Relax, Pivoting Won’t Kill Your Startup
This article was published for Dillon’s column on AlleyWatch.
A few months back, I received an RFP from a well known music tech startup in desperate need of a new fundraising round. In my pitch, I proposed that the company needed to pivot towards a more lucrative revenue stream to secure new funding. “Ha, no.” was the only response I received, and that was that.
In startup culture, pivot can be a dirty word. Even its casual mention at the company happy hour can spark anxiety amongst employees, and send investors running to the hills. But usually pivoting is not a life changing process for your brand. Every company, big or small inevitably needs to refresh their position in the market. Pivots can reflect the need to overhaul the entirety of a company, but usually are much more minor, and respond to transforming consumer behavior.
Startups in particular, frequently assume that a need for a pivot automatically demands a complete overhaul of the entire company. This is far from the truth. Often times, a company simply needs to make minor adjustments to their organization to see success. This is why it’s important to assess your needs before implementing any drastic change. Media brands must first identify which type of pivot they will undergo before they can start the re-branding process.
Usually, pivots fall into one of the four following categories:
1. Buyer Change
Especially common for b2b startups, a buyer change is when the face of your customer changes. For b2b, this can mean that a decision maker may change from the CTO to a more junior level individual. For b2c facing companies, a buyer change might occur as your customer base ages upward or downward. Typically, buyer changes make for a relatively easy pivot, with little change to the overall organization.
2. Offering Change
An Offering Change occurs when your product or service is no longer solving a relevant problem. Tech startups run into offering changes frequently, as the pace of tech advancement continues to gain speed. For example, Amazon launched as a digital bookstore, delivering books directly to your doorstep. As the market for print declined drastically in the mid 2000’s, the company was forced to undergo an offering change to keep up with increased demand for online shopping resources.
3. Market Change
Market changes occur when your organization must reposition itself towards a new or different market. For b2b, this could mean shifting industries, or even shifting to a consumer market. For consumer-centric brands, if your product isn’t received by your current market, or has fallen out of favor with your market demo, it’s time for a pivot.
4. Visionary Change
A Visionary Change occurs when the entire organizational structure must transform into a new entity, for new buyers, in new industries, under a completely new vision. This is the most drastic pivot a startup can undertake, and should only be considered after trying to implement other changes. However, if a visionary pivot is necessary, it’s not game over for your business. Many successful tech companies have emerged out of a visionary pivot. The key to a successful visionary change is to extensively audit your organization to separate the good eggs from the bad.
What Do Your Customers Value?
A major mistake organizations run into after a pivot is overhauling too much of their brand. Unless you are undergoing a complete visionary change, there are aspects of your brand that shouldn’t be thrown out. Your customers value and expect a uniform, as well as familiar experience when they interact with your organization. For example, take UX and UI. If you’re making aesthetic and ergonomic changes to your dashboard, keep in mind that your clients probably won’t be eager to re-learn your product through an entirely new interface. The same goes for customer acquisition. Do your prospects and existing customers engage with marketing resources regularly? Don’t bury them in a hard to locate corner of your website. The best re-brand leaves customers feeling refreshed, not uneducated and confused. Keep what works improve what doesn’t.
Educate Your Partners And Team
Pivots and subsequent re-brands typically fail when organizations cannot rally the entire team around the changes. Everyone from your c-suite to your interns must both understand the reasoning behind the pivot, and embrace the new vision for your brand. This extends to your partners and vendors as well. Hiring an outside agency can be great for a strong re-brand, but it’s important they understand the specific landscape of your industry and space. A huge fear many startups harbor is that a pivot will spark panic amongst investors, and signal insecurity amongst the organization. This far from reality, as smart investors value brands that are willing to evolve to respond to elemental change. A recent study by Reuters claims 82% of investors cite a company’s brand strategy as a key decision factor when evaluating investments.
The key to a successful pivot is to remain focused, and align your organization with your vision. It doesn’t have to be overwhelming. When it comes to change, identify, evaluate, and execute without hesitation.