8 Ways To Pivot Your Business To Kickstart Growth
Quite the opposite of a move of desperation, a pivot can be an act of liberation, freeing your product or company from your own preconceptions.
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Every entrepreneur I know starts out with a strong conviction that their solution is a perfect match for their target market, and yet almost every one later admits a need to "pivot" before finding their groove. Course corrections, or pivots, are normal for new ventures, so expect them and don't make excuses. Failure is the unwillingness to learn and change based on better information.
Few entrepreneurs know that even the most successful startups had pivots, which rarely get mentioned. For example, you probably never heard that both Facebook and YouTube started out fully intending to be dating sites, but pivoted to something more unique when they found that dating had already become an over-crowded market. Their pivots were early but real.
The types of pivot are innumerable, but there are some more effective ones that I think every early startup should contemplate on a regular basis during their early growth period. Here is my list, based on my own experience as a startup advisor, talking to other angel investors, and derived from the lean startup principles of venture advisor and entrepreneur Eric Ries:
1. Strip the solution down to a focus on a key feature.
No solution can be everything to everyone, but your initial passion can make it feel that way. This confuses customers, and dilutes your marketing impact. I would call this the "less is more" or the "keep it simple" pivot. After initial traction, there is plenty of time to bring back more features.
2. Add that "grabber" feature to make your solution stand out.
Solutions that integrate all the features of multiple products, like Facebook and Twitter, rarely get broad visibility. You need a new and innovative addition to get customer attention, and stand out above competitors. Existing users are trained by use, and rarely move for usability alone.
3. Hone your definition of target customer demographics.
Facebook was aimed initially at college students, later aimed at consumers in general, and more recently found a lucrative growth path with businesses. Pivots thus are a normal and necessary process in expanding the market, and recognizing cultural shifts as well as kick-starting growth.
4. Switch to a more attractive and lucrative business model.
Often entrepreneurs start with a direct-to-customer business model, but learn that many domains only work with distributors or value-added resellers. Other popular business models to try include the subscription model, the razor-blade model, and free solutions supported by paid ads.
5. Change competitive positioning and pricing to improve traction.
Many high-margin, low-volume startups are forced to consider the price-volume tradeoff. Of course, a move on price also puts them in the realm of new competitors, including e-commerce vendors and big-box stores. You can't be on both ends of this spectrum at the same time.
6. Consider alternative technology platforms for the solution.
Sometimes a startup has to pivot to a new technology to stay competitive or improve margins. Other domains like transportation have found the need to pivot, to meet environmental directives and alternative forms of energy. The world around us changes quickly, even for a startup.
7. Adapt to an emerging customer need or pain.
As economic conditions change, and government regulations evolve, businesses are motivated to seek new tools and processes for risk reduction and continued growth. It can be extremely valuable to pivot the focus of your new software technology tool from productivity to compliance.
8. Position your business as a social enterprise versus commercial.
I see many young entrepreneurs with a passion primarily for social change, who don't realize that changing the world costs money. The best are able to keep their social focus while pivoting their business strategy to make money. These two objectives are not mutually exclusive.
To me, a pivot is as natural in a startup as seeking outside funding or shuffling executive roles to better match founder strengths and weaknesses. You don't wait for a crisis to start thinking about it, and you need not hide your pivots for fear of showing weakness. The sooner you recognize the need to make a change, the less it costs, and the greater the return. Are you still hesitating?