While pivoting a business can breathe new life into an otherwise failing business, it also means you have to start from scratch and abandon all the investments that you had previously put into your company.
Many startups focus on building their user base first and then determine how they can best monetize that base. For example, Slack started as a gaming company called Tiny Spec, and its team communication app was developed for internal use. The company soon realized its app could be useful for other businesses, and that’s how it pivoted to become one of the most popular team collaboration tools.
If you have been thinking about pivoting your business, then you should know what it entails before you go forward with the move.
What is pivoting?
A pivot means fundamentally changing the direction of a business when you realize the current products or services aren’t meeting the needs of the market. The main goal of a pivot is to help a company improve revenue or survive in the market, but the way you pivot your business can make all the difference.
When is it the right time to pivot?
A pivot is not a magic pill that can solve all your business woes. Companies should only consider pivoting when absolutely necessary. It should be the last resort when all other options have been exhausted.
It may be the right time to pivot your business if:
- You can’t see much progress even after putting in a tremendous amount of money and resources.
- There is just too much competition.
- The company’s progress has plateaued.
- Only one of your company’s features or services gets traction.
- Customers aren’t responding to your products like you thought they would.
- Your perspective about the industry has changed.
Focus on a feature instead of an entire solution.
The key to a successful pivot can be found in one of your product features. No solution can be everything for everyone. The more features you try to introduce into your product at once, the more it will confuse customers and dilute your marketing impact. Instead, take the “less is more” approach with pivoting.
Pick goals that align with your business.
When you pivot your business and change the way your company operates, define new goals that align with your new and pivoted business. Decide on new revenue goals and customer traction numbers. Comparing your business against the same old goals will not give you a clear idea about how your company is doing.
Understand your target audience and their problems.
If your product isn’t selling but you can’t find any problem with it, you might just be selling it to the wrong target audience. You may have a SaaS tool aimed at customers that could be perfect for B2B businesses.
Pivoting your business to sell the product directly to B2B companies can help you improve your sales and traction. In this case, you wouldn’t have to change your product at all. You would only have to pivot your marketing strategy.
Analyze what your competitors are doing.
Before you pivot, look at what your direct competitors are doing and how you can do it better. If you are planning to offer the same products or services as your competitors at around the same price point, you might not be able to see significant results. At the same time, look at how big your competitors are and if your startup can compete with them.
Speak the language of your audience.
Pivoting is often thought of as offering a new product or service. However, this isn’t always the case. Proper messaging is extremely important because even a great idea can go unnoticed if it doesn’t stick with your audience. To fully bring your value out, consider shining a light on an overlooked feature. This new branding may resonate much more with your target audience than your messaging highlighting your main feature.
Strategize before you make a move.
There are numerous ways to pivot your business, so make sure everyone in your company is aware and on board with the pivot before you make any major changes. Test your product pivot, and create a thorough pivoting strategy that aligns with all the core departments of your company before execution.