MaRS Library Pivots: Part 1 | Why is pivoting important?
This is the lost section from The Growth Hacker’s Guide to the Galaxy. Mark Hayes and I wrote that book a few years back and went deep down a rabbit hole on the topic of pivoting. Before long, we had too much pivoting content and it got cut from the final manuscript. Now it rises like a phoenix from the ashes as a seven-part blog series. Make sure you stick around until Part 7—it promises to raise some eyebrows.
Pivoting: Setting the record straight
Pivoting, as you may know, is a bit of a buzzword among startup founders.
You don’t have to spend too long at an entrepreneur meetup group before you’re bombarded by people telling you of their plans to “pivot.”
So, odds are, you’re familiar with the term.
But do you know what it actually means to pivot?
More importantly, do you know whether or not you should be pivoting right now?
Pivoting now has a variety of connotations and definitions because so many people misuse the term. For many entrepreneurs, the concept of pivoting can be scary and confusing.
After all, plenty think that it’s something done out of desperation because things are going horribly wrong with a company—almost like an admission of devastating failure.
However, others think that it’s a way to take their startup to the next level.
Our aim with this multi-part series is to set the record straight on pivoting.
A short overview: Why and how businesses become monster successes
The most successful businesses in the world are often those that have found a way to truly meet the needs of their customers.
Such businesses are often regarded as companies that achieved something known as “product–market fit.”
If you want to build a successful enduring company, achieving product–market fit should be at the top of your agenda.
And who doesn’t want a successful enduring company, right?
Now, figuring out how to meet the needs of your customers isn’t always obvious, especially if you’re a startup.
In fact, going through process of finding a product–market fit is often what kills most startups.
That’s because the process can be drawn out and incredibly tough to get through.
For the most part, founders run out of money or willpower.
But going through this process is vital because it’s the very thing that will ensure you have a successful business.
Pivoting is an instrumental part of creating a scenario in which your business is fully and successfully meeting the needs of your customers.
You could say that pivoting is the process of finding product–market fit.
And if you ever feel overwhelmed by the idea of pivoting, just remember that at its very core, it’s simply the process of achieving a greater level of product–market fit.
What is a pivot?
The word pivot gets used a lot and so its definition can be hard to nail down.
We’ve put a lot of thought into what pivoting is. This is a definition that we think is true to the concept:
Essentially, when you make a large and almost always fundamental change in the way your business works, that’s a pivot.
This could include changing the way you serve your market, or serving an altogether different market. While it can include changing your business model, pivoting can often require you do more than just that.
All in all, the goal of pivoting is to create a scenario wherein your company achieves a greater level of product–market fit, in the name of increasing company growth.
We’ll cover this in more detail later, but when product–market fit exists, there is massive alignment between the way you serve the marketplace and what the marketplace actually wants.
When you can do that, you’ll have a successful, profitable business on your hands. Pivoting allows a company to reach that coveted scenario.
Pivoting ≠ Growth hacking
It’s worth mentioning that pivoting is different than growth hacking.
For the most part, growth hacking involves challenging assumptions related to your marketplace. This is so that you can increase the popularity and engagement of your current solution within its current marketplace—e.g., how you can get more people to download your app or visit your website.
Growth hacking can sound fun, but you don’t want to growth hack a mediocre company that just barely meets the needs of your customers.
Pivoting, on the other hand, is about challenging the assumptions that you have about the entire marketplace and the customers and end users.
With pivoting, you’re questioning what the actual needs of the customers are and the ways in which you think you should be serving customers, so that you can best meet their needs.
The good thing is that, as a startup founder, you may already have all the skills needed to pivot effectively.
That’s because you’ve probably had to do some growth hacking in your time.
And, as mentioned above, growth hacking is all about adopting a scientific mindset that’ll help you challenge assumptions so that you can find a better way to grow your business.
And challenging your assumptions in order to find a better way of doing things is an instrumental part of pivoting. After all, a startup is essentially a bunch of assumptions.
Next in this series
In Part 2, we will talk about product–market fit and why it’s the be-all and end-all for startups.
The series so far
Pivots: Part 2 | The search for product–market fit
Pivots: Part 3 | Why most startups fail at finding product–market fit
Pivots: Part 4 | Some pivoting myths
Pivots: Part 5 | Pivoting: Case studies (PayPal, Flickr & YouTube)
- Business valuation: How investors determine the value of your business.
- Social purpose business (SPB) models.
- Venture capital: Financing a startup in the later stage of company development.
- Best practices: Working with a board of directors.
- Product development: Product strategy and the whole product.