In a recent post from Lenny’s Newsletter “The art of the pivot”, Lenny deconstructs 30+ pivots, including how they knew it was time to pivot, how long it took them to pivot, and much more. Pivoting is more common than you’d think, as Lenny’s research found that “one in three B2B startups, and one in five consumer startups, pivot before finding their big idea.”
As a venture studio, one of the hardest things we’ve had to learn is pivot our initial idea or business model. Pivoting - making a substantive change to your product, strategy or market positioning - goes against the natural entrepreneurial instinct to stay wedded to your original vision.
But time and again, the startups that ultimately breakthrough are the ones willing to be humble, listen to data/feedback, and evolve. The pivot is often crucial to finding product-market fit. Here are some famous examples:
Instagram
The photo-sharing juggernaut began as a location-based app called Burbn, letting people chat and check-in to hotspots. When that didn't take off, they pivoted to focus exclusively on photo/video sharing.
Slack
Initially launched as a gaming company called Tiny Speck, they pivoted to make their internal communications tool the core product after seeing how useful and sticky it was for their own team.
Shopify
Their first product was actually online software to help checklist companies manage their inventory before recognizing the larger opportunity in e-commerce tools and rebranding.
Starbucks
Originally just selling espresso makers and coffee beans, they pivoted to opening coffee shops after CEO Howard Schultz visited Italian cafes and envisioned replicating that "third place" experience.
Notion
Akshay Kothari, co-founder and COO, said “A lot of the early stuff didn’t stick. The retention was not great, and it was very buggy.” That should immediately make us all feel better about early hiccups.
Lenny even put together a stellar spreadsheet of all the pivots from his research:
The reasons for a pivot can be myriad - evolving customer needs, lack of differentiation, technical roadblocks, new market opportunities and more. The important thing is being tuned into the signals of an impending pivot versus burying your head in the sand and hoping to just land on success.
As Dalton Caldwell, Managing Director at Y Combinator, said “[Pivoting] gets more shots on goal to try to find this elusive thing [called product-market fit]. If you made something and you launched it and it’s like, ‘Meh, not really working,’ a dang good reason to pivot is you get another roll of the dice. I’ve seen people use these opportunities really well. It’s much easier to be lucky when you get half a dozen shots on goal than one.”
At PSV, we've found that the true value isn't necessarily in the first idea, but in having an entrepreneurial and investigative method to discover where the biggest market opportunity lies. Pivoting is a means, not an admission of failure. It's about doubling down on the elements working while course-correcting with persistence and humility.
