The art of pivoting
A leap of faith
In the life of a start-up, few founders escape this moment of fear, uncertainty, and doubt: should we pivot or not?
Let’s define pivoting as the blood, sweat, and tears process of:
accepting what data is telling you: your business does not grow as planned,
understanding that you need to change course to resume sizeable growth,
getting over the closure of your former vision,
searching a more viable market where you can leverage one key strength,
weighting your future competitive landscape,
convincing your team and investors that you can still win with this by-product,
forging a new offer and brand without alienating existing customers,
selling your new positioning to the outside world,
taking a deep breath!
In my last company, we started pivoting 3 years after Series A funding, and this pivot led us to a successful exit 8 years later. It is the accomplishment of our team I am the most proud of.
What drove me to rethink our product and business strategy?
After initial success in our home market with early adopters, we faced headwinds in penetrating a more conservative market. As a result, our growth trajectory was not sustainable anymore.
We then looked at international expansion. At that time, we began to have a clear view of our ICP, and we discovered that ideal customers in Europe already had started to buy from our competitors, particularly a more developed US vendor.
Their technology was older, but they had far more customers; they could share more best practices, benchmarks, and stories with the prospective buyer.
All the quick wins were already equipped, and we would have to fight in trenches for longer-to-be-convinced customers.
That growth lever was already showing cracks.
The option of raising more money to upgrade our sales & marketing plans was not a safe bet: we were a few months after the dreadful 2009, success was far from obvious with the US competitor having a stronger footprint and mighty investors.
This was the time of disillusionment; we began to think the beautiful story could become a nightmare.
So what to do now?
We hired a consultant to help us envision new avenues. Unfortunately, none of the suggested ideas felt close enough to our expertise area and related to our existing position.
Two conversations saved us.
The first one was with two fellow entrepreneurs we had met before. They had a social media monitoring start-up. We discussed the evolution of the web with them, the desire of brands to understand what was happening with social media. They opened my mind to a broader vision of what we had started to do: helping brands manage customer conversations.
The second one occurred with an existing customer. We presented them with a vision of what we would like to become. They liked the idea and ambition, it changed their perception of who we were, and they began sharing their main pain point. Then we took the time to understand their problem fully and committed to developing a remedy.
OMG, we had the initial shape of our new product line!
It was just the beginning of a new phase.
We then asked our CTO to develop a brand new product and stop developing our initial product line. With his input, we chose to have a clear separation of the 2 products instead of trying to re-use some parts. The older and newer products would communicate through APIs (loose connection).
We had such a brilliant engineering team that it took less than 6 months to have this new product, and it was game-changing.
Then came the human part: change management.
We had to split the engineering team, so part of it was fixing the bugs of the old product line while the other developed more features for the new product line.
We had to derail the sales team to stop selling the old product line and begin selling the new product line instead: the very tricky part when we still had to do your quarterly numbers!
We had to halt the marketing team from producing content related to our old product line and hide it on our website. As the CEO, I also focused my communication on the new product line.
We had to train the SE, delivery, and support teams to the new product.
Having an iron fist in a velvet glove, be flexible and patient but relentlessly pushing people to change was the key to success. We also had some failures: some revenue dips forced us to let go of a few coworkers, while some colleagues whose skills were tied to the old product line felt abandoned.
We didn’t kill the old product line, though: we maintained it alive to serve existing customers, but we stopped investing in it. Of course, they noticed we weren’t investing anymore, but they gave us the time to grow the new product line before re-evaluating their options.
NB: I will also mention one pitfall: we had started to go international with the old product line, and I admit keeping recent remote hires in the loop of the change was overlooked!
Finally, all this sequence was executed without a dime of additional VC money, but with their benevolent supervision!
Our story shows that pivoting is a good thing, and I would even consider that you probably have not been creative and brave enough in your initial venture if you don’t need to pivot.
Our pivot was primarily a Product Pivot.
But there are other types of pivots, for example:
Customer Pivot: going from an SMB ICP to a blue-chip ICP, from a B2C to B2B target.
Funding Pivot: going from a bootstrapped to a VC-funded company or from a VC to an LBO/PE investor.
Team and Culture Pivot: going from a hip start-up to a process-driven, senior-led organization
Whatever the case, enjoy the ride!
We entrepreneurs have a supernatural ability to adapt; I am sure you can succeed if you care to recognize the old and welcome the new.