Today, a popular view of a successful entrepreneur is someone with a vision, clearly defined goals and most importantly, the determination to avoid any obstacle they come across. These are obviously some of the most crucial traits you need to possess in order to succeed. However, none of these characteristics can guarantee you success.
That’s why you need to brace yourself on time. Sometimes, your initial business model will simply stop working and you will have to quickly find away to survive.
In other words, every startup needs to have a plan B that will help them adapt their products or services to both their customers and current requirements of the market, if needed. This is called pivoting. Unfortunately, even though one is supposed to try and make rational business decisions, choosing to pivot is often quite emotional. At the beginning, most startups have a clear idea of what they are going to be all about. Because of this, shifting to another plan often feels like giving up on their initial dreams.
However, when it comes to your startup pivot, you need to keep only one thing in mind. Today, it’s more of an obligation than a matter of choice. The only thing that really matters is how fast you will actually pivot. After all, we’ve already mentioned that approximately 15-20% of startups pivot from their original business plan in the first few months. So here are 5 rules you need to follow to ensure that your pivoting is not a failure.
1. Make a Flexible Business Plan
For any business to succeed, its foundations need to be solid. This means that, prior to engaging with the target market, you will need a reliable business plan. Such plan is usually based on months of research, data gathering and careful contemplation. As all of this is strictly theoretical, once the real work starts, unexpected things are bound to happen.
Your analysis might prophesize that one particular product might be a huge success, but then again, when it comes to the actual retail, its sales might significantly plummet. On the other hand, you may find great return value where you are least expecting it. The most important thing here is that, even though you should stick to your plan, nothing is written in stone. You shouldn’t be afraid to change the plan if the circumstances dictate it.
2. Never Look Back
Shifting from one plan to another is definitely one of the greatest challenges your business may encounter. However, one of the most common mistakes startups make is not fighting the uneasy feeling that they might have done something wrong. Of course, there should be a time for a debate among the members of your team before making the final decision. But, once you’ve taken a new path, you should never regret it. Only by focusing on your new ideas and goals will you be able to make all the necessary adjustments and keep up with them effectively. Remember that, if things were ideal in the first place, you wouldn’t have had to change them.
3. Always Bring your Customers on Board
Pivoting your business is certainly a highly decisive time for your company. However, you should never underestimate the influence of your customers on it. After all, if it doesn’t address your customers’ needs, your product will soon be dead. Precisely because of this, once you start moving to your plan B, you should always make sure that your current customers are involved in this entire process. This way, your customers’ opinion will be an immensely valuable asset when it comes to conducting a third- party validation and case studies. On the other hand, by providing your target audience with an opportunity to weigh in and assess your new offers, you’re ensuring a built-in sales channel once the product goes live.
4. Zooming in and out Might Ensure your Success on the Market
As it was already mentioned, some tend to perceive pivoting as focus-shifting. Still, the situation is not always so extreme. Usually, instead of changing focus, simple zooming in or out is enough.
For example, during the first few months, you may realize that one particular feature of your services (or one particular product) performs much better on the market. Allocating most of your startup’s resources to this one feature is called zoom-in pivoting. There are many famous companies that resorted to this method, including Flickr, Instagram and Tagged.
On the other hand, the complete opposite of this method may take place, as well. While narrow industry-specific service that a startup provides may not be as popular amongst their target demographic, expanding their line of work so that it encompasses a wider range of services might be a good business move. For example, this is what Facebook did. Namely, before becoming one of the most famous social networks ever, it was the platform comparing photos of two people, asking the user to identify which one was “hotter.” Compared to what it represents today, this seems pretty ridiculous, right? Obviously, this is the classic example of what is called zoom-out pivoting.
5. Redefine your Market
We already discussed changing your service so that it meets the needs of the market. However, sometimes, it is more efficient to simply change the market itself. If your product has troubles with sales, it might not be because something is wrong with it. On the contrary, it might just be that you’re trying to sell it to the wrong people. In fact, according to Genome Compass of San Francisco, “founders who change products and markets between one and three times raise more money than those who don’t.”
This, as a matter of fact, has nothing to do with the size of the business or with the scope of the product. Even some of the world’s largest conglomerates resorted to this strategy on several occasions. For example, in 2010, NFL decided to reach out to their female viewers. Even though there has always been a belief that football is predominantly male thing, recent statistics show that women make up 40% of all NFL viewers. Once they decided to invest $10 million in a campaign that included clothing line, they were bound for success.
Another great example is Harley-Davidson, which made a similar decision. Traditionally, Business Insider described their target demographic as “older, white guys.” In order to broaden their scope, the company started to promote motorcycles with lower seats, which are better suited for female drivers. Because of this, today, 10% of all their customers are women.
Examples of this are numerous and they are not always gender-related, as was proven by Mountain Dew when they started targeting urban population from 18 to 24 years. Oftentimes, some of the best business moves can be learned by emulating the top dogs.
Eric Ries’ definition explains this phenomenon the best, in only one sentence:
A pivot is a structured course correction designed to test a new fundamental hypothesis about the product, strategy and engine of growth.
Maybe pivot is scary. Maybe it proves to you that you were wrong about at least several segments of your business. Still, it saves you from sitting helplessly in a chronically leaking boat of your own mistakes and enables you to redirect your company towards faster growth and success.