To Pivot, Or Not To Pivot

At the recent Startup Lessons Learned conference in San Francisco I learned a new buzzword for a very old concept. When a startup company discards Plan A and moves on to Plan B, it is called a “pivot.”

Pivoting has some nuanced meaning that differentiates it from simply changing directions. Pivoting is a seek-the-light strategy and it is not seen as fixing a problem. What you were doing might have been good, but what you pivot to do will be better. In fact, a startup that doesn’t pivot can be suspected of rigidity.

When I started my first company way back in 1975, I did contract programming. That lasted less than six months when I pivoted to building turnkey accounting systems. Before I had delivered my first (and only) turnkey accounting system, I had pivoted to just selling the software without the system. Each new business model was better than the last.

When a mature company changes its business model, there are costs associated with it, not the least of which is the dislocation to its people, who were probably very comfortable doing what they used to do. In a small, young startup, the costs are insignificant, and there are few if any extra, comfortable people to be dislocated.

Some people have expressed their doubts about the methods espoused at the SLL conference, and some are surprised to find me enthusiastic about them. But it’s important to understand that it isn’t a one-size-fits-all world. In a four-person web startup it isn’t unreasonable to pivot once a month. In a four-thousand-person mid-size manufacturing company it is insane. Just because methods work, it doesn’t mean that they work everywhere.

Overall, the SLL conference wasn’t so much about entrepreneuring as it was a celebration of today’s incredible web-based entrepreneuring environment. The barriers to entry today are so low that they approach zero.

When the cost to play the startup game is next to nothing, the cost of making mistakes is tiny, too, as is the cost to pivot. Therefore, there is little pressure to be correct or even to have a good idea. You can just keep having and trying ideas at little or no cost, and eventually one of them will be good enough for you to build a business. You can pivot your way to success instead of tediously crafting your way there.

The interesting point to ponder is whether this current web-based startup environment will be around more than a couple of years. Is it a brief anomaly, or is it the new business-as-usual? And should you be pivoting towards it? Should I?

4 Comments

Bob MacNeal
Pivot is indeed a new buzzword. When I hear the word Pivot, I see kids dancing the Hokey-Pokey. Pivoting is like the iterative numerical methods we used in college programming. You’d start with a seed values, chunk along for a bit, and then check your convergence. With enough constraints, convergence was almost a lock. Occasionally an anomaly would unravel your code into memory-sucking divergence, but hopefully you programmed a check for that condition before you smoked your 256KB. One of the things I heard from Eric Ries is the term Shadow Beliefs. These are the closely held, somewhat notional beliefs and assumptions that frequently sink good-intentioned entrepreneurs. All of us fall somewhere in the continuum of delusion, particularly those under the spell of a great startup idea. One shadow belief is We know what the customer wants. You, and Cooper, are leaders in discovering what users want. You guys make a living finding that out better than most. Another shadow belief is Advancing the plan is progress. This is an indictment of dogmatically Agile teams that harkens back to the Discovery vs. Delivery discussions from Code Freeze 09. David Hussman tweeted, "If you don't know where you are going, it's easy to iteratively not get there". This shadow belief is an even bigger pothole for startups. As always, I appreciate your insights.
Michael Peachey
Pivot is typically discussed in the context of the startup, in contrast to large organizations. I think the concept of the Pivot, as presented by Eric Ries, is also useful in the context of the larger enterprise. Pivot is a nice concise way to describe a change in direction. In a startup world, the Pivot can be thought of as a sequence of steps in a jazz improv dance. But Pivot is not just limited to the startup world. Pivot is also a nice tool for conveying a sense of plan and smooth well-orchestrated execution, rather than just a reaction to new information or new thinking. To extend the metaphor, the dance can be formal and planned, like a waltz. Especially in a large company, the appetite of the organization for change, and the readiness for the next step can't be rushed. The visionary can have a good sense of the upcoming steps, even if not all is revealed to the audience initially. For example, while running General Interface in the early 2000's, we would redirect (or at least re-validate) our efforts, business plan, priorities, etc. on a quarterly basis, responding to new information and insight in a nascent and quickly evolving RIA market. But, even after GI's acquisition by a much larger company in 2004, the same strategies work very well internally. Our PeopleForms product for example is evolving iteratively, with each milestone release allowing us to collect feedback that informs the next step in the ad-hoc dance. At the same time, as PeopleForms represents a disruptive product approach in the larger organization, the team must execute a series of planned Pivots, the waltz, in order to gently walk the larger organization forward down a new path. Ries' Pivot concept works well in both dances. Michael Peachey TIBCO UX
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