When is it time for your business to pivot?

I’m a basketball fan, so let’s start there for today’s thoughts around pivots.

A pivot often happens when a player gets trapped with the ball in their hands. Maybe they thought they were three steps from a dunk, or they were cutting the base line to pop out for a three—regardless, they’re now stuck. They’re likely in an area of the court that is their weakness (three point land for a big guy, for example) or they’re getting hammered by insufferable defense.

The pivot can save the day.

If anyone ever knew how to pivot, it was MJ. Unless we’re talking about his pivot to baseball. That was a failed pivot, but hey, that’s what today’s lesson is all about—live and learn. Don’t forget—Jordan pivoted back into basketball and won the ‘ship three more times.

A pivot is when the player leaves one foot on the ground, and rotates on that foot to find a new view of the court. They’re ultimately looking for a new way to score on this trip to the basket.

This is exactly as it happens in business. Sometimes you need to rotate your view of the landscape to see a new path forward. My company, GoWild, has been through two notable pivots, and dozens of micro adjustments.

The first time we pivoted away from being “Strava for the outdoors” because after a year of pushing it, it was clear our audience had little appetite for it. We scrapped months of development of our internal GPS tracking technology and archery tracking, and bailed on several planned GPS watch apps. 

The second pivot was less about functionality, more about the monetization of the platform. After the pandemic hit, our business model was absolutely decimated. (I won’t go into great details here, because I just wrote about it recently on the GoWild blog.) For four years we had built an advertising machine, and in a matter of weeks, it was dead.

Dead dead. 

In March, advertisers put budgets on hold. They said their ad dollars would be unfrozen in June, but when summer rolled around, they didn’t have inventory. Without inventory, they couldn’t advertise. By August we were reviewing our worst quarter ever with no end in sight.

Something had to change or we’d be instead reviewing our résumés. 

Myth: The pivot is a sign of weakness

You’ve read the book about the company that refused to pivot, right? 

Well, probably not. 

I’ve read dozens upon dozens of books about the companies that made it, and even some that fail, and it seems like most of the ones who survive to become noteworthy have pivoted.

A few pivot examples:

• Walmart started as a Benjamin Franklin craft store.• Nike started as a retailer (not a manufacturer).• YouTube started with dating videos.• Twitter started as a podcasting platform. • Slack started as a video game. • Nintendo sold playing cards for nearly 80 years before getting into video games. • Flickr started as an online role playing game. • Instagram started as Burbn, a location checkin concept. • Suzuki started with weaving looms. • Netflix both rented and sold DVDS (and they loathed the fact they had to stop selling DVDs) before getting into streaming.

x.com and Confinity would eventually merge, becoming the PayPal we all know of today. It wasn’t until a long series of pivots had happened though.

One of my favorite pivots is PayPal. 

PayPal started off as two separate companies, so there is a merger thrown into the mix of starting of all of these pivots:

Mobile bank ⟶ Palm Pilot security provider ⟶ Mobile wallet ⟶ Online password saver ⟶ Cryptographically secure IOU notes ⟶ Processing money from one Palm Pilot to another with the device’s infrared port. 

That last idea was the one that stuck and was the company’s core identity, even through a funding round. The problem? The device technology sucked, and there weren’t that many Palm Pilots. So someone said, “Well, we can have a backup of syncing the payment transaction to your email.”

And with that off-the-cuff remark, you’d think the world changed. 

It didn’t.

Many people on the PayPal team didn’t like this concession that the original idea wasn’t going to work. It felt like losing. In truth, PayPal’s original team’s reception to finding a better way led to one of the best pivots in history. I just recently read the book about the history of PayPal and recommend it if you find this interesting. 

Is it time to pivot?

If you’re working for a startup, let’s be clear—your whole focus is to find traction. Most people at a startup get that, but many founders and early-employees fail to understand what traction means. 

It’s not TikTok views or YouTube subscribers. It’s not email list growth. It’s not news coverage. 

Traction is growth of your meaningful metrics that drive your business model hypothesis. 

A startup’s focus should be to find and—at a slightly later stage—prove out a business model. Too often founders and startup team members are defining traction as launching products, landing content partnerships, starting a podcast, or other ancillary metrics of success. It’s not.

And hey—I’ve been there. God, I’ve so been there. 

When you’re properly tracking your traction, you can really understand if your hypothesis is coming together or not. If you are running or working for a company and can’t really explain what that hypothesis is, let’s first try this:

Write out exactly how your company is creating, delivering and capturing value. Think through the unit economics (cost of the customer, lifetime value of the customer, how many customers you can earn—it’s going to vary wildly from company to company), and ask yourself what needs to happen to make it work. 

If your success depends more on stars aligning than a list of objectives in your control, it may be time to pivot.

This. Is. Not. A. Bad. Thing.

Searches for “Business pivot” on Google

Entrepreneurs are always researching how to pivot, so just know you’re not alone. Exhibit A: This graph shows Google Search volume for “Business Pivot.” Note that the peak over the last 3 years was December 2020, when the PPP money was running out from the last traunch in late May. Source: Google Trends

In fact, the beauty of working at a startup is how quickly you can find success simply by iterating. Startups are lean, scrappy, and know that under each new rock overturned could be the bait we’re going to use to start catching fish. 

If your current efforts are not improving your primary metrics more than 10% month over month, it’s time to start turning some dials. You don’t have to pivot completely, but you should start trying some partial pivots or adjustments to fine tune your approach, assuming you have runway to do so. That’s what we did in 2020 for several months while waiting on that advertising budget to come back. However, six months later it was clear—a hard pivot was in store. 

More than anything from today’s post, I want you to know this:

Pivots are normal. They’re expected in a startup. Just start reading a book about the foundation of any of your favorite tech darlings, and you’ll realize they all go through it. It’s not because they were weak—it’s that they were strong enough to keep going and smart enough to not worry about a conventional definition of a failed idea.

3 steps to deciding if you need to pivot

1) Define the value.

Write down how you’re creating, delivering and capturing value for someone. Or how you plan to do that soon.

2) What are the metrics for success?

What are the unit economics you’ll track to measure success? This can honestly take some time to determine if you’re designing a category.

3) After 30-90 days, how are you measuring against those metrics?

This is a blog post, not a custom consult, but in general just know a startup has to measure much faster than a Fortune 500. 30 days may be too long—you may need to measure in hours, depending on the company. My point here is to make your life revolve around increasing this metric. If you’re giving it hell, and it’s failing to increase past single digit percent growth after 30 - 90 days, it is certainly time for some level of a pivot.

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