You probably have seen me mentioning pivoting in some of my articles and might not be privy to what it’s all about. Today that’s the sole focus of my article since pivoting is important for startups especially in the time we are living now. You must appreciate that after you have conceived a business idea, implementing it will at times present to you new insights far-removed from your initial forecasts. Pivoting then connotes redefining your business’ value proposition to reflect the new-found insights.
Pivoting Explained Further
Time passes from conception of an idea to its actual implementation. You might find your initial idea failing to hit the ground running as you anticipated. This might mean that a lot happened in the time that elapses which eroded the potency of some of the insights you had based your ideas on. This all might be an indicator that you have to relook at your initial value proposition.
Think of the analogy of a mountain climber for a moment.
If you have seen one in action you’ll notice how they use an anchor or support at one stage and as they ascend they no longer need that anchor so they move it to a new position. That’s the whole essence of pivoting – you’re regularly making assessments and using them to redefine your business strategy. A practical example is Facebook; did you know that at its conception it was meant to be a dating site at college level? However, from customer feedback (direct or indirect) after implementation, it became apparent it was bigger than that and the trajectory had to be redefined.
Pivoting is quite prevalent and recurrent during the formative stages of a startup as you will still be trying to make sense of the market and what you’re offering. Pivoting is quite central to the scalability of a business – proper pivoting opens up and boosts revenue inflows. Also note that pivoting isn’t an event, it’s an iterative process that must be done regularly. However, don’t just pivot because you’ve heard from me that you must. You must think critically and be strategic because at times there is no need to pivot and your efforts to pivot might backfire.
Pivots are regular and iterative adjustments or alterations that you do in a pursuit to marry evolving customer expectations with what you’re offering. Examples of pivots are changing a feature into a product (or vice versa) or changing target market focus.
Tell-Tale Signs It’s Time To Pivot
There are certain things which when they start occurring then chances are high that pivoting is necessary. The moment you note that you are seriously trailing behind your rivals or being outrun by customer needs then it’s time. Other indicators are prolonged stunted growth where you seem to keep hitting a sales volume brick wall. At times you can even realize that sales are now dwindling no matter the efforts put in; the hype for your brand will be waning. Sometimes you can notice that customers seem more glued to only a part of your whole product offering. If you see that damage control, as opposed to value offering, has become the mainstay of your business then pivoting is now necessary. These are just some of the tell-tale signs but they are reflective of the vast spectrum of possible scenarios that can serve as indicators.
3 Areas To Look At
Focus On Part(s) Of The Whole
Many surveys have shown that in most cases the real money might be tied to just a part of your whole product or service. If you pay close attention and redirect more effort to the most active part(s) you will increase your revenue. An example is Instagram; when it was first introduced (as Burbn) it was focusing on various components. As times went on it was realized that the photo-sharing component was the most popularly used. Efforts and resources were then placed on that aspect more and that’s what gave birth to the Instagram success story. All this suggests that you must be abreast with all details regarding your customers’ behaviours – that’s where the answer lies.
The Target Market
I’ve touched a bit on this earlier; when you start out you have a particular niche you want to target. Due to the rapidly-changing nature of the marketplace and consumer behaviours, niches can change over time. Pay close attention to the market dynamics in relation to your value proposition. Sometimes you might have to alter your value proposition to appeal to a particular niche. Sometimes you might have to change your niche for your value proposition to be appreciated.
Rethink The Revenue Model
A key driver in pivoting is studying your competition closely. In entrepreneurship, you want to ensure that what you are offering is raking in substantial revenue despite the competition. One way to outsmart your competition is your revenue model. Your revenue model is a major determinant of your price tag – which must drive customer traffic to your brand. So from time to time and with an empirical basis on insights from your financials, customer behaviours and your competition’s strategy you might have to adjust revenue models or price tags to stay ahead.
Due to the economic uncertainty and the continued use of tech innovations the business environment is now highly volatile. It’s said that change is a constant of life and as a business, you must always stay in the loop. That’s why it’s important to ensure that your products or services are scalable and forward compatible. The business environment will continue to be fast-paced and so if you are going to stay winning you must effectively pivot as and when need be. Be keenly wary of your timing and execution approach when you pivot lest you create more problems in the process.