The world of small business is fraught with challenges that make it necessary to assume a flexible and versatile model in order to survive. Sometimes, it can seem like an uphill battle just trying to keep your startup afloat, but when times get tough, is calling it quits your only option?
Businesses like Facebook, YouTube, and Groupon would indicate that giving up hope isn’t the way to go, but instead, a pointed, planned, and precise redirection of your business may be exactly what you need instead of razing it to the ground.
Find out if you should pivot, when you should do it, and how to go about it in this post.
What Does it Mean to Pivot?
When a business pivots, it means that they make a decision to change course in order to make room for industry trends, growing and shrinking markets, and new opportunities.
Pivoting a business can mean anything from a small change like adding a new type of license to your subscription model, or rebranding your business entirely to take on a new market. Whether you decide to take a slight detour, or do a complete 360 depends on your business and your goals.
Almost all businesses pivot at some point. Facebook, for example, has pivoted multiple times; from making a mobile app to cater to smartphone users, to increasing their marketability for businesses using the platform as a way to advertise and interact with customers. Both initiatives allowed them to expand their target market to new areas, generating more users and more income.
It could even be said that without pivoting, Facebook would not be the social media behemoth that it is today, which proves that even highly popular and successful businesses still recognize the need to fluctuate with changing markets.
When Should I Pivot?
Strategic pivoting can be undertaken in a variety of circumstances, not just when you discover a weakness in your business. Smart founders are constantly on the lookout for new ways to expand and grow in the long-term.
Your small business might be ready to take on a change if:
- Your target market is shrinking.
- There are changes in product demand.
- Your production costs are too high.
- An aspect of your business is performing unexpectedly well.
- New innovations have changed the market.
- A competitor ups their game.
Before you decide to shift your business model, make sure that it is a viable option for you. Identify the weakness or opportunity that you want to target, and determine the scope of the project; is it something that you can phase into over time, or is it a major overhaul that will require significant work?
Remember that just because you have a reason to pivot, it doesn’t mean that that’s the right choice for you or your business. If you notice weaknesses in multiple areas of your business, such as a lack of financing, loss of passion, or low market demand, it may be a sign that your startup is failing.
Why Should I Pivot?
Businesses need to be fluid in order to grow with changing industries and markets. Not many people know that Twitter started as Odeo, which was a platform where users could search and subscribe to podcasts.
Their decision to pivot was based on iTunes popularity in the podcast market. If they hadn’t changed their platform, they may have continued as a small competitor to iTunes, but it is unlikely that they would have reached the success they experience today.
You don’t always have to change your entire business to do well. Yelp started out as a reviewing service where friends could email each other recommendation requests. After seeing how users interacted with the platform, they made it what it is today—an online review site that that gleans over 50 million users each month.
Any business that plans to operate in the long-term is going to have to shift at some point, since most markets are anything but stagnant and competition can be fierce. Pivoting doesn’t only need to be used as a way to innovate your business, but it can be used to enhance it as well. Don’t think of pivoting as something you should only do if your business is in trouble, embrace it as a way to grow over time in order to continue to stay top of mind with your customers.
How do I Pivot?
Pivoting can take on a variety of forms. Since it is specific to your business, what move you choose to make depends on you and your target market.
Some of the basic ways to pivot include things like:
- Implementing an online presence through a website and social media pages.
- Adding a new product or service.
- Creating a mobile app.
- Altering your pricing model (for example, moving to a freemium model).
- Experimenting with add-ons.
- Partnering with other businesses.
- Exploring adding a physical aspect (like a brick-and-mortar store).
To figure out which route your business should take, start with determining the weakness or opportunity that you want to take advantage of. After you have discovered where you have room to grow, put a lot of time into research. Talk to your users and customers, ask for feedback, and run tests.
Look into industry trends, and market predictions from experts. Analyze your competitors and other businesses that use whatever strategy you are hoping to adopt. Combine this information to learn whether or not you should forge ahead, or re-evaluate once more.
Pivoting is only a good idea if you do it properly. Without really understanding your direction, you’ll end up blindly thrashing through a path in the dark, hoping that you’ll eventually reach your destination.
To Pivot, or Not to Pivot
Ultimately, the decision to either call it quits or shift your business into new territory is in your hands. While success is never guaranteed with any business endeavour, you can help your chances by ensuring that you have the information you need to back up your decision.
Pivoting is an excellent way to ensure long-term viability and durability in a market that values fluidity and flexibility, so make sure to take advantage of it when you see an opportunity to do so.
What was your latest pivot?