign of failure. With these 7 steps, you should be able to pivot in no time. If the new ideas are not working, repeat the steps, pivoting is not necessarily a linear path, it often requires loops as not all ideas will work immediately. Remember, the business world is a fast-changing universe and your ideas can be modified along the way. As a good entrepreneur, you have to work hard on reinventing your business and pivoting allows just that.