Welcome to the fourteenth of our Entrepreneurial Wednesdays series. In this series, I share my thoughts on lean entrepreneurship as I take my first steps in my journey. I will be sharing my lessons learned with you.
Frequent readers have now been exposed to a lot of words and phrases used in the startup industry. Pivot is one of them and we have already discussed pivoting quite in depth. But when it comes to pivots there is a lot to talk about. This article is going to point out and describe the many forms of pivoting.
The first type of pivot is one which I have already mentioned but I will gladly write some more about it. ”Zoom-in pivot” takes what has previously been a feature in the older MVP and makes the feature itself the main product. This happens when the consumers show particular interest in one feature and the demand and use of the feature are so big that they result in the creation of a new product based on this feature.
The complete opposite is the ”Zoom-out pivot”. Obviously, this pivot occurs when a single feature, that should have been the product is simply not enough and doesn’t attract the demand. With this pivot the feature will become a part of the many features in the new product.
A larger pivot could easily be ”Customer Segment pivot”. In this case, the company has already validated that the product really solves problems for consumers. They know the results and they have answered their hypothesis. Only, the company realized its product solves problems in a different segment than it originally was supposed to. This is quite common among startupers but can be avoided by studying the archetype of the customer and experimenting.
Another pivot closely connected to customers is ”Customer Need pivot”. As I have just mentioned, knowing your customer better than your shoes is a way to avoid unnecessary trouble. Even if your product really solves your customer’s problems it might happen that the demand is still not as you want it to be. This is because the problem your product solves is not so crucial in the eyes of the customer. This is when the product has to be adjusted, so that it solves the pains that make the consumer feel most uncomfortable. Sometimes a small change of a feature is enough. Other times a new product has to be developed.
A unique type of pivoting is ”Platform pivot”. This simply means transferring from application on a platform or vice versa. Sometimes it might happen that a startups has created an application for their own platform but they eventually realize that the platform has been used by third parties. The course of action here is not that important, but the fact that many startups had to go through this is worth mentioning.
Pivoting as an art
A very complex type of pivoting might be ”Business Architecture Pivot”. When it comes to pivoting with this approach, the company tries to go from high profits and small production to lower profits but really high production (in this case it could mean joining the mass market). Some other companies which targeted wide audience change and focus on longer and more costly sales cycles.
To me, the most fascinating type of a pivot is ”Value Capture pivot”. This one is focusing on the change in the way the company gets paid for the value it serves to the customer. Surprising or not, this can bring a lot of change in market and product strategy. A nice thought is to imagine monetizing as a separate feature that can be added or erased whenever you want to.
With the problems with growth comes the need to change. This can be done with ”Engine of Growth pivot”. With this type of pivoting the company tries to change its strategy towards growth for a more faster or profitable solution. Sometimes, but not necessarily, in order to be successful with this pivot you also have to adjust the form of paying for the value (”Value Capture pivot”).
Different types of goods and services require different distribution channels. When such a situation occurs many companies have to consider ”Channel pivot”. This pivot comes with the knowledge of other, more efficient, less costly ways of how to get the product to the customer. The Internet has the largest impact on this pivot when it came with a dominant effectivity.
When something goes wrong, it still can go right
Startups are thought to be by most of the people technological companies. Many times startups find themselves developing a completely new technology as they originally wanted to. This was probably because of ”Technology pivot”. Through the course of time, company can realize that it can solve customer’s pain and problems more efficiently (for both). A new technology brings a new wave of innovation. The segment of customer remains the same, what changes is the technology which can either offer a better price or performance.
As you already know, pivoting is a chapter of its own. There is a lot of room for experimenting and that means that there will be probably new information about pivoting when this article comes out. The art of pivoting is complex, sometimes stressful, but in the end it can result into unexpectedly positive change.