To pivot or not to pivot…

The term “pivot” was added to the startup vocabulary in the past decade or so to describe when a startup changes its mission or focus.

Some pivots are small, such as changing the target customer from enterprise to mid-market. Others are large, such as Slack shutting down the game they were working on and instead focusing on the internal messaging system they built to support their game development.

Startup success is never a straight line up and to the right. Along the way you will inevitably ask yourself whether you should keep going in the current direction or not. Here are some thoughts on how to decide whether a pivot makes sense for your business

Reconfirm the Vision

Go back to your long-term vision. Without thinking about the challenges you might be facing today, do you still believe in this vision? Does it still excite you? Is there evidence that this vision will happen?

Set aside sunk costs

Regardless of how much time and $ you have invested in the current direction, set those aside when assessing whether to continue going in the same direction.

Knowing everything you know about the current direction, would you start going down it today? If so, great. If not, then regardless of how much you have invested, you need to change direction.

Consider external Input

Even if you still believe in your vision, look for evidence from the market that the world wants this vision to happen. What are you hearing from actual and potential customers, partners, competitors, press, industry analysts, etc?

This can be tricky of course. lf everyone shares your exact vision, then you’re likely not pursuing something that novel. None of us needed a smartphone – until we had one. It was not a share vision. Still, what signals is the market sending you?

What can be accomplished in runway?

The reason why startups die is that they run out of money. Yes, there are underlying root causes, but you can keep trying to address them as long as you have money.

If you are considering a pivot, you need to make sure you can make sufficient progress in the new direction to be able to raise more capital or get to profitability. There is no point building a 10 foot bridge if the chasm is 100 ft. long.

This is especially true for growth stage (> $5M revenue…) companies. Early stage investors will take a leap of faith. Growth stage investors won’t.

These are some topics to consider as you decide if a pivot is the right more for your business.

Questions to consider

Do I still believe in the vision for this company? Does it excite me? Is it still my purpose or calling?

Knowing everything I know about our current direction and path, if I were starting today would I go in this direction? If not, what does this mean? What changes do we need to make?

Am I open to and actively looking for external input and signals about our current path and long term vision? Am I listening to them? Am I filtering and only hearing what I want to hear?

Do we have enough runway to pull off a pivot and be able to raise more capital or get to profitability?

Photo by Nick Fewings on Unsplash