The Pivot: What, Why, How, When
You start building something - turns out it doesn't work - but something else does - now what do you do? Been there, done that...
The word “pivot” attracts a wide range of emotions - disgust (because every overfunded startup is pivoting), anger (status quo bias), excitement (something new) or disappointment (because you had built some cloud castles)
A “pivot” usually refers to a serious / large scale business change which can materially impact the trajectory of your business e.g.
Complete change of industry / segment (e.g. consumer to SMB) - where you abandon the previous focus
Change of product (e.g. loans to API infrastructure) - where you shut the old product down
Now, I’ve been through 2 such pivots:
Product failed (Sept ‘21): Changed product (therefore, changed GTM to suit product)
GTM was sub-optimal (Nov ‘22): In the process of changing the GTM, ended up changing the product to a great degree.
From pivot #1 to pivot #2 - we retained 18 out of 20 team members. And, we added a further ~50 team members (primarily Tele-Sales and FOS to drive Sales).
Having done this twice - I have a nice mental map for how to do this - WHY, HOW, WHAT & WHEN for your four primary stakeholders - Team, Customers, Partners and Investors
You can click on the image & download it for future use
Be transparent to whatever extent possible with each stakeholder - you obviously won’t reveal granular business strategy & metrics to a customer - that is just overkill.
Key Things To Do
Have a FAQs document
Pre-empt hard questions from stakeholders - data, prepayments, contracts etc
Write an internal FAQ (for team & investors) and an external FAQ (for partners & customers)
Especially for your team, please address issues like company cashflow, compensation packages & job contracts (people → product → profit)
Personalized communication (make it human)
Don’t make this a PR topic - general & vague isn’t going to help you
Write personalized email headers to key partners
You should do a few Meets calls / in-persons with your team
1-1s are recommended if you’re going to have to terminate employment
Convey timelines with clarity
When does the current product upkeep end?
When does customer data get erased? How can customers request this data?
When does customer support stop for the current product?
Provide a reasonable “WHY”
For customers & investors - this is easy - as a founder, you might come to this decision much later than others around you; the data is clear to them.
Share the data + insights
For partners & customers - this needs to be more emotional - they’ve put their trust in you and you’re renegading on it now
Maybe include some call-outs quoting team members on this decision
Have the Sales Reps / Cust Success team do the 1-1 calls
Brace yourself
Your will face backlash, ridicule and out of context comments
Not everyone in your team will stick around for the new journey; and that is fine!
You will also be surprised by the positive words of encouragement and good wishes (in your DMs)
FAQs section
{This is a placeholder which I will update based on questions}
Closing thoughts
A pivot is more than just a rational decision for the founder. In almost all cases, I would say there isn’t a right v/s wrong - the decision is to be made by you (the founder) and the consequences are also owned by you.
During & after the pivot - you will lose some of your team members, some of your public credibility & some of your investor faith. However, this is part of company building & strategy - you learn what is NOT going to work - and you’re now pursuing something new!
Hopefully, the mental map & the “To Do” with help you navigate the Pivot.
As always, I look forward to your thoughts, comments & feedback. Please do share this on Social Media if you found it useful.