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Instagram wasn’t always Instagram as we know it — meaning it didn’t start as an application dedicated to photo-sharing. The platform, as it currently exists, was born out of a service called Burbn: a location-based check-in app.

After noticing the popularity of its photo-sharing capabilities, relative to its other features, Burbn’s leadership stripped the application of virtually every other aspect; focusing exclusively on its photo, comment, and like functions. The business ultimately rebranded and became Instagram: the photo-sharing giant we know today.

The route the company took, turning Burbn into Instagram, was an example of something called a pivot. Let’s get some perspective on what a pivot is and how, when, and why startups should consider conducting one.

The Startup Pivot

A startup pivot occurs when a company shifts its business strategy to accommodate changes in its industry, customer preferences, or any other factor that impacts its bottom line. It’s essentially the process of a startup translating direct or indirect feedback into a change in its business model.

Drastic pivots like Instagram’s are the ones you tend to hear about, but not every pivot is a fundamental change to an entire company. Startups don’t always have the need or resources to pull something that radical off. In many cases, a company will only have a single problem that needs to be addressed.

A pivot could be anything from changing how a product is manufactured to shifting marketing efforts to appeal to new buyer personas. The term is relatively fluid, but it always entails a change in a startup’s business strategy, generally dictated by factors beyond its control.

When, why, and how to pivot a startup

1. One piece really stands out

Sometimes, a single feature of your product, service, or business model will perform considerably better than the others around it. If that’s the case for your company, explore the possibility of pivoting to support that single aspect exclusively. Your goal is to be as efficient as you can be — to work smarter and get the best possible returns for your effort.
Trimming as much fat from your business operations is one of the best ways to streamline production and, in turn, extract more value out of the time and capital you invest in your company. If you can identify a single feature of your product or service that your customers enjoy or leverage more than others, consider pivoting and building around it.

2. The business isn’t financially viable

Startups founders often have sentimental stakes in their businesses. Founding a startup is a matter of having both a new idea and the motivation to see to it that it’s realized. That makes that pursuit inherently personal. Despite what it might mean to you personally, a business can only go so far as its capital lets it. If your company is running out of money, you’ll need to jump ship from the idea or processes behind it and pivot to something more financially viable.
Take an honest, objective look at your business — without accommodation or emotion — and see where you could be doing better. See what you can strip back, which aspects are burdening you financially, and where you might be able to go with the resources you have on hand. Use that information to identify a reference point for your pivot.

3. The market didn’t respond the way you’d anticipated

The prospect of getting your product or service to market is exciting. It’s a moment of truth, but you always have to account for the fact that the truth might hurt. Maybe, People won’t be moved by your messaging. Maybe, you’ll overestimate the scale of the problem your product or service addresses. Or maybe, your target audience just won’t be willing to pay what you’re charging.

Any case where your product or service doesn’t resonate with consumers like you thought it would is cause for a pivot. One way or another, you have to change your business model to convey better value to your target audience.

Take strides to generate interest in your solution. That could mean lowering your price, focusing on further developing certain features, or changing your target market. Ultimately, you have to make consumers see your business in a new light.

4. You’re consistently being outperformed by the competition

The startup realm is a dog eat dog world. You’re always going to be pitted against some kind of competition. If other companies are absolutely dominating your space — taking up business you need or confining you to a niche you’re unhappy with — it’s probably time for a pivot.

Your industry might be crowded. There could be too many companies in it to claim a significant enough portion of the market. Or, a single company could have a definitive grasp on your target audience. In both of these cases, you’ll need to differentiate yourself. That means pivoting.

In this case, your pivot is going to be drastic. You’ll need to radically alter your company and how it operates. You might have to change your product or service, cater your messaging to a new audience, or completely alter your sales strategy.

Pivoting to challenge your competition is a matter of becoming different — different from your competitors and different from your business as you know it.

5. You just want something different

Say your startup has been operating for a while now, and you’re becoming unhappy with the trajectory your business is on. Your perspective and goals might have shifted. You might have developed new values as your business has grown. Maybe, a lucrative niche you could appeal to might be emerging.

In any of those cases, some kind of pivot is a viable option. But be careful — this particular reason for pivoting is the trickiest to navigate. If your business is doing well, it could be risky to make a radical shift. Still, as a business owner, it’s up to you to decide how your company operates. Do what you feel is right — whether that be a matter of your vision, morals, finances, or all three.
Pivoting your startup isn’t a decision to take lightly. No matter what you choose to do, it’s going to take considerable effort on your end. It’s a tough call to make. It means being honest with yourself and any employees you might have about how you do business.
Pivoting is a humbling process. It’s a matter of swallowing your pride, understanding where your business is heading, and deciding on a potentially drastic course of action. Still, if your business is radically underperforming or flat-out dead in the water, some kind of pivot is the way to go.

Pivoting can be hugely rewarding if done well, but it’s also difficult, especially if you’re close the business and it feels like “your baby”. If you’d like an experienced pair of eyes to review your thinking, then get in touch.

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