“If you do not change direction, you may end up where you are heading.” - Lao Tzu
This week YC released a video with some of their group partner’s favourite pivot stories.
It’s a great video, but one thing that was missing for me was the detail on how you should decide to pivot.
The message of the video was simple. Pivoting can be necessary and it can lead to success.
But from the perspective of a founder leading a startup, it’s often non-obvious what the right decision is.
The question is, what are the conditions under which you might want to pivot? What are the signs you might look for? How should you decide?
Pivot or persevere?
Let’s get to it 🚀
What is pivoting?
“Pivoting is one of these words that people use all the time that means a lot of different things so I just like to say changing your startup idea. If you are not making something people want you need to change your idea or your startup will fail” - Dalton Caldwell
A startup begins with an idea, a hypothesis about the world. As it comes into contact with reality (customer feedback), that hypothesis will evolve.
This is all good and expected. Taking on customer feedback and iterating towards something that customers love is a proven strategy to reach product market fit.
Its the search algorithm to find the right version of your idea.
But if you are pushing on your idea for a decent amount of time and it isn’t working, pivoting might be better than continuing to push against a closed door.
When to pivot
This is a critical point for your company, and its a decision that only you can take.
But here are a few signs you should look for if you are thinking about pivoting.
Your morale is at rock bottom
“The right idea is a ‘hell yes’” - Gary Tan
You feel burned out by the direction you are going. Even though you have been giving it everything you have, you and your cofounder feel out of gas.
The everyday stresses of running a company feel unmanageable.
If your heart doesn’t feel in it any more, it’s time to think about pivoting.
You are out of ideas
“The only way your going to find a real market and a real problem to solve is in direct contact with users” - Gary Tan
You have launched your product, and have been trying to get users for weeks or perhaps months, but it feels like nothing is working.
Momentum is everything in a startup. So if you are struggling to get customers to use your product, and you are running out of ideas for how to change that, it might be time to pivot.
There are many reasons you may consider pivoting, but perhaps the main one is when you feel you are at the end of the road - if you can’t see a way forward.
Your north star metric hasn’t moved.
“When things are not working, its obvious you should do something else. Its that grey area, where you are maybe making some money but its maybe not repeatable that it becomes tricky to figure out whether I should pivot or not” - Aaron Epstein
You should always have a main metric/KPI that you are working towards, your ‘north star’ metric. That could be revenue or users or something else. But probably revenue or users.
(If you don’t have some metric like this, you won’t know if you are making progress. So choose one if you don’t have one already)1.
If your north star metric isn’t moving for weeks/months despite your efforts, that’s a sign you should consider pivoting.
You realise you aren’t the right person to work on the idea
“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” ~ Steve Jobs
You might start down a path, before realising that you are not well suited to the business you are in.
When you start a company, you don’t have to be an expert in the market you are in. If you aren’t an expert when you start, and you don’t have the motivation to become one, you are likely not the right person for this idea.
Maybe you discover you don’t like the type of people you are selling to, or you secretly find the product boring. These are signs you might want to do something else.
How to avoid pivot hell
‘Pivot hell’ is one of these memes that YC has invented to describe a situation where a startup pivots too frequently. There are many reasons founders get in this position, but one classic case is when a technical founder is comfortable building, but doesn’t know how to sell.
So they do the ‘easy’ thing for them which is to keep building different products. If you keep pivoting but never really focus on one idea, its unlikely you will manage to get traction.
Two suggestions to avoid this;
Be comfortable with uncertainty
“Cultivate comfort with uncertainty and impermanence” - Justin Gary
You have to be ok with not knowing how things will turn out. Accept every idea is imperfect. Every market has pro’s and con’s. There will always be challenges.
It will always be difficult to build a startup.
Feel sure you have given this idea a ‘proper go’
Only you can know whether you have given this product direction your all. If you feel like there is more in you, that you haven’t really explored all the options, maybe ask yourself why you want to pivot?
Are you just trying to avoid some uncomfortable task (sales?), and building something new feels more exciting?
Is the desire to pivot driven by business reasons or something else?
Most people take too long to pivot
YC partner Dalton Caldwell thinks if anything people take too long to pivot. This can be because of sunk cost fallacy - you feel you have spent so much time building this product, you don’t want to feel like you have wasted a bunch of time and/or money.
It can also be that you have a small number of users already, so you feel like you don’t want to give up on them. If those users aren’t paying you, or they are churning at a really high rate, or there is just not enough of them to make a big company, these are all signs that maybe you should change direction.
This is probably the hardest case - ,when you do actually have some users, but you don’t think you are at product market fit.
The decision to pivot is always difficult, and as Dalton said in the video, it’s a decision that only you can take.
And even though there are many times that pivoting can work for a company, there are likely just as many times when pivoting didn’t work out. Or there are times when a company thought about pivoting, but instead pushed on with their original idea and were successful.
The decision is more art than science.
There is no correct answer, only the answer that works for you and your company.
But remember if you do pivot, this is giving you another shot on goal.
And more shots on goal gives you more opportunities to succeed. Track your key metrics, and adapt rather than die.
I hope you found this useful.
Until next time,
Jamie
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