It seems that the best strategy for a startup is longer a matter of if, or even when, but now how many times you pivot before you make it rich. Pivoting, a term the enterpreneur-turned-entrepreneurial sage Steve Blank recently popularized, now threatens to become the next business buzzword. Forget open innovation, what’s your pivot strategy? That’s dangerous.
Pivoting describes the act of recognizing that the road your going down is the wrong one and, without too much hesitation, changing directions. In essence, it’s a kinder and more forward-looking term for "screwing up, learning from it, and fixing it." And it highlights the need to pay attention to what your customers are saying, to testing your technology early, and in other ways to running a lean startup that—like lean manufacturing—focuses on many small experiments as a way to move forward fast.
Ben Horowitz, an early investor in Instagram—the company that recently sold to Facebook for a billion dollars, 18 months after launching—described in a post how the young company began as something completely different, then pivoted:
When we invested in Instagram, it wasn’t actually Instagram. It was a company called Burbn, and the idea was roughly to build a mobile micro blogging service. Technologically, it was also different: an HTML 5 application rather than a native app. … subsequently, Kevin noticed that while Burbn wasn’t taking off, the photo-sharing component of it was doing quite well. As a result, he pivoted Burbn into Instagram…
Pivoting has value. It glorifies learning from mistakes, and pulling the plug on bad ideas. It even helps in ridding ourselves of the mistaken notion of the Valley of Death—that more money in the system will keep companies from dying (running out of money) while crossing from a small company into a large one. Pivoting tells us that the startup valley of death is as avoidable as the one that Light Brigade charged into—that it’s the result of bad leadership and escalating commitment to failing courses of action rather than the lack of surplus money.
But pivoting has also and quickly become a vacant metric—as in “Dude, we’re rockin and rollin—we’re on our fourth pivot already.” It can easily become the goal, a measure or progress, rather than an unfortunate but necessary outcome. That has consequences.
This new take on pivoting reminds me of cheap dates, bad business partners, and labrador puppies—who share a pathological willingness to please: Just tell me what you want me to be—I can change, I promise. The focus is on doing whatever it takes to be accepted. Granted, if someone paid you a billion dollars, we’d all be tempted. But for every Instagram there are countless others who are pivoting their way with the prevailing winds (or investors, or customers).
Yes, pivoting means not committing to a bad course of action, but it can also mean not having a rudder either. Without committing to a purpose for your company, pivoting makes entrepreneurship seem to be about chasing the money. As Lizette Chapman write in the Wall Street Journal (the journal that turns ideas into buzzwords) in ‘Pivoting’ Pays Off for Tech Entrepreneurs:
Mr. Systrom is part of a new breed of entrepreneurs in their 20s and 30s who strategically “pivot”—try out new ideas, shed them quickly if they don’t catch on, and move on to the next new thing. Their companies are mostly in the mobile and Web sectors, where it’s relatively cheap and easy to tinker with software and create new products on the fly.
Try it, shed it, move on. That might be nice advice for digital companies trying to ride the next bubble, but a less useful mantra for entrepreneurs looking to actually build a business anywhere outside the rarified and routinely irrational world of the Silicon Valley.
Pivoting is a critical component of starting a new business. But only when it’s balanced by an equally critical complement: commitment to starting something that matters. How do you manage that balance well?