Have you ever heard of Odeo? No?
It started out as a podcast network, but as iTunes began to take over this niche, the founders sensed its looming demise. In this make or break moment of uncertainty, the company pivoted to the idea of a status-updating micro-blog platform using 140 characters or less.
You may know it better as Twitter.
A company tends to pivot when it realizes that one facet of its project is more successful than the others. It’s intuitive, really. Why waste energy building X when everyone is paying attention to Y? No matter the reason, a pivot strips a project down to its necessities and allows for rebirth. Missing this pivot window, however, can take a detrimental toll on your business.
It’s Time to Pivot
A fatal mistake many businesses make is the inability to sense when it’s time to pivot.
Take Imercive, for example. The startup waited too long to pivot and didn’t set realistic expectations of its business model. This left the company without the time or funds to enact a new strategy, and it had to close its doors. This is just one example of why it’s critical to know what signs indicate it’s time to pivot.
Here are three key signs that may signify it’s time for a change:
- Loss of interest: If you’ve lost sight of your initial goal or fallen out of love with the idea you came up with in the first place, it’s time to try something new. Sometimes, the juice isn’t worth the squeeze.
- Overwhelming interest: An eruption of interest pertaining to a particular feature is a telltale sign that it’s time to pivot. Think about Flickr. It was conceived as a game, but people only cared to use it as a photo database. So Flickr reassessed its initial plan and revamped itself as a simple, brilliant photo database.
- An overgrown idea: When your project becomes hard to navigate, you need to pivot so you can keep it under control. Trim your project’s fat and zero in on what stands out about it.
After you’ve evaluated whether or not it’s time to alter your business model, you need to ask yourself the right questions: What are you trying to sell? Who is the business targeted toward, and where is that demographic? Why do they need your product and when are they using it? How do you plan to get it into their hands?
These are basic business model questions, and knowing the answers is essential to a successful pivot. If the answers aren’t flying off your tongue, you need to take some time to step back and look at the bigger picture.
A Smooth and Successful Pivot
When you get a handle on the scope of what you want your project to do, you can begin focusing on having an organized mind and open ears. Here are some tips to help your pivot run smoothly and successfully:
- Stay organized. More often than not, businesses that are preparing for a pivot tend to dive head first without checking the water. Get your thoughts in order and create a business model that develops organically. This will prevent you from overdoing it and give you time to make adjustments if need be.
- Listen to your users. If your business is a bus; you’re the driver, your users are the passengers, and the pivot is the destination. Don’t take your passengers somewhere you think they want to go. Take them somewhere you know they want to go.
- Keep investors in the loop. The last thing you want is the wolf of Wall Street hunting you down because you switched from selling styling gel to blogging about celebrity fashion trends without warning. In keeping with the bus metaphor, your investors are the gas. You need them (and their money) to reach your goal.
- Talk to your team. Make sure your team is on board with the pivot, and get their feedback. You hired an eclectic group of rock stars, so take advantage of that by holding brainstorming sessions to come up with new ideas or innovations that could turn your pivoting business into the next titan of industry.
Pivoting is tricky — but not because it’s impossible. What ends up being the most difficult is having the mental fortitude to change. Be aware of your customers and find out what they like about your project. Then, gauge whether you and your team still have a passion for the project. Stay attentive to your business model by not letting your ideas run wild. If you can do that, you’ll have no problem determining whether it’s time to pivot — or making your pivot a success.
Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launchedStartupCollective, a free virtual mentorship program.