We hear a lot about ‘Pivots’ these days. The word has become a buzzword in the startup world and worked its way into everyday language, but what is a pivot exactly?
Eric Ries first applied the term ‘pivot’ to startups in his book, The Lean Startup. A pivot is not just changing the product strategy but also includes a change in customer segment, channels, revenue model, resources, activities, costs, partners, and customer acquisition.
Imagine a situation where you’ve figured out the right process, you have the right team in place, your customers are happy and you’re making money, would you still change things? The shiny penny is an easy distraction to choose but you cannot ignore the external factors that can change the game. Here are the reasons why pivots are crucial to business these days.
- Change is the new black.
A business pivot isn’t easy. Just a few short years ago, apps such as Twitter or Instagram were flying under the radar, and now they’re industry icons. It’s important to be dynamic, which means studying new things, keeping an eye on trends in the industry and pivoting accordingly. Pivoting allows for a new perspective on how the company would grow further.
- New opportunities.
Pivoting can be a great way to add revenue, but a strategic pivot requires goals that are based on market realities. One should first analyse what’s working and what’s not, explore new markets and products or services, do a good amount of research and then decide. Pivoting can be one of the best steps to build on the foundation a business already has.
- Being dynamic
Business is all about trying new things, taking calculative risks, moving forward and analysing results. It is about finding a problem and solving it. A company may realise that its A service is no longer in demand, unlike B service which is. Pivot towards the more relevant service. It’s not necessary to follow every new trend in the market but it’s important to adjust to your audience and then rework your strategies to grow your business. All businesses must evolve if they want to stay for long.
The pivot can be applied to any element of a business model without changing the vision of the business. At the end of the day, adapting to changing trends is the key to survival.