Is your startup ready to pivot?

18:32, Mar 27 2013

Over the past decade, the All Blacks have largely dominated international rugby, the odd World Cup catastrophe aside. One of the mantras of New Zealand coaches is that teams should ‘play what’s in front of them’.  

In other words, have a plan, but don't be too regimented. Good teams need to be able to play to the circumstances, adapt to what the opposition is doing and find a way to win.

This follows for new businesses too. In an early stage business, every decision is make or break.  

But rigid adherance to the founder's vision can be dangerous because it's one of the main reasons for failure. Change is often inevitable and the founder must ensure the whole team is mentally prepared to pivot when the need arises.

Founders who can take on board what they learn from market tests and user feedback and then pivot their business to a new idea will survive if their initial plan was wrong.

Those who are wedded to their plan and their founding decisions will not recognise early signs of business failure.


Pivoting is a difficult decision and it takes courage. It's more than simply being nimble or quick to react.  

It can be many things depending on the circumstances facing a business. It may be a change designed to enable testing of a new strategy based on learning derived from earlier feedback.

Pivots can apply to the technology itself, a product subset, customer segments, market verticals or a much more fundamental part of the vision.  

Sometimes pivoting may mean starting an entirely different business or rebuilding the product.  It may mean focusing on only a single feature users want, or changing the sales channel. It can entail rehiring to find the skill sets required to execute the new plan.  

It will certainly require your board and investors to understand the changes and a willingness to back the team.

To pivot effectively, a founder needs to:

1. Have a team accepting and ready for the need to pivot should the need arise.

2. Only pivot when sufficient data has been measured to know what your customers want.

3. Get the board, advisors and investors onside.

4. Reassess the skillset of the team – what skills are missing for the new direction?

5. Look at the whole business, the product or service and work out what you can recycle, what can be repurposed and what needs to be built from scratch.

6. Put in place a solid and comprehensive post-pivot plan.

7. Assess your funding needs for the post-pivot vision.

8. Post-pivot, measure your assumption and verify the data as the learning hasn’t finished there.

9. Ensure the team is ready and willing to pivot again, should it be required.

I have seen many examples of successful companies that have started out as one thing, listened to customers, effectively pivoted and rebuilt a sustainable business.  

In a simple example, we recently turned a company around by moving its focus from a content play to a platform play, allowing others to collaborate and create the content. The new direction appears to be a very sustainable business model.

Often many pivots are required to deliver a sustainable business. How many pivots you will be able to execute will depend on your funding runway and on-going support of investors. 

A film company can become a mobile social network, a bricks and mortar business an online success, a data business a gaming company.

It is all possible - if the founding team is smart enough to read the signals and is prepared to scrap the original plan. 

Andrew Duff is chairman and co-founder of Sparkbox Venture Group.