Achieving and maintaining success with a startup in the long run is challenging, which is why it’s rare to see them last for longer than 5 years. Statistically, 90% of them won’t live to see their sixth year, which means there need to be survival strategies in place for any startup. This is where pivoting comes into play. Pivoting is when a startup diverts or expands its target audience and niche, catering to a new or additional group of potential customers under the same company name.
Startups can pivot in several different scenarios. Either it is to expand the business to explore new horizons, or, if the main niche isn’t working too well, it’s used as a drug of last resort to save the business. Both can be rewarding, but can also be disastrous if not done properly. Turns out, this particular reason ends up being the angel of death for 10% of startups!
Pivoting itself is mostly used as a solution for a problem, but bad pivots create their own problems. Some popular reasons for startup pivoting are;
• It’s been going nowhere for years
• Not being able to catch up with industry sales
• Decreasing market value
• Lack of funds to carry things on as they are
• A competitor is consistently beating your performance
Pivoting needs to be an extremely calculated affair, where lots of thought and research goes into it before any step is taken. Any changes to the business model due to the planned pivot must be made only after accounting for the effects they may have, as they may eventually corrode businesses. Test hypotheses and measure the potential results, and only move forward with it if the reward is worth the risk.