When to Pivot: 6 Signs for Startups
It is often said that change is the only constant, and it holds even for businesses. Entrepreneurs start with set plans, but situations do not always go as planned. There are too many variables involved in ensuring a startup’s success, and most of them are generally not in an entrepreneur’s control, such as the market conditions.
But this does not always mean shutting down. Sometimes all that is required is a new strategy and a fresh approach to the business, known as a pivot. Most businesses need small or big pivots at different points in time because of unexpected hurdles and challenges. Just like everything else, companies and products have a lifecycle. But by pivoting at the right time, you can save yourself from becoming obsolete.
Pivoting can be a great strategic move, but how does a startup know when it is ready for a pivot? Here are a few signs to check.
The competition is outshining you
There are competitors in every field, but in order for you to make a mark, you need to have clear differentiators that can be recognized by your target audience. It is also possible that over time, your offerings and technology have become outdated such that others have overtaken you quite comfortably.
In cases like these, it is good to consider pivoting to something new or different where you will be in an advantageous position. If you do not beat your competitors, you will not be able to establish a strong market position and build a sustainable company. You can find a niche in the existing market or enter a completely new one depending on your resources.
The growth has become stagnant
It is not uncommon for companies to hit a plateau where their growth comes to a halt. If the demand is going down, and customers ask for something entirely different from you, take it as a sign to pivot. If you face operational inefficiencies and plans to scale up are not working in your favor, it is your next hint to move on.
Your customers need to feel motivated to buy from you constantly. You need to bring in innovative ideas to continue to engage key stakeholders. If your numbers tell you that your growth is marginal or even negative consistently, go back to the drawing board and work on a pivot strategy.
A couple of products steal the limelight
Most startups offer a variety of products and services that appeal to different segments of the target market. However, if you see that only one or two of them are making all the money for you, it might be time to shift your focus. You may have built the perfect product for a certain segment and can cash on that opportunity by exploiting it more. That can make for a good pivot.
However, the very opposite can also happen, and your star products can stop making revenue. This means that the things that you were doing right before are not working anymore. This again indicates that it is time to shake things up and pivot from your current model. It is worth putting in time and effort where you will actually reap the rewards.
The market has changed
Market changes can be abrupt or slow, but either way is quite obvious. Economic cycles, preferences, and expectations are a few external factors that change how the market operates. Such changes are enough to make your research, products, and services redundant. Even if you evaluated a few hundred customers who agreed to buy your product after it launched, nobody could show up at your doorstep.
When there are changes in the market, it is best to consider a pivot because time can run out fast. You can only survive for so long in a market where you are no longer relevant. Investing some time in research can help you unearth other possible opportunities for the same target market or a whole new one. It is not worth settling for a tepid response.
You can sense a lack of enthusiasm
Whether you talk about employees or customers, they all need to feel good about being associated with your startup. You can start with great hype and watch it all fizzle out over time, making your hard work go to waste. When you see such a lack of enthusiasm within your team or in your interactions with customers, it is time to pivot.
Discuss matters with your team to see how the culture can be improved so that employees are willing to give their best efforts in promoting the products. Head out to talk to your customers and ask them what they feel is lacking. Only by such active interaction will you be able to identify gaps and carve out a better strategy that will help you grow.
Your goals don’t align with your vision anymore
Entrepreneurs are the backbone of the startup, and it is their vision that they want to see coming to life. Over time, it is quite probable that the goals and vision will change, and the business will not seem as appealing anymore in its current form. A small pivot can help put things back on track for entrepreneurs.
When you sense that your startup is not what you quite had in mind, and you would like to do things differently, it is good to trust that voice and make the changes. Without goals to work towards that truly align with your vision, you will sooner or later burnout. Be committed to reinvigorating your startup by giving it a better direction.
Bottomline
Making a pivot can be daunting, but you can make the best decision for yourself as an entrepreneur. There are many success stories to look at where companies have refocused and witnessed incredible growth. The key is to take the step sooner than later when you still have the resources and firepower.
It is also not necessary that one pivot will be enough. You may need to do so multiple times because so much can change over time. Perseverance is great but only in the right direction.
