Pivot or Persevere? The Key to Startup Success

Every entrepreneur eventually faces an overriding challenge in developing a successful product: deciding when to pivot and when to persevere. A pivot is structured course correction designed to test a new fundamental hypothesis about the product, business model and engine of growth. Entrepreneurs periodically must ask themselves a seemingly simple question: Are we making sufficient progress to believe that our original strategic hypothesis is correct, or do we need to make a major change?

There is no bigger destroyer of creative potential than the misguided decision to persevere. Company that cannot bring itself to pivot in a new direction on the basis of feedback from the marketplace can get stuck in the land of the living dead, neither growing enough no dying, consuming resources and commitment from employees and other stakeholders but not moving ahead.

Startup productivity is not about cranking out more widgets or features. It is about aligning our efforts with a business and product that are working to create value and drive growth. In other words, successful pivots put us on a path toward growing a sustainable business.

Related: Lean LaunchPad -- A Crash Course in Startup Success

Failure is a prerequisite to learning. The problem with the notion of shipping a product and then seeing what happens is that you are guaranteed to succeed -- at seeing what happens. But then what? As soon as you have a handful of customers, you're likely to have five opinions about what to do next. Which should you listen to? A pivot requires that we keep one foot rooted in what we've learned so far, while making a fundamental change in strategy in order to seek even greater validated learning.

Ask most entrepreneurs who have decided to pivot and they will tell you that they wish they had made the decision sooner. There are three reasons why this happens.

1. Vanity metrics can allow entrepreneurs to form false conclusions and live in their own private reality.
2. When an entrepreneur has an unclear hypothesis, it's almost impossible to experience complete failure, and without failure there is usually no impetus to embark on the radical change a pivot requires.
3. Many entrepreneurs are afraid. Acknowledging failure can lead to dangerously low morale. Most entrepreneurs' biggest fear is not that their vision will prove to be wrong. More terrifying is the thought that the vision might be deemed wrong without having been given a real chance to prove itself.

Entrepreneurs need to face their fears and be willing to fail, often in a public way. In fact, entrepreneurs who have a high profile, either because of personal fame or because they are operating as part of a famous brand, face an extreme version of this problem.

Related: Business Planning for the 'Lean Startup'

The decision to pivot requires a clear-eyed and objective mindset. It typically is emotionally charged for any startup and has to be addressed in a structured way. One way to mitigate this challenge is to schedule the meeting in advance. I recommend that every startup have a regular “pivot or persevere” meeting. In my experience, less than a few weeks between meetings is too often and more than a few months is too infrequent. Each startup has to find its own pace.

Excerpted from The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (Crown Business, 2011) by Eric Ries.