What Is Pivoting in Business?

While pivoting in the startup industry entails switching to a new strategy, it is frequently misunderstood to mean completely overhauling the company. This isn't always the case, though. Often, a business only has one major issue that has to be addressed, and only one part of the business needs to be improved.

This is what startups need to take note of. Many startups focus on growing their user base before determining how to best monetize that population. While pivoting might give a failing company a new vitality, it does require the company to start over and give up all its past investment. If you've been considering pivoting your business, you should understand what it includes before taking the plunge.

What Is Pivoting?

Pivoting is far more complicated in the context of startups, and it can have far-reaching consequences. Pivoting is when you make a modification or adjustment in your startup belief or practice. It's an important aspect of the lean startup technique. To put it simply, it refers to a shift of direction.

Pivoting becomes a critical element of the process when you're building quickly, trying out their minimum viable product (MVP) on test markets, and getting feedback from the ecosystem or customers. In practice, a pivot is more than just an abrupt and drastic shift in perspective. Pivots can include changing your target market, adopting a different technology for your platform, or having one aspect of an MVP becomes the exact product you were trying to develop originally.

You might be thinking that this sounds like a recipe for failure. It could be seen as such in some ways. When you get feedback and decide to make a change, it's because the service, product, or technology you're working with isn't perfect. As pivoting appears to be an unavoidable part of the startup world, it's probably preferable to think of it in a positive light and approach it (if and when it happens) with a good attitude.

When Is The Right Time To Pivot?

Not every business will flourish, but it doesn't mean that first failures will sentence your company to a life of failure. Many firms that fail at first prosper later as a result of a well-executed pivot that restructured their objectives and put them back on track to success. Knowing when to pivot, on the other hand, is frequently easier said than done, and many business owners are hesitant to make changes because they don't know when to act.

Only One Feature Stands Out

If only one component of your business is successful while the others are failing or progressing slowly, it may be time to focus on what is working while changing, possibly significantly, or altogether abandoning what isn't. Your company can experience a gain in productivity, efficiency, and revenue by focusing on what works, depending on the strategy you use.

Lack of Market Respondents

It's exciting to think about getting your product or service to market. It's a moment of truth, but you must always consider the possibility that the truth will hurt. People may not be moved by your message. Perhaps you'll exaggerate the scope of the issue your product or service solves. Or perhaps your target audience will just refuse to pay the price you've set.

Any time your product or service fails to resonate with customers as you expected, it's time to pivot. In order to provide higher value to your target audience, you must improve your business strategy in some way. Make an effort to attract people's interest in your answer. That could mean lowering your price, concentrating on specific features, or shifting your target market. You must persuade them to see your company in a new light.

Your Business Is Not Financially Stable

Founders of startups frequently have sentimental attachments to their companies. Having both a novel concept and the will to follow it through is all it takes to start a business. Regardless of what it means to you personally, a company can only go as far as its cash will allow. If your business is losing money, you'll need to abandon the concept or processes that underpin it and pivot to something more financially sustainable.

Take a cold, hard look at your company – without any apologies or emotions — and discover where you can improve. Examine what you can cut down on, which parts are costing you money, and where you might be able to go with the resources you already have.

Understanding Your Target Audience And What They Want

If your product isn't selling but you can't figure out why it's possible that you're targeting the wrong demographic. You might have a customer-facing SaaS application that would be ideal for B2B companies. Changing your company model to sell directly to B2B businesses will help you increase sales and traction. In this situation, you wouldn't need to make any changes to your product. All you'd have to do is change your marketing plan. 

The video below summarises when would be the right time to pivot your startup/business and how.

How To Pivot Effectively?

Though the years 2020 and 2021 will bring significant changes to our lives and businesses, the concept of pivoting is not new. In fact, your company should have a core strategy as well as backup plans in place to ensure that it can withstand any storm. Pivoting is a strategy for increasing your company's resilience so that it can continue to serve customers, employ people, and provide you with a living for years to come.

Here are a few tips for creating a robust business strategy that allows you to pivot when necessary.

  • Do it as quickly as possible. Many businesses pivot multiple times, so don't give up on the startup life if you fear you'll have to pivot a few times to get your business back on track. If you're going to pivot, whether it's once, twice, or several times, you should do so as soon as possible to prevent losing time, effort, and money.
  • Repositioning. When you're searching for a company strategy pivot, you can take one of two approaches. Either maintain the old business while launching a new branded service or products, another approach would be to close down the old business and start a new one. The option you choose is determined by your cash flow scenario. You may want to preserve your heritage business if it is successful and has a steady stream of clients.
  • Considering new markets. Most organizations that pivoted and thrived in the past year had recently begun to reach out to new clients or had recently expanded into new markets. Finding new markets and clientele is a terrific strategy to make your business model more resilient. You don't want your company to be reliant on a single type of customer or distributor. Consider what sectors and markets you've considered but weren't convinced about in the past. Take some time to investigate those regions and make contact with them. You might have the answer they've been looking for.
  • Pay attention to your clients. The input you receive from clients is an excellent indicator of whether or not you should pivot. While some negative feedback is to be expected, if you're regularly hearing things like "too pricey," "not enough features," "the purchasing process is too complicated," "there are other, better products out there," or something similar, you could be ready for a pivot.
  • Make sure your pivot offers room for expansion. For a startup that has hit a stumbling block, pivoting can be a wise move. However, if you pivot your firm in a new direction without giving it much thought, there's a good chance you'll reach another roadblock, albeit one with a different set of circumstances. To avoid this, make sure you evaluate not simply pivoting from your initial path, but also the potential for development and expansion that your new path offers. If the market is too tiny, the customer base is too diversified, or there is too much competition, it is not worth the risk of launching a new business.

Pivoting During the Pandemic

Even in the best of times, corporate leaders understand that they must adjust their organisations. That's just how people react to shifting markets. The COVID-19 pandemic, on the other hand, has offered a new, extremely brutal pivot-or-die scenario. Executives and entrepreneurs who want their companies to succeed in the future should look at some key examples of how other companies have done it.

There are three factors that must be met in order for a pivot to be successful. Three factors must be met for a corporation to pivot successfully, according to Mauro Guillén in a Harvard Business Review article. The pivot must be able to:

  • Align the company with at least one trend that the pandemic started or worsened (e.g., remote work).
  • Extend the company's current capabilities in a way that reinforces the company's original strategic objective, and
  • Provide a long-term route to profitability that maintains/increases brand value in the minds of customers.

To achieve these goals in a competitive manner, corporate executives must be acutely aware of existing short-term conditions and resources. However, it is also necessary to evaluate larger prospects that can have a long-term impact on the brand's reputation and operation.

COVID-19 will not be around indefinitely. However, because it challenges startup/business owners and CEOs to pivot as they've never done before, it's beneficial and inspiring to watch established businesses make the required changes and learn from their tactics, allowing them to remain open even in these trying times. In that case, we can follow their lead, overcome current obstacles, and have a far better future.

Example of Companies that Successfully Pivoted

The Covid-19 closure prompted a near-instantaneous economic downturn that has wreaked havoc on both large and small businesses. It is also said that our way of life is in jeopardy. As a result, the only way to survive is for the company to undergo a complete overhaul – or file for bankruptcy.

The reality of how businesses are dealing with the crisis and planning for recovery tells a completely different picture, one of pivoting to business models that promote short-term survival while also fostering long-term resilience and growth. Pivoting is a lateral shift that generates enough value for both the client and the company to benefit from. Here are some companies that pivoted their company and came out successful at the other end.


The Swedish firm sought to locate a turning point that would allow it to overcome a fundamental problem: Unlike Apple Music, Spotify relies heavily on free users who are forced to listen to commercials. Prior to the pandemic, the firm expected ad income to increase even faster than the free user base, contributing significantly to the bottom line. Although the model had already begun to show signs of maturity, its flaws were not easily obvious until the pandemic struck and advertisers' budgets were curtailed. In response, Spotify began to offer original material in the form of podcasts. In just one month, the platform saw artists and users post over 150,000 podcasts, and it has inked exclusive podcast arrangements with celebrities and begun curating playlists. Spotify could become more of a tastemaker as a result of its new strategy.


Now one of the most popular professional chat and messaging systems began with a quite different premise. Between 2009 and 2012, Tiny Speck and Stewart Butterfield made a strange but somehow popular video game called Glitch. Their game emphasized sociability and exploration rather than fighting monsters or solving riddles. The game was popular, but it wasn't profitable, so the team decided to focus their efforts on a new product: a workplace messaging app.


Shopify’s founders didn’t pivot by coming up with a new idea but rather selling an idea they’d already had -- but used for a different purpose. Back in 2004, Tobias Lutke, Daniel Weinand and Scott Lake attempted to open their own online snowboard equipment store, called Snowdevil. They didn’t like any e-commerce products on the market, so instead, they built their own. The shop wasn’t successful at all, but they loved the storefront they built, so they decided to sell it to other businesses that needed a better online store.

Conclusion: Pivoting in Business

Every startup journey should carefully undertake a SWOT analysis, sticking to the vision and goals with which the enterprise was founded while also remaining adaptable and exploring options for improvement and inculcation.

Pivoting can be scary as it remains a mystery and does not provide a 100 percent success rate at your first attempt. You may encounter several little pivots, a few large pivots, or a combination of the two during your business search. Take solace in the idea that every startup has pivoted and will continue to pivot in the future. You will not just survive, but thrive as an entrepreneur if you give yourself time to think through changes and pivot with intention and passion.


When Is The Right Time To Pivot?

How to Pivot Effectively?

Different Types of Pivots

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