What is a Pivot?
A pivot is a strategic shift in a business model, product, or service in response to market feedback or changes. It involves changing direction to better align with customer needs and market trends.
Types of Pivots
- Product pivot: Changes made to the product or service to better meet customer needs. For example, Instagram started as a check-in app before pivoting to a photo-sharing platform.
- Customer segment pivot: Targeting a different customer base than originally intended. Slack originally targeted gamers before pivoting to a business communication tool.
- Platform pivot: Moving from one platform to another, like from desktop to mobile. LinkedIn pivoted from a desktop platform to a mobile app.
Benefits of Pivots
Pivots allow businesses to stay relevant, adapt to changing market conditions, and capitalize on new opportunities. It can also help in identifying untapped market segments and improve product-market fit.
Case Studies
One of the most famous pivots in recent history is Netflix. Originally a DVD rental service, Netflix shifted to streaming video in response to changing consumer habits. This pivot transformed Netflix into a global entertainment powerhouse.
Statistics
According to a study by CB Insights, 70% of startups that failed did so because of premature scaling. Pivoting at the right time can help avoid this fate and increase the chances of success.
