In his (now classic) book, The Lean Startup, Eric Reis defines a pivot as a course correction in order to test a new fundamental hypothesis.
For example, let’s say that you launch a taco customization and delivery service and once you’re up and running, you discover that very few people are willing to pay for taco customization.
Rather than continuing to offer taco customization and hoping that people will start to want it, you form a new hypothesis, such as: people will pay for the delivery of tacos, but they see no need for customization and the additional cost involved. You pivot. You change the direction of the company to emphasize the delivery service, and maybe even drop the idea of customization all together.
A major risk to the successful ability of a company to pivot is the feeling of investment that people involved with the startup may feel. To use the taco customization example; that was someone’s dream. And they spent months building and perfecting it. To just dump that part of the company can feel like throwing away all that work.
The thing to remember is that you’re not throwing it all away. It wasn’t for nothing. You gained valuable insight and learned something. Namely, you learned that no one will pay for taco customization and that it is not a good strategy for getting you where you want to be (to success, however you define it).
This strategy can be applied to so many aspects of our personal lives and our businesses. It’s particularly important for a company that is just starting to figure out what it is, where it’s going, and whether where it’s going is where you want it to be.
Look at a pivot as a new beginning rather than the end of anything. A failure to pivot when necessary will absolutely mean the end of your startup.
Move on, knowing that the work had to be done in order to prove that the original hypothesis was no good. What would be foolish is to continue to spend time and money on a bad hypothesis for any longer than necessary to prove that it’s wrong.