In today’s fast paced startup ecosystem, it’s normal to see new technologies emerging and market trends changing rapidly. To survive, startups must understand the importance of changing direction or adapting to new market conditions. By changing direction or pivoting, a startup can decide its fate, since it is an important step that often makes all the difference between success and failure.
Amongst the many startups that discovered success by pivoting include Yelp, which began its journey as an automated system for emailing recommendation to friends. Although the startup was able to raise initial funding, the idea did not take off. Later the company evolved to a fun online reviewing system that gives reviews and recommendations about businesses in your area.
The site now has over 50 Mn users a month, as well as 17 Mn reviewers globally.
Another example is that of Google-owned YouTube, which started as an online video dating site called “Tune In, Hook Up.” However, the company changed direction to become a simple video sharing company. It was later acquired by Google for a whopping $1.65 Bn.
There can be numerous reasons behind pivoting. While some companies might have to tweak their product offerings, others may have to completely scrap the idea behind their startup and start afresh.
Here are some signs that indicate its time for you to change course of your business:
Customers Don’t Like Your Product
One of the first clues would be if even after launching your product you fail to get good customer reviews or repeat orders. You may believe in your product and may be passionate about it, but if you are unable to generate enough consumer interest its time to move on, or else you won’t be able to sustain the business.
Remember, only if you are able to create value for your customers, will they appreciate your efforts.
Competition Is Overtaking You
If you feel your competitors are surging ahead, while you are not able to gain any traction, it may be time to think over what it is that your competitors are bringing to the table that are missing out on.
If you continuously find that you are losing business to competitors, it may be time to rethink your strategy. Maybe you don’t have a product that caters to a niche category or offers any real value to the customer. It could be an indicator that you need to change your pricing, product offerings or marketing strategies.
Passion Runs Out
One of the biggest indicators that a startup needs to change direction is if you and your team are no longer excited about your product.
It is absolutely imperative that entrepreneurs are passionate about their businesses. There’s no way a startup can be successful if the person driving it no longer believes in it and loses interest. How else will others believe in your vision if you don’t!
So, if after working on your startup for a while, you realise the cons are much higher than the pros, it may be time to let go.
You Get Another ‘Brilliant Idea’
For some entrepreneurs, it could be a simple Eureka moment, where they realise they have something more to offer. You could get a clear idea, about what you want to do, and what changes are needed in your company. If the new idea excites you, and you feel that it can gain more traction than your current idea or product, it may become the turning point for your company.
Can’t Find Investors
You have started your company, have been going to meet dozens of new clients as well as are trying to raise funds from investors. However, even after pitching your ideas to several investors, if you are unable to garner their interest, you should introspect, and if required, think about changing the direction of your company.
Consistently receiving negative feedback from mentors, investors, and clients means you should take a step back and figure out if you are missing something that’s putting you on a back foot.
The reasons for changing direction for a startup can be many and you must take into consideration various factors before taking the decision. As an entrepreneur, it is a very difficult decision, as you will have to cut down on the investor’s money or even let go of human resources. However, you should be ready to cut your losses and change direction if needed if that is in the best interest of the startup.
Remember startups stand to gain the most by pivoting (if the current idea is not working very well), as well as lose the most from missed opportunities. So don’t hesitate to make that switch when the time is right!