What is a pivot? Many entrepreneurs start with an idea that provides the impetus to start a business (Katz and Green, 2014). The idea is at the core and your strategy is how and why you will achieve it. However, in his book The Lean Startup, Eric Ries (2011) describes a process common to most start-up ventures – the need to take corrective action to achieve their strategy – something he calls ‘pivoting’.
The purpose of pivoting is to evaluate the feasibility of your product, service and/or business model against your strategy, in order to find a successful formula for making your business idea work. It doesn’t necessarily mean abandoning your strategy completely to start over. Nor does it mean a complete change of direction in every dimension of your product or service. Rather, pivoting is the necessary adjustments you make to achieve your aim. This might be based on market testing, customer feedback, investor feedback or even on an insoluble problem with manufacturing or operations that requires a new approach. The important thing is that you learn from both success and failure and apply the insight you get from this to the future. In this unit you will read about some examples of this.
Eric Ries is an advocate of the minimal viable product (MVP); i.e. the product with the smallest set of features that will satisfy customers. There are a number of advantages to this approach. The logic is that instead of blindly embellishing an idea, investing time, resources and effort in the process, you focus on the most efficient version of your idea that will solve the problem or meet the need. This ensures that your enterprise is up and running more quickly and that you concentrate on the fundamental ways in which your product or service will satisfy your customers. Ries recommends a prototype or MVP is used to test and learn in the marketplace to allow for iteration of the idea.
1 Does pivoting mean you got it wrong?