When to Pivot Your Business -- and When You Should Just Quit
Winners never quit, but they do cut their losses while there is still something to salvage.
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If you're even thinking about pivoting, it's because you sense something isn't quite right. You may have many metrics in your favor, and even solid revenue, but an honest assessment of the situation is such that you know you're not quite going in the right direction. Or it could be entirely dark and stormy, with revenue dropping and customers disappearing; you wonder if it isn't time to throw in the towel. But before we discuss how to prepare for a pivot and some guidelines to help you do so, we need to examine if pivoting is the real answer to your problems or if quitting is the solution.
Where do you stand
As you ponder what is next, you need to consider where you and your team stand.
Funding: Do you have enough money to make it at least another six months?
Staff: Are your staff still engaged; are they believers in your mission?
Investors: Are the biggest funders of your firm supportive of your direction?
If your answer is yes to all these questions, then a pivot is a possibility that can take you to the next level. If the answer is no to one or two of these questions, then you should seriously consider quitting.
In a market and society that glamorizes success and demonizes failure, quitting may seem like the worst of all choices. It's only recently that people like Gary Vaynerchuk have "championed" failure as necessary to find out what really works for people both personally and professionally. As Seth Godin famously noted at the beginning of his book The Dip, winners quit the right things at the right time. But before quitting, you should consider the possibility of a pivot.
Related: Quitting My $97K Job Saved My Life
Thanks to people like Eric Ries and other lean startup evangelists, most people are familiar with the general notion of a pivot. It's a conscious movement towards an element or subset of your core offering(s) that is getting far more traction than what you thought would be the primary use case of your customers. While we know of recent examples of pivots that led to great success, like Twitter and PayPal, it's not something limited to the tech world. Avon, a cosmetics company, got its start from a door-to-door book salesman who gave away free perfume samples with his orders. Wrigley, if you might believe it, was a soap manufacturer that gave away chewing gum with its product. Avon doesn't sell books and Wrigley Field wasn't built on soap suds. The owners went where the market was.
Those owners, like many who have executed successful pivots since them, had one of several qualities at hand that helped them make a decision to pivot instead of quit.
Honesty untied to an ego: They were willing to face facts that their "great idea" wasn't actually so great but there was a much better idea, validated by the market, that awaited them if they were willing to admit they were wrong. No great ceremony of humiliation necessary: just fact-facing.
Awareness tied to a trust of instinct: Many good business owners instinctively know their businesses, such that if you were to ask them growth rates or revenues or any key metrics at any given time, they can reply quite accurately without consulting numbers. The possibility of a pivot isn't something that occurs in a flash, but is usually the result of growing awareness of what is working and what isn't, measured against the gut instincts of the ownership and/or management team. The reality that it may be time to quit is a painful feeling, but one that should not simply be dismissed.
Consultation with trusted mentors. Very often we consult mentors because we want their wisdom and objectivity which can stand apart from our passion and struggles. But also too, we seek their advice so we can measure how convincing we are to ourselves as we present them with the issues. Do we believe what we are saying? Sometimes that tells us everything we need to know about what direction we should head next.
Related: 5 Big Brands That Had Massively Successful Pivots
Entrepreneurs are very often stubborn.That stubbornness can pay great dividends, but it can also delude people into persevering longer than they should have. As we alluded to above, if funding, staff, or investors are a question, you may not have the ability to pivot. But even if you have all those going for you, it's important to take your own temperature. It may have taken a lot out of you getting the company to this point. Sometimes, people aren't kind to themselves or those around them in pursuit of their dreams: they ignore their own well-being and can lose the dreams they were pursuing and the realities they already possessed.
If you aren't in love with what you're doing, you need to find a way to replace yourself so that the company has the best chance of succeeding, because a pivot without your passion is a disaster in the making. While it's true that "sales cure all" and sometimes you are demoralized because you haven't yet put the right systems in place, the instinct that tells you that a pivot is what's needed is the same one that can indicate that this is the end of the road.
While it may not seem like it, just facing the question of pivoting vs quitting is a milestone. It means that rather than talk, you have acted. Rather than imagine fears, you have faced them. You've moved forward to where you are now. The answer to whether you should pivot or quit isn't easy, but it is simple: trust yourself and those around you, and be brutally honest about the present and your hopes for the future.