To Pivot or Not to Pivot: The Complexities, The Risk, The Timing and The Implications

Nearly ubiquitous in the startup mythology today, the pivot is seen as a terrifying moment of make or break, a marker of failure or success.

But +ANDERSEN founder Vidar Andersen sees it differently. He believes that a well-timed, well-considered pivot is a sign of growth and learning. In his chat with curator Janett Egber, he lays out the complexities, risks, timing and implications of pivoting alongside the 5Ws of getting the pivot to work for you.

What is a pivot?

An outspoken proponent of the lean startup methodology, Vidar likes to use author Eric Ries’ defining vision of the pivot: a decision that changes something fundamental in your business model. This, he says, is often confused with the idea of iteration or new product. Coca-cola putting out a new soda product isn’t a pivot, it’s an iteration – an extension to an existing business model. In contrast, IBM shifting from hardware and computers to software is a pivot

Why pivot?

Looking at the pivot through a scientific approach of experimentation and discovery, we can find two main reasons to consider it.

• You have new information that invalidates your previous fundamental assumptions.
• Your have new information that validates fundamental new assumptions.

Where in the process to pivot?

In Vidar’s experience, there are two steps in any development and innovation process where pivoting works best: when you’re still in the testing phase of a new idea, or when a solution isn’t working.

Who makes the pivot call?

Within the context of startups and new entrepreneurs, this decision usually falls within the domain of cofounders and close advisors. In intrapreneurship that can feel less clear cut. But Vidar says it shouldn’t be dramatically different: those leading and owning the project should have the autonomy and authority to implement a pivot within the framework of periodically reporting back to higher management and executives.

And the biggest question of all: When to pivot?

Timing can be a tricky balance, with risks associated to both premature pivots and delayed ones.

The premature pivot is often the result of decisions made based on too few data points or evidence. Perhaps an idea didn’t gather enthusiasm after pitching it to a couple of cubicle mates, or a few people you admire shut it down – so you figure it won’t stick. This mistake, says Vidar, can be proactively countered in a few ways.

Set clear goals and deliverables
Talk to more people – not just friends and colleagues
Talk to the right people – potential customers and users
Get out of the door – and into the marketplace
Get out of your comfort zones.

The delayed pivot, in contrast, means an opportunity lost. Perhaps a competitor beat you to it, or your stakeholders and resources have worn too thin to assure you a proper runway. Either way, you’re at risk of draining your team, losing external interest and maintaining the status quo.

The key, says Vidar, is to listen. Listen to the data, listen to potential customers and listen to the markets.

“What a pivot definitely isn’t, is an excuse to give up when things get hard. If this was so easy, everyone would be doing it.”

How to pivot

While it’s common for both intrapreneurs and entrepreneurs to overestimate the risk of considering a strategic pivot, Vidar says properly tested ideas may be organically flagged as failing by the market before it can damage a brand. Hence the importance of constantly going through short cycles of building, measuring and learning.

Vidar adds that when you experience a failure, you know that something for a fact did not work – and that’s great! Rather than considering failing as catastrophic, failure can be assumed and built into the methodology. Pivoting is sometimes the result of that failure, because that failure has been an essential learning experience.