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Twitter has evolved from an audio podcast platform to a social network. Slack has evolved from a multiplayer online gaming platform called Glitch to an enterprise messaging app. Instagram was a location-based check-in service called Burbn. They all grew into multi-billion dollar companies.
Getting ahead of the curve has proven to be a game-changer for start-ups around the world. There’s no shortage of inspirational stories from companies that have taken a tipping point and made it big. Yet even today, many startups still fail to grab the right pivot at the right time, which could not only have saved their business, but also helped them grow faster.
Why are startups hesitant to make the change?
Fear of failure and emotional attachment to the original idea are the two main reasons startup founders hesitate to make the switch. “They fear the potential risks associated with making significant changes to their business model. They may be afraid of losing their existing customer base, market position or investments,” said Gaurav VK Singhvi, co-founder of We Founder Circle.
Also, founders invest a lot of time, effort, and resources into their initial vision, so much so that it becomes difficult for many of them to adopt a pivot. “Founders often find it difficult to let go of the deep-rooted connection with their original idea. Then there are concerns that reputation and investor confidence could be damaged,” said Surya Mantha, Managing Partner of Unitus Ventures.
For startups, change is a question of survival. However, they sometimes lack a deep understanding of the market. “The world is developing very quickly today. Technology is driving major changes, but markets or macro situations are also changing. “Changing the product, retraining teams, needing funds and sometimes almost starting from scratch,” said Padmaja Ruparel, co-founder of IAN and founding partner of the IAN Fund, adding that the transition is indeed a baptism of fire for founders and those those who do. They are on the other side, far more resilient going forward, and able to build a more substantial business over the long term.
Another question is deciding whether perseverance works or not, because entrepreneurship is often synonymous with an attitude of never giving up. “All startups face initial challenges, and many successful startups are the result of the sheer passion and perseverance of their founders. So how does a founder decide that it’s time to stop persisting and start building something else? It’s not easy,” said Nupur Garg, Founder of Winpe.
“The other extreme is falling into the trap of false consensus, where founders project their own confidence in their product to potential clients and overestimate market acceptance and success,” added Ivy Chin, Partner at Inflection Point Ventures. added.
Garg believes investors play an important role in these situations. Good investors bring with them an experienced understanding of the market and a broad perspective on the opportunities/potential of the technology/concept/idea in question. “They are expected to be the voice of reason in the insane chaos of building a startup, helping founders objectively validate their insights and listen to market feedback,” she said.
The importance of a timely turnaround
Rapidly evolving market dynamics require startups to remain flexible and adaptable. But timing is crucial. “Recognizing when to make a switch is critical, as a delayed decision can exacerbate challenges and limit growth opportunities,” Mantha said.
Pivoting is also a structured way to achieve the right product-market fit. Timely realignment allows them to respond to changing customer needs, preferences, or vulnerabilities. “Most startups successfully use this as a growth hack as they bring the product/solution to market and constantly adapt to customer feedback. Sometimes this means completely changing the business model. But some of the startups were so fixated on their product or business model that they couldn’t make it.” They pushed their vision further without taking positive account of market feedback and changing accordingly. In the end, they used all the resources and eventually failed,” Singhvi said.
Overall, the transition enables them to adapt to changing market conditions, overcome challenges and take advantage of new opportunities that may have arisen since their inception.
Gaurav VK Singhvi, co-founder of We Founder Circle, also shares the key things to consider before choosing a successful pivot.
Things to consider before panning
- Market Research and Analysis: Conduct in-depth market research to identify new trends, customer needs, and potential opportunities. Understand the competitive landscape and assess the viability of a pivot in current market conditions.
- Customer Feedback: Gather feedback from existing and potential customers to understand their pain points, likes, and expectations. Use this information to evaluate a pivot’s potential success and ensure alignment with customer needs.
- Resource Assessment: Assess the resources, skills, and expertise required to successfully complete the pivot. Consider the financial impact, skill gaps, and potential impact on the existing team and infrastructure.
- Strategic Planning: Develop a clear and comprehensive strategic plan for the pivot, including goals, target market, value proposition, competitive positioning and a detailed implementation roadmap.
- Risk Assessment: Assess the potential risks and challenges associated with the Pivot, such as: B. Market acceptance, customer acquisition, operational changes and potential disruption to existing revenue streams. Develop contingency plans to mitigate these risks.