A pivot is a fundamental change in business strategy while retaining the lessons learned. This means changing direction based on evidence that your current approach is not working, not abandoning your company. The best pivots preserve what is working (a technology, a customer insight, a distribution channel) while changing what is not.
Key Concepts
Eric Ries defines several pivot types. A customer segment pivot keeps the product but targets different users. A value capture pivot changes the revenue model. A channel pivot changes how you reach customers. A technology pivot solves the same problem with different technology. A zoom-in pivot takes a single feature and makes it the entire product. A zoom-out pivot takes the entire product and makes it a feature of something larger.
The decision to pivot should come from data, not frustration. Relevant signals include flat retention despite product improvements, users consistently requesting something adjacent to your product, a small user segment showing exceptional engagement while the majority churns, or unit economics that cannot work at any scale.
Why It Matters
Most successful companies pivoted at least once. Stubbornness kills more startups than bad ideas. The ability to recognize when your hypothesis is wrong and redirect resources toward a validated opportunity separates founders who succeed from those who run out of runway chasing the wrong problem.
Pivoting is also about speed. The faster you recognize a dead end and redirect, the more runway you preserve for finding what works.
In Practice
Slack started as a gaming company called Tiny Speck. While building a multiplayer game, the team built an internal communication tool. The game failed, but the tool was exceptional. They pivoted to selling the communication product. Stewart Butterfield recognized that the internal tool solved a universal problem better than anything on the market.
Instagram began as Burbn, a check-in app with photo sharing as a minor feature. Analytics showed users ignored check-ins but loved sharing filtered photos. The team stripped everything except photo sharing and filters. Two years later, Facebook acquired Instagram for one billion dollars.
Pro Tips
Test your pivot thesis before committing fully. Run a two-week experiment: build the smallest version of the new direction and measure engagement against your current product. Communicate openly with your team and investors. Good investors respect data-driven pivots. Preserve institutional knowledge by documenting why the original approach failed so you do not repeat those mistakes.