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How Stagnation -- and Pivoting -- Can Crush a Startup

April 30, 2013
URL: http://www.entrepreneur.com/article/226439

Oscar Wilde famously quipped that "Fashion is a form of ugliness so intolerable that we have to alter it every six months." One could say the same of startups.

Most early-stage companies -- bootstrapped or VC-backed -- take time to generate real traction. And unlike passion projects or run-of-the-mill small businesses, linear growth for portfolio companies can be a harbinger of doom.

It's the NHL absolutism: achieve hockey-stick growth or head home. That's why meager gains or stagnation mandates change, and most startups will struggle through one or several severe changes, or pivots, in search of escape-velocity growth (a.k.a. Facebook, Twitter, et al.)

But too often, pivoting isn't purposeful change, but a thinly veiled attempt to buy more time. In a sense, pivoting has become the strategy, rather than a survival tactic. That may have worked for some startups like Fab.com, but others risk choking their potential.

Related: Is Pivoting a Smart Strategy for Young Entrepreneurs?

The cycle of drastic change can be both risky and costly, as consumers are ever on the lookout for the next big thing. So instead of gutting your business model every few months, the goal should be to attain a faster, more flexible state of evolution. Don't look for growth in numbers alone but true maturation. Businesses ought to embrace a structure (not just an operating model) where change is built in.

From my perch in the fashion/ecommerce world (I'm the CEO of BUREAU OF TRADE), I've noticed a number of upstarts that are leading the change "charge." Not only are we endeavoring to make good on this strategy of constant flux, I've noticed a few standout examples:

Related: Picked the Wrong Major? Here's How to Pivot Into Entrepreneurship

Related: 'The Story of Stuff' and How Startups are Heeding Its Message

Ultimately, it's not about 180-degree pivots in pursuit of 'escape velocity.' Nor is it about a sizable exit. It's about relentless, purposeful change in the service of creating a great company. At the moment, some of the finest examples to follow are emerging from the most vulgar of all industries (other than the rest): fashion.

How do you think startups could more easily incorporate change? Or shouldn't they? Tell us your thoughts in the comments section.