Insights

Is it time for your startup business to pivot?

What serial entrepreneur, Eric Ries - Silicon Valley stalwart and father of lean start up methodology – has done, is build an arsenal of tools from which you (as an ambitious entrepreneur) can use to make sure your business is heading in the right direction.

What you have to do, is use the right tools at the right time to ensure your business connects with customers, solves a genuine problem in the marketplace, and achieves its high growth potential.

Whilst lean startup methodology operates on a step-by-step basis, ensuring that you are creating the best possible product or service at every stage, there are times when you will be wondering if it’s worth persevering or you should perhaps just give up. WAIT – these aren’t your only choices.

Lean startup methodology has a tool for this too…

Ries introduces “The Pivot”, which he defines as a “change in strategy without a change in vision” and it has also been explained as a “structured course-correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” 

The idea is that following each “build-measure-repeat” cycle, results are analysed and questions are asked regarding what is working and what isn’t.

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These findings, based on metrics and target audience feedback, will tell you whether your startup is fulfilling their needs, or if you need to change direction.If the latter is the case, this is where The Pivot comes in.

The Pivot is invaluable to entrepreneurs who are dedicated to building high-achieving businesses. As the name suggests, a pivot doesn’t have to be an "extreme action" in that the change you make can be as large or as small as your findings indicate necessary for the success of your startup.

Also, the idea is that you can change things without abandoning everything that has gone before.

What if you don't pivot?

If a business ignores the findings and warning signs, choosing instead to persevere, they can find themselves in a zombie-like state – the trick, however, is obviously to pivot before you get to that stage. CEO and co-founder of Mattermark, Danielle Morrill wrote a great piece on Zombie Start Ups which you can read here. In it, she gives some facts and figures as to what constitutes a zombie:

  • You haven't hit 10% week-over-week growth on any meaningful metric (revenue, active users, etc)
  • You've launched a customer service and have less than 2% week-over-week growth in signups
  • You've launched a consumer service and have less than 2% week-over-week growth in revenue          pipeline
  • You're working on the same idea after 12+ months and still haven't launched.

If any of the above points sound like your business, you really need to do something. If you're not there yet, but can see yourself heading in that direction, it's not too late to pivot

Remember – pivoting isn’t a one-off act. Running a lean start up is an iterative process, which means that you may find you need to pivot a number of times before you find the right way.

Does everyone pivot?

Some of the most recognisable brands and biggest businesses around at the moment are a long way from where they started out and had to go through a number of pivots to get to where they are now. For example, deal-of-the-day website, Groupon, originally started out as an online activism platform called, The Point.

The platform received no traction and the founders decided to keep the online platform part of the business and instead, look at coupon promotion (the first of which was for a local pizzeria). Initially, the coupon was only redeemed around 20 times but this still showed that there was significant interest and group action had been coordinated via their platform.

This became Groupon and in just three years, grew into a billion dollar business.

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