Working Wider

Are You Pivoting…or Rotating?

iStock_000012210065XSmall[1]If you’ve been anywhere near a startup in the last three years, you’ve heard about pivoting. A pivot is just as it sounds: a deliberate change in business model and/or product direction hoping to hit the market sweet spot.  Popularized by Eric Ries’ book The Lean Startup, the underlying assumption is that finding that sweet spot is more likely through iterative experimentation than deep planning.

Ideas in good currency often get abused.  When pivoting is abused, it becomes rotating.  An undisciplined, throw it against the wall and see what sticks strategy for which pivoting becomes the legitimizing framing.  It’s as though founders expect building a business is more like hitting a Las Vegas jackpot than the iterative hard work of serving customers.

Rotating is more likely when attention to customer acquisition trumps delivering an outstanding customer experience.  It manifests itself as the modern day equivalent of the shifty salesperson with a lot of glitz and promises at the front end that evaporate quickly.  Internally, deals signed are touted; not deals delivered.  Customer churn is high and you’ll find scant measures or sustained concern for customer satisfaction in these firms.

Rotating in place is full of activity but on a comparable basis, generates little forward momentum.  Other than a few self generated press clippings spurred by each pivot, you’ll rarely hear about rotating companies from leading industry analysts. Establishing a market beachhead requires a persistence presence and linear progress

Rotating companies have high empathy for those who work in them because it’s stressful.  But, they also have low empathy for customers.  Deeply enriching one’s understanding of customer needs is the basis for a good pivot.  You can’t achieve product-market fit without it. That requires patience, listening and engagement.  Rotating companies focus on sales numbers.

They are more like drive-by assassins who follow emerging customer herds looking for kill shots.  These herds are created when new technologies and market trends such as financial and advertising tech disrupt traditional practices.  Mega cap incumbents know the world is changing but they’re not quite sure what to do and thus are more susceptible to try anything smelling new.  No one wants to be the last wildebeest in the herd the lion is chasing.

There’s ample evidence from innovation authorities such as IDEO that a series of rapid prototypes is a quicker path to a good customer solution. And keep in mind, the cost of product experimentation is far lower than business model experimentation.

Every time a firm changes its business model, it is effectively resetting itself to stakeholders.  Seed investors no longer recognize the company and may wonder what’s going on.  Employees have to learn new routines. Customers who bought the company’s last value proposition are more likely to be confused by the new one

This isn’t an argument to hang on to a flawed premise.  It’s an argument that pivoting is closer to an organ transplant than a joint repair…it’s not something to do that often.

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