Entrepreneurs seem to have the stubbornness or self-confidence to fail, dust themselves off and try again. The idea that a company can and should fail, but fail rapidly and re-adjust their trajectory as needed, commonly known as “pivoting” is a further manifestation of this entrepreneurial spirit. It is a founder-friendly concept that is key to the lean startup methodology. It is in the best interest of all stakeholders to allow and sometimes encourage pivoting to occur. If a startup can recognize early on that they need to re-adjust, they have a much better shot of recovering from initial setbacks, but this approach does come with some risks.
The term “pivot” seems to get thrown around with increasing regularity during discussions of lean startups. “How did they pivot,” “Why did they pivot,” “How many times did they pivot,” “What is a different pivot that they could have executed on,” and the list goes on. In some sense, it seems like there is a notion within the ecosystem that pivoting is a requirement to be a lean startup.
However, I feel that this misconception is a dangerous one. While pivoting may be appropriate in some situations, it is certainly better to avoid it, if at all possible. Relying on the ability to pivot, often at the expense of developing a compelling initial product vision does not come without consequences.
Potential entrepreneurs need to find the right balance between having a great initial product vision and being responsive to the customer feedback. Too much of either is dangerous, but the appropriate mix of both appears to be a solid recipe for success that allows rapid market entry and customer adoption that also shortens the time from product development to monetization.
A few of the benefits and risks of both product vision and pivoting are:
Again, this is not an either or scenario, in my opinion. The initial product visioning exercises should be coupled with the ability to rapidly prototype and pivot as needed based on customer feedback. At the end of the day, the product visioning feeds into the rapid prototyping and product development. As with other processes, if you put garbage in, you will mostly get garbage out. If you get garbage out, you then often need to pivot, so being thoughtful of the input is still very important. Entrepreneurs should not get too caught up in the lean startup methodology and forget the value of a developing a good initial product vision based on their understanding of the market and the perceived customer needs.
There are many examples of companies that have executed pivots before finding the right product market fit, and they have been successful. Groupon is a good example that was able to pivot from the original idea to a successful product that achieved significant customer adoption. One certainly can’t argue with the results they have achieved. In this case, pivoting worked out.
But again, pivoting is not a requirement. For example, from the inception of the idea, to the present day, RentJuice has largely maintained its course. RentJuice is a SaaS provider to apartment rental brokers attempting to facilitate improved workflows and information management. They have certainly refined the product over time and listened to customer needs, but they have not necessarily executed a wholesale pivot because they have not needed to. The customer feedback that they received has been largely positive. This is a good thing. The founders initially had a deep understanding of the rental market and the existing pains within that market which drove their initial product vision. They were accurate in their assessment of the customer needs and developed a product that addressed those needs, in large part.
In many cases, nailing the initial product vision can often serve as a competitive advantage. Things change so rapidly in the consumer internet space and with the network effects associated with many emerging platforms, the first mover advantage is critical. Pivots, while useful in addressing the market, can actually be detrimental if it allows competitors to either catch up or get a lead on you as you take the time to continue learning and re-working the product.
It is not a requirement that a lean startup executes a pivot. Entrepreneurs have that option, but it should be considered just that; an option. Be wary of relying on that option too much because with every Groupon, there are a number of others who have continued to spin their wheels searching for a product market fit, with limited success. The company will be in a stronger position if it understands customer needs and develops a product right off the bat that addresses them, saving time to market and shortening the time from product development to monetization, which is the ultimate goal.
It is reassuring that entrepreneurs are now being given even more leeway to try, fail rapidly, and pivot their business accordingly. Just because you have the leeway to fail, doesn’t necessarily mean that you should want to fail. Nailing the initial product vision and being right, still remains a good thing that often provides a competitive advantage.
Don’t lose sight of that.