Pivoting is about refocusing on what adds value to your business, rather than throwing the baby out with the bathwater
Pivoting has become a standard part of idea development, in no small part thanks to the lean startup movement. Ideas are no longer a static entity – they are a starting point from which you can test, iterate and correct until you reach product-market fit. No longer is it seen as a failure to have worked on an idea that didn’t pan out: it’s a founder’s badge of honour. However, if your company is going to flourish after it pivots, you need to ensure it’s a process that increases your idea’s value, rather than destroying it.
When it becomes clear that your idea is heading the wrong way, it’s time to change direction. Maybe you’ve had negative feedback from customers or maybe you’ve learnt how competitive the market is. Some founders react to this by dropping their existing idea and moving onto the next item on their idea list. Often this has no connection to the previous idea that the founders were working on. But this has a real cost.
Every time you pivot in this way, you are discarding important assets that you have created: the knowledge, contacts and technology that you have built. For example, a founder may first try to tackle improving data analysis for consultants before realising that consultants already have good in-house systems for this. They then pivot, pick up the next idea on their list and explore making sales teams more effective. However, it then turns out the space is highly competitive so they try to go in a different direction again. With each pivot the startup loses the skills, knowledge and connections it has built and instead starts from scratch.
A useful mental model for how to pivot well is to think of it as linear ideation. Instead of looking for your idea to fail, you’re looking for the upside – what can you learn from customer and market feedback that allows you to edit and update your idea?
As you spend more and more time in the space, you become a deeper expert. Many founders win by being experts in niche problems. As you go through the process of testing your idea, you build your knowledge about the domain you’re working on, you develop your network and you start building a product. Rather than throwing the baby out with the bathwater, each change of direction acts as a course correction, refocusing your efforts on the part of the business that are yielding the best results.
No idea is perfect
It’s only through iteration and testing that you can get to a good idea. But it also requires perseverance and a recognition of the value you’ve created by going through this process. This may seem logical but many founders give up on this process after the first three or four pivots. Building a startup is a constant learning process and the best founders are those that persevere.