A pivot is a fundamental change of direction for a business based on what you have learned from the market. The team realizes that its first hypothesis was wrong, but it does not throw away what it built and learned; it puts that to use on a new path.
What can change#
- Customer: for example, from selling to families to selling to businesses.
- Problem: solving a different problem that the team saw was more painful.
- Revenue model: moving from one-time sales to subscriptions or commissions.
- Product: focusing on a single feature that users use more.
Example#
A team builds an app for ordering home-cooked food. After a few months, it sees that small restaurants are more enthusiastic about the order management tool than families are. The team decides to focus on that management tool. This is a pivot.
When is it needed?#
When several rounds of testing and adjusting have not improved growth or user retention. The decision should be based on data and conversations with customers, not on frustration or fatigue.
Common misconception#
A pivot does not mean failure or abandoning everything. Nor is every small change of color or price a pivot. A pivot is a change in one of the core components of the business model.