Pivot or persevere? Learn when to pivot your business

May 26, 2020

Business is a lot like poker. It’s full of uncertainty, and your strategy is how you choose to handle that. Knowing when to hold, fold and walk away is what will give you the greatest odds of success. And that’s exactly the concept Eric Ries refers to in The Lean Startup, when he discusses whether to “pivot or persevere”.

For startups, change is actually business as usual. Change is how you stay connected to reality. And it’s normal because, in the first two years of a startup, you’re still trying to find the right path. Even after this market testing phase, there might be strong signs that you need to pivot your business. But like in a game of poker, you can’t be absolutely sure if changing, or “pivoting”, is the right choice. All you can do is know what signs to look for, and make the best decision you can with the information that you have.

In this article, we’ll discuss what it means to pivot, when to pivot your business, and how to decide whether to pivot or persevere.

What is a business strategy pivot?

In Ries’ words, a pivot is a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."

Hence, a pivot is a change in strategy, but it needn’t be an overhaul or complete U-turn. In fact, pivoting is not about simply starting again because what you tried didn’t work. It’s often about looking at what has worked, and seeing how you can re-focus using those insights. Knowing whether or not to pivot your startup is about understanding how much, if anything, you need to change today.

When we launch a product, we’re assuming that it will reach its objectives based on an original hypothesis. But things often don’t go as we expect. There comes a time when we feel ready to make a new hypothesis, one that could change the direction of our product or company altogether. That’s essentially a business pivot.


Here are Ries’ 10 business pivot examples:

1. Zoom-in pivot

A single feature of your product becomes the whole product.

Sometimes one specific feature gets significantly more traction than the rest of your product. In these cases, channeling your resources into that feature alone can allow you to get your product onto the market much more quickly.

2. Zoom-out pivot

Your current product becomes a single feature of a bigger product.

This is the reverse of the above. It means you’ve established that there’s an interest in your product, but you’ve reason to believe that it needs to be a part of a larger, more developed product in order to be successful.

3. Customer segment pivot

Your product is repositioned towards a different type of customer.

This pivot results from discovering that your product interests a different audience to the one you were originally pushing it to. In this case, you might not need to change your product much at all – only your customer persona.

4. Customer need pivot

Your product is adjusted based on a greater understanding of or new revelations about your customer’s needs.

You might decide to pivot in this way if you decide that the problem you’re solving is not important enough to your customers. It involves better understanding their needs, in order to find a problem that they would pay you to solve.

5. Platform pivot

Your platform is delivered on a different platform, such as a mobile app.

6. Business architecture pivot

There’s a concept by Geoffrey Moore that a business can either be high-margin, low-volume, or low-margin, high-volume. This represents a business being mass market, or the opposite, in which a product is B2B with a more expensive sales cycle, for example.

You might decide to pivot your business from one of these to the other.

7. Value capture pivot

The way you make money from your product, in how you charge your customers, changes.

An example of this pivot would be switching to a subscription business model from a sale-by-sale e-commerce model.

8. Engine growth pivot

Your growth strategy changes in order to achieve faster or more profitable growth.

Most startups use one of three primary growth engines. Viral growth, when current users recommend other users. Paid growth, when you spend marketing budget on acquiring new customers. And sticky growth, which is focused on customer retention and maintaining a low churn rate. You can pivot from one of these growth engines to another.

9. Channel pivot

How and where you sell your products and services changes (for example, in stores, online, through partners, in-app).

Often, the requirements of the channel determine the price, features, and competitive landscape of a product. A channel pivot acknowledges that the same solution could be delivered more effectively through a different channel.

10. Technology pivot

You change the technology that your project is built upon.

This pivot comes about when you know you can achieve the same outcome with a different technology that is lower cost and/or better performance.


So a business pivot can take many forms, and which pivot we choose will depend on what we’ve learned from our initial experiments.

While each of the pivots listed above contains its own explanation of how you might use that pivot, it’s not always clear whether or not you should change course at all. We'll now talk about all the signs that can help to know when to pivot or persevere.

How do you know when to pivot your business?

The truth is that it can always feel like time to pivot your business. When you’re galvanized by success stories of companies that made it big doing something different to what they set out to do, there’s a huge temptation to change direction all the time until you hit the jackpot.

But it’s never wise to make rash decisions. If you’re still within your first year, there’s no need to panic. You should pivot only as a last resort, when you’ve really exhausted all avenues with your current strategy.

Here are some genuine signs that it’s time to pivot your business.

1. You've hit a plateau

It can be tough to persevere when you feel that your company isn’t making progress. Sometimes you know you’re putting a lot of work into it, and it just isn’t happening. Hitting a plateau can sometimes be down to boredom or an unmotivated team, but whether it’s low morale or a failing strategy, it might be time to look at a pivot. Taking an honest look at your company can reveal something you could revamp, even if your pivot doesn’t end up being a major change in direction. It could be as simple as changing your revenue model or the positioning of your product.

2. The market isn't responding

If the response to your product has been lukewarm, that usually doesn’t bode well. You can certainly create some hype with marketing and PR, but even then, there’s only so much you can do to convince people of your product’s value. Sometimes, even if your initial customer research is comprehensively positive, the desire to buy isn’t as strong six months down the line when you’re rolling out your MVP. In these cases, it might be time to make a change.

3. You just can't compete

Your idea may seem unique and original at first, but it’s easy to be taken down by a bigger company with a built-in audience and an offering that’s similar to yours, only better. Going up against a huge company or jumping into a saturated market can be quite demoralizing at first. And it’ll soon become clear if this isn’t a battle you can win. Thankfully, there’s still hope in these situations. It could be that one special feature, or a unique business model, could help your product to shine over the others.

4. Your perspective has changed

Your idea may seem unique and original at first, but it’s easy to be taken down by a bigger company with a built-in audience and an offering that’s similar to yours, only better. Going up against a huge company or jumping into a saturated market can be quite demoralizing at first. And it’ll soon become clear if this isn’t a battle you can win. Thankfully, there’s still hope in these situations. It could be that one special feature, or a unique business model, could help your product to shine over the others.

How to pivot your business effectively

If you’ve decided to pivot instead of persevere, you need to execute your pivot in the best way possible. Change can be a resource-gobbler, as well as an emotional liability for your team, so it’s important that you make a smooth transition to the new strategy.

Generally speaking, knowing how to pivot your business effectively is about minimizing the amount of resources that the decision will cost you.

1. Don't waste time

If you’re going to make a fundamental change to your strategy, do it quickly. Pivoting as early as possible reduces the amount of time, energy and resources that go to waste. It’s also easier to get your team aligned and excited about the change if you’re able to put it into action quickly.

2. Salvage as much as you can

Even if your old strategy wasn’t working, or you’ve pivoted a few times before, the likelihood is high that you’ve created useful technology, assets or processes along the way. It’s important to identify what you can salvage from your previous strategy so that you can simply redirect your focus instead of completely starting from scratch.

3. Listen to your customers

Many pivots are data-driven; the result of new insight that has revealed a more profitable opportunity. However, if you don’t listen to your customers you’re probably going to end up pivoting your business again in the near future. Customer feedback is essential to the long-term success of your business.

4. Re-align your goals with your vision

Your vision as an entrepreneur is critically important, not only for you but for all of those working with you. Pivoting can be a great opportunity to revisit the purpose behind your business, and what you set out to bring to the table. Given that change can be difficult for some people, attributing meaning to the pivot in the context of your vision is often more important than it seems.

When should you persevere?

So we’ve discussed what a pivot entails, and how to do it properly. But what about when pivoting your business isn’t the answer?

If you haven’t yet exhausted your current business strategy, it’s probably too soon to pivot. Even if you’re not getting the results you hoped for, giving it more time and some tactical adjustments could be all it needs.

Indeed, persevering should not be seen as the passive or unambitious option. Perseverance is, most certainly, still an active choice. Your product is still developing and changing. The difference is that persevering represents those small changes and updates every day that help you to make progress toward your goals, rather than a paradigm shift.

Persevering means using ongoing build-measure-learn cycles to move the drivers of the business model in the direction of a favorable outcome. You’re still coming up with new ideas every day, but instead of changing the way your business works you’re simply striving to achieve a closer product-market fit.

Here are some signs that you might want to stick out your current strategy a bit longer.

1. You’ve proven your hypothesis

It can be frustrating when you haven’t reached the ambitious growth targets you had set. But if you’ve been able to prove your product’s value in the marketplace and there are signs of it catching on with customers, then pivoting your business could actually break your good momentum. 

2. Your team is specialized

Let’s say your product is aimed at enterprise clients and you’re looking at pivoting to a mass market model. If your team is particularly specialized in enterprise, then you’re taking a much greater risk by pivoting your business. In this case, it might be smarter not to pivot or to reconsider what you are thinking of changing about your strategy.

3. You're misinterpreting failure

Failure is an important part of the journey for every entrepreneur. However, it’s easy to misinterpret your failure or get swayed by vanity metrics into making fundamental changes. If your strategy hasn’t worked like you hoped, it’s important to look at it from all angles as you try to work out what went wrong. The best way to move forward might still be in a parallel direction.

Have courage, but stay rational

Business takes a lot of courage.

It’s easy to find success stories of businesses that pivoted dramatically and found their calling – and many of those entrepreneurs would tell you that they should have pivoted sooner. 

But you should also understand the value of commiting to one strategy and testing it thoroughly before you start thinking about changing direction altogether.

And if you do decide to pivot your business, do everything you can to ensure a smooth and quick transition. That’s what will keep your team motivated and minimize the ‘damage’ of switching strategies.

The question of whether to pivot or persevere comes to all business owners at some point. And making a good decision regarding when to pivot your business strategy can make the critical difference between success and failure.

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