I was sitting on the plane yesterday when an entrepreneur asked me, “Should I pivot or keep going.” It was one of those questions that gave me pause. My first thought was, “This question is impossible to answer without more information.” It’s kind of like asking me, “Should I add more salt to the soup,” without having tasted it or knowing how much you had already put in. And at the same time, after years of starting, running and advising companies, it feels like a question with an obvious answer – “It depends on whether or not there is a market for what you’re selling.”
I began to reflect on times when I successfully pivoted. At my startup, we were offering an application that would monitor belongings for safety recalls and send an email alert to consumers. All caveats aside, the bottom line is, it didn’t sell. We later learned that home inspectors would pay for the software in order to offer safety checks on products such as appliances in newly purchased homes. Pivoting was a no-brainer – service providers were already using our b2c software in ways it wasn’t intended in order to solve a problem we hadn’t thought to address. A few tweaks made the system work as a b2b2c product, and we found ourselves serving a new market.
While that worked for us, a pivot isnt always the answer. When deciding whether or not to pivot, it ultimately comes down to which path will lead you to your goals in the most efficient manner. Consider the following scenarios carefully:
- There no market for your current product. (This is a no brainer – shift or exit immediately.)
- There is a market, but you haven’t figured out how to sell into it. (Run new sales & marketing tests before doing a product pivot.)
- You are tired and unmotivated (A new direction is unlikely to fix this.)
- There’s a shiny new opportunity that is exciting and potentially a bigger (This is not a pivot, but rather a new product/company altogether. You need to consider all the costs – costs of the new opportunity, costs of switching and the intangible impacts (brand confusion, team morale and confidence in the leadership, investor pushback, etc.) before scrapping and starting anew.
Often, when a team wants to pivot, it’s a sign that they are grasping at straws. The product isn’t selling and they don’t know why, or they discovered that there isn’t a market for their product and, rather than quit, they want to try something else. Sometimes this is a viable plan. Often it is not. A few pieces of advice:
- Don’t get caught up in sunk costs.
- Don’t be afraid to let go completely and start anew – this is not a pivot!
- Worrying about what others will think only matters to the extent that it impacts sales (not your ego).
Have more points to add or a pivot story to share with other entrepreneurs? Join the discussion on Instagram @Hopp.vc
Jennifer P. Hopp is an investor, advisor and entrepreneur from Silicon Valley who recently moved to Puerto Rico. In addition to being the Managing Partner at ATO Ventures, an early-stage Venture Capital fund, Jennifer works with aspiring entrepreneurs and experienced business owners to start and grow their companies while maintaining a healthy lifestyle. She is an avid supporter of Puerto Rico and often helps companies relocate or set up new operations on the Island. To learn more about Jennifer and funding opportunities for your startup, follow Jennifer on instagram @Hopp.vc