Entrepreneurs are very often stubborn. When starting a business, they’re confident about their idea to succeed. However, during the business journey challenges arise and if the idea of pivoting enters the picture, most entrepreneurs take a reactive approach.
As entrepreneurs ourselves, at Linkilaw we know first hand that changing the initial idea of a business is complex. But it can happen and it has to be seen as part of the journey – there’s no reason to see it as something negative.
For those who are not familiar with this term, pivoting is essentially a shift in business strategy to test a new approach after receiving direct or indirect feedback, and it’s one of the fundamental concepts of the lean startup methodology.
But even being aware that this is the best approach for the business, most founders struggle when there’s a call to pivot.
Why is Pivoting so hard for entrepreneurs?
Society in general conditions us not to be a “quitter” so it’s natural for entrepreneurs that the first thought regarding pivoting is fear of being branded as a failure.
On the entrepreneurial community, the relationship with failure needs to change but definitely needs to change with the term of perseverance too. Being persistent is a key aspect for success but there’s a fine line between this and waking up day after day and grinding away at something that isn’t working.
The remedy for this thinking shift has to be accomplished through honesty. It’s about facing that the initial “great idea” wasn’t actually so great but as a result, you can move into a better idea. No need to feel bad, it’s something that you can feel proud about.
Pivoting is a natural evolution in business
Almost everyone who’s started a company has a story about the time that company became a different company. The entrepreneurial world is always on the move so your business should be able to do the same.
The most common reasons that make a business pivot are the following:
- Market trends: change is inevitable so when new directions hit the industry you have two options: stick with your idea or embrace change. Well known international companies, for example Nokia, have failed when disruptions on their industry happened and they thought their idea was so good they were not going to be affected.
- Competitors: competition inside an industry is good for business performance. But you have to adapt and improvise when facing intense competition to stand out and become the leader.
- Customer-centered pivots: when you get customer’s feedback about more products and services that they would love to buy from you.
- Business is not working: revenue and customers are dropping and the only way out is to change direction.
Twitter is an example of a successful pivoting. This platform began life as Odeo, a podcasting platform. But once Itunes emerged, it consumed the market and left Odeo obsolete. That’s when Jack Dorsey, brainstorming new directions to the business, came up with a concept around sharing your status or what you were doing at the time. The rest is history.
Netflix case is not a strict pivot but is interesting to point out as it’s an example of business open to constant evolution. Netflix started out as a mail-order DVD service, evolved to downloadable films, then to streaming films, and then as it identified the risk of the film studios licensing their content to other streaming services, started to develop its own films, TV shows and documentaries.
But observing these examples, is important to remark that pivoting is a decision that has to be made thoroughly. It’s not about changing every time new ideas arise or a challenge is presented but making the decision if the business is at risk and you have a clear direction to pivot to.
At Linkilaw, in order to succeed in this major change, we strongly recommend that your businesses legal foundations are on point and that you get legal advice from a senior lawyer before jumping into it.
Book a call with our legal team and we’ll guide you through every stage of your legal needs.