What is a Pivot?
A Pivot is a fundamental change in one or more core components of a startup’s business strategy, product offering, or growth engine. It is not a minor adjustment; it is a major strategic course correction undertaken when validated learning shows the current trajectory is unsustainable.
The concept was popularized by Eric Ries's The Lean Startup methodology, which views a pivot as a necessary act of learning, not a failure.
Why Startups Pivot The decision to pivot is always driven by data indicating that the initial business hypothesis is wrong. Key indicators include high customer churn, an unscalable customer acquisition cost (CAC), or a complete lack of product-market fit (PMF).
Types of Pivots Pivots can happen at any level of the business:
- Customer Segment Pivot: Changing the target market entirely (e.g., selling B2B software to small businesses instead of enterprises).
- Zoom-In Pivot: Taking a single feature of the original product and making it the entire product (e.g., Slack started as an internal tool for a gaming company).
- Business Architecture Pivot: Changing the business model (e.g., moving from a B2C freemium model to a B2B enterprise subscription).
Pivot vs. Failure A successful pivot is a hallmark of founder resilience and adaptability. It demonstrates that the team prioritizes evidence over ego. Investors are far more impressed by a team that recognized a dead end and successfully changed course than one that continued to throw money at a flawed strategy.
Key Takeaway: A pivot is a data-driven choice to pursue a new path. It means you learned something important and are smart enough to change.
