Startups Stack Exchange Archive

Pivots vs changing course, what is the difference?

Often find that some people misunderstand the difference between a pivot and just doing something different. How does someone know that their action is truly a pivot, when to pivot, and how to decide between possible pivots?

Answer 3078

This is mentioned in a book called "The Lean Startup" by Eric Reis in page 33.

Products change constantly through the process of optimization, what I call tuning the engine. Less frequently, the strategy may have to change (called a pivot). However, the overarching vision rarely changes. Entrepreneurs are committed to seeing the startup through to that destination. Every setback is an opportunity for learning how to get where they want to go (see the chart below).

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This clearly explains what a pivoting is and doing something new is changing your vision.

Answer 3072

To me, it’s a matter of degree. A pivot is when you’re catering to a similar audience slightly differently, or when you’re catering to a slightly different audience in a similar manner. I’d define changing course altogether as catering to a similar audience with a very different product, or catering to a very different audience with a similar product – or a very different audience with a very different product.

An example I can think of off the top of my head (experienced first hand) was in financial extranets: We offered pre-meshed, over-the-internet VPN links to financial institutions, who answered they’d only purchase unmeshed links over leased lines. It was the same audience, but it was a very different product with very different prices – it was a complete change of course that threw the original business model out the window.

Another example (also experienced first hand) would be that of a software marketplace SaaS: Instead of an “on-our-site” platform (something à la Steam or App Store), it became an “on-your-site” platform (an overlay that you can put on your own site). Essentially a variation of the same product at the same price (and with the original product kept as is) for the same audience… Only the distribution was slightly different. This is a pivot.

I’d add that pivoting is something you’re doing early and fast. When you’re pivoting, you’re taking iterative steps towards a direction while developing your offer. When you’re changing course, in contrast, you’re basically saying “Screw this, it won’t work so let’s try something completely different” and proceed to spend weeks or months back onto the drawing board.

When you should pivot or change course depends on one thing only: Whether you’re getting compelling market traction or not. If you aren’t, you look in other directions.

Whether you should pivot rather than change course entirely mostly depends on whether you’ve investors or not. If they put money into your business with you saying you’d to something, your incentive usually is to deliver close enough to that. (Imagine getting money to make a Square-like app and using it to open a 3D printer store instead. You’d better be successful, because if not then your investors may no longer entrust you with their money.)

(And that is why, with respect to the other question you just posted, it is rare to find a company that pivots significantly after finding investors. They’ve usually pivoted – or indeed changed course entirely – prior to looking for or at least obtaining funding.)

How to decide between pivots depends on the market feedback and traction you’re getting, as well as on the staff you’ve around and the money you’ve in the bank. There’s no “one and only one” good or better way to do it, except to say: pay attention to the data you’re collecting while finding a product-market fit.

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