July 3, 2017
Running a business can be a constant struggle. The moment you open your doors, every decision you make from that point forward is critical. You may find pockets of opportunity for growth or suffer a total collapse with a single mistake.
The cold hard truth about startups is that failure is just as likely to occur as success. Regardless of industry, roughly 50 percent of all new businesses fall apart within 4 years. And if you recently suffered a cyber-attack, there’s a 60 percent chance that you’ll be out of business in six months. According to CB Insights, pivot-related events are amongst the most common reasons for startup death – pertaining to companies that failed to pivot when needed, and pivoted without a comprehensive strategy.
A pivot describes any fundamental change in a company’s business model. Although pivoting may lead to catastrophic results, it could also be the key to accelerating business growth. To make sure it’s the latter, below are the top 3 pivoting tips you need to remember:
Use the Pivot Pyramid
The pivot pyramid is a guideline that can help startups spot pivot opportunities. It identifies five key pivot areas that leads to growth:
- Customers – Business decisions always start with your customers. Your product idea, pricing strategy, distribution – everything must resonate with your customers for sustainable growth. Pivoting here occurs when you choose to change your customer segment.
- Problem – Markets in business are made when you identify your target customers and find the problems they’re trying to solve. Startups can pivot here by seeking a problem that’s more impactful to customers.
- Solution – After pinpointing the problem, the next step is to build a solution and package it into a product or service. Pivoting here means looking for alternative solutions or improving existing ones.
- Technology – The technology surrounding a solution also gives room to plenty of pivot opportunities. This typically involves upgrading the infrastructure for better performance, security, delivery, and efficiency.
- Growth – Lastly, the top of the pivot pyramid encompasses all growth strategies – primarily in marketing and advertising.
Remember that changing a component in the pivot pyramid changes everything else above it. For example, since Customers is at the base of the pyramid, pivoting in this area also affects all the other components. Pivots in Technology, on the other hand, should only affect Growth strategies.
Start Within the Organization
When it comes to pivots, you can never go wrong by focusing on much-needed improvements within the company. Bringing in younger leaders, for example, may help you stay in tune with the millennial workforce and markets.
The key here is to listen not only to your consumers, but to every member of your organization. Forward-thinking companies should always be open to frontiers that can improve workplace productivity and culture – from automation to relocation. Just remember to be ROI-oriented and leverage tools that can help you make calculated decisions and measure results.
Go With the Flow
A great way to minimize risk in pivoting is to follow the general direction of the competition. Through observation, you should be able to tell which markets, technologies, or strategies are currently being pursued. If you set these as boundaries, then you can easily avoid costly pivot failures.
Of course, staying within your comfort zone means you may miss some opportunities for gaining a unique competitive advantage. It may also go against the other tips mentioned above. But if you prefer slow and steady over quick and risky, then it should be a tradeoff you’re willing to make.
Read more about business tips on TechCo
Did you like this article?
Get more delivered to your inbox just like it!