Nowadays, “Differentiate or die” can be transformed into “Pivot or die” for some startups. The problem with so many small businesses failing to grow is an inability to be agile and change their strategy when the time comes.
Nowadays, “Differentiate or die” can be transformed into “Pivot or die” for some startups. The problem with so many small businesses failing to grow is an inability to be agile and change their strategy when the time comes. But when is the right time for a startup to pivot? What’s more, should every startup do this or not?
As statistics prove, not pivoting can become deadly for 7% of overall young businesses, while doing it wrong can cause a failure of 10%. In this article, we will consider when and how to pivot a startup correctly.
Have a look at this short checklist which will prompt you it’s time to reimagine your strategy:
Let’s study these signs in detail.
If you don’t get new users or the existing ones don’t show they really like your product or services, consider reshaping your approach. Analyze what are the reasons: maybe, you haven’t studied your target audience before launch, or you don’t understand your niche quite well, or whatever. Be sure to give up on the initial business idea if you find out there’s no actual market demand for your software or services.
We mean not scaling and expansion to other cities, countries, etc. We mean your actual revenue and sales cycles. In case you are investing more in business development than getting profit, think about how your sales processes, new customers acquisition, or retention of your return customers can be enhanced. If you feel it’s a dead-end, then it’s high time to pivot your software startup.
Have you analyzed your direct competitors and understood you are lagging behind them? What’s worse, you can’t do anything to outperform them? You know what to do.
Of course, you can try to improve your product or services, for example, implement new features, introduce a more flexible pricing policy, readjust marketing strategy. But sometimes conquering another market with a different offer is a much better idea.
You may have perfect negotiation skills, but your potential (or even existing) investors may not share your excitement about your product. If you notice that you count every cent, maybe, the way out is to change your direction and pivot your startup?
It’s absolutely okay to understand that you don’t want to be engaged in this particular business anymore. No further explanations needed, I guess.
Now that we’ve identified the problems that can make you change your business model, let’s check how to go through this process smoothly.
This list can be extended, but its main point is that even some of the most famous profitable brands started as something different. Take them as an example and don’t be afraid to pivot your startup when you see the new opportunities for its development.
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