July 25, 2016
Startup founders often believe they have a great idea. They put the stat that 50 percent of startups fail within five years aside because they believe it will never happen to them. However, a pivot strategy is essential because you never know what can happen. You may find starting a business about cashing in structured settlements isn’t for you within six months, for example.
Interpret the Data; Don’t Spin It
Most entrepreneurs are constantly telling people why they have the best product in the world. Sometimes you need to get out of this thinking so you can work out whether there’s something wrong with that product. Part of making a successful startup pivot is understanding that your product isn’t working early enough.
Entrepreneurs often fall to the problem of looking at the data that validates their current course, even if they’re looking at it in isolation. This is a mistake because you could be ignoring the fact sitting in front of the face.
Look at the data as a whole and be honest about your interpretations. If the sales statistics say things aren’t working, you know it’s time to make a change.
Use Introspection Liberally
When hiring remote workers, you may resist completely outsourcing everything because you don’t like change. It’s perfectly natural to avoid introspection because we are resistant to change. Everyone likes to be conservative and they like to maintain the status quo. It keeps everyone comfortable and they don’t have to worry about what’s around the corner.
If we look at human nature, it all makes sense. From a business point of view, this is a threat to your ability to pivot. Sooner or later, though, if you don’t pivot you’re going to be forced to. It could be because of your business collapsing or it could be the complete drying up of sales.
Look inwards regularly. Be honest with yourself and your team. It will make it easier to prepare for a pivot going forward.
Check Your Competitors
Sometimes a company that pivots can pivot into something even worse. There’s little point in trying to be different for the sake of it. Check out your competitors and think about how close they are to you. If you are departing from everyone else in your industry, this is a warning sign.
You can depart from what the rest of the crowd is doing, but you need to make sure people aren’t somewhere else for a reason. If your competitors aren’t offering specific services, there may be a reason for that.
Recognize the Impact of Your Pivot
Startup pivots are always disruptive but they should never be damaging. Think empathy when you’re coming up with your transition plan. Someone is always going to be hit by the business moving in a different direction. Consider the impact and whether it’s worth making that impact. Are you going to get enough of a return?
Team members, for example, could have to undergo further training to perform new functions. Some of them could even lose their jobs because they aren’t qualified for the job at hand.
It’s impossible to avoid all the pain, but you can limit most of it. Be honest about the changes you’re going to make and announce that sacrifices will have to be made as early as you possibly can.
Start Right Now
A lot of entrepreneurs know they have to make changes soon, but they can’t bring themselves to start doing it. When deciding if they want to pivot or persevere they stall and the moment leaves. It can bring your entire business down because if you allow existing problems to remain for too long it can make your company rotten.
Cash and time are both finite resources. You cannot afford to waste them if you want to survive your first year of entrepreneurship, so if your pivot is the right decision you should make that decision today.
How Do You Begin Pivoting?
Once you get started you need to acknowledge there’s no going back. Initiating your startup pivot requires you to just do it. But make sure you’re tracking the data along the way. You never know how a pivot is going to go until you get it over and done with.
Everything is in the data. And even after you’ve completed the transition you need to continue to inspect the data in the weeks and months that come afterwards.
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